DRAFT

DIRECTING EU POLICY

TOWARDS POVERTY ERADICATION

From Commitments to Targets to Results…

Mirjam van Reisen

For comments on this paper, please contact:

Mirjam van Reisen, email:

ECDPM

December 2001

Contents

Acronyms and Abbreviations......

Preface......

1Introduction......

2Poverty Eradication: The International Dimension......

2.1International Commitments to Poverty Eradication......

2.2Defining Targets for Poverty Eradication......

2.3National Strategies for Poverty Eradication: The Concepts of ‘Ownership’,

‘Good Governance’ and ‘Civil Society’......

2.4International Strategies for Poverty Eradication: Poverty Reduction ......

Strategy Papers......

2.4.1Enhancing National Responsibility......

2.4.2Poverty Reduction Strategy......

2.5Towards New Conditionalities......

3The Emerging Focus on Poverty Reduction in Community Assistance (1957–92)......

3.11957–76: From Yaoundé to Lomé......

3.21976–88: Extending Aid through the Budget......

3.31984–92: Expanding Development Cooperation with the Mediterranean

Countries, Asia and Latin America......

3.3.1Cooperation with Mediterranean Countries......

3.3.2Community aid to Asia and Latin America......

3.4Cooperation with International Financial Institutions......

41992–2000: Towards a General European Approach to Poverty Eradication......

4.1The Treaty on European Union......

4.2Horizon 2000......

4.3Mainstreaming ‘Poverty’ in EU Development Programmes......

4.4Concentrating the Community’s Development Policy on ‘Poverty’......

4.5Enhancing the Poverty Focus in Community Aid: Definitions......

5Primary Poverty Focus: The Evolution of Financial Resources......

5.1Evolution of Geographical Distribution of Community Aid......

5.2Evolution in Thematic Distribution of Community Aid......

5.3Focus on Least Developed and Low-Income Countries......

5.4Changing the Emphasis towards the LDCs......

6Secondary and Tertiary Poverty Foci......

6.1Country Strategy Papers: Qualifying ‘Ownership’......

6.2Poverty Reduction Strategy Papers......

6.3Linking the PRS and the CSS: Emphasis on Social Sectors......

6.4The PRS, the CSS and Selectivity......

7Measuring Progress......

7.1Targeting Aid: The 20/20 Compact......

7.2Measurable Sectoral Output Targets......

7.3Commission’s Reservations about Output Targets......

7.4Integrating the EDF into the Budget......

7.5The Commission’s Efforts to Harmonise Community Development Programmes......

8Constraints and Opportunities......

8.1What Community Institutions Can Do......

About the author......

Annex 1: DAC List of Aid Recipients (1997/98) and ACP countries......

Annex 2: Allocation of Disbursements of ODA by the EU, including Member States, to countries by level of income, 1986/87–1996/97

Annex 3: DAC System of Classification by Sector of Destination......

Annex 4: Output Targets, 2001 Budget......

Acronyms and Abbreviations

AASMAssociated African States and Madagascar

ACPAfrica, Caribbean and Pacific

ALAAsia and Latin America Programme

CAcommitment appropriations

CEECCentral and Eastern European Countries

CFSPCommon Foreign and Security Policy

CISCommonwealth of Independent States (of the former Soviet Union)

CSPCountry Strategy Paper

CSSCountry Support Strategy

DACDevelopment Assistance Committee (OECD)

ECEuropean Community

EDFEuropean Development Fund

EECEuropean Economic Community

EIBEuropean Investment Bank

ESAFEnhanced Structural Adjustment Facility

EUEuropean Union

EURODADEuropean …

GNPgross national product

HIChigh-income country

HIPCHighly Indebted Poor Country

IFIinternational financial institution

IMFInternational Monetary Fund

IPRSPInterim PRSP

ITeMInstituto Tercer Mundo

LDCleast developed country

LIClow-income country

LMIClow- to middle-income country

MEDA Measures to accompany activities in favour of Mediterranean partners

MEPMember of the European Parliament

NGOnon-governmental organisation

NIPNational Indicative Programme

NISNewly Independent States (of the former Soviet Union)

OAOfficial Assistance

OCTOverseas Countries and Territories

ODAOfficial Development Assistance

OECDOrganisation for Economic Cooperation and Development

OOFother official flows

PA payment appropriations

PhareProgramme for Central and Eastern European Countries

PFPPolicy Framework Paper

PRGFPoverty Reduction and Growth Facility

PRSPoverty Reduction Strategy

PRSPPoverty Reduction Strategy Paper

QSGQuality Support Group

SAPRINStructural Adjustment Participatory Review Network

TacisTechnical Assistance for the Commonwealth of Independent States

UK United Kingdom

UNUnited Nations

UPICsupper- to middle-income countries (and territories)

USUnited States

WTOWorld Trade Organization

ForewordPreface

I would like to thank Commission officials who have been of assistedance in providing vital information for this publication. I am grateful to Terhi Lehtinen from ECDPM for her comments to on earlier drafts of this paper.

I would first like to make a personal comment about on the terminology related to ‘poverty’.

This paper is about poverty, and as such relates to people living in poverty. I do not like to referring to these people as ‘the poor’. Those people living in poverty I have met are mostly remarkably resourceful and have an admirable wisdom and outstandingly practical sense view of life. Rarely have I benefited from tastier meals than those I received in the most remote areas, welcomed prepared by people who well fit intoour the category of those earning ‘less than a dollar a day’.

In my view, development cooperation does not begin with policy. Development cooperation begins by with recognising the spiritual richness of every individual human being, – and by acknowledging the distinct value of each one’s life.

Yes, of course, there are many people living in situations that can be described as create poverty to themimpoverished. These situations of poverty need to be changedcan and should be changed. Because every person individual is entitled to the enjoyment of their universal human rights and each individual has the right to be living in this world in be treated with decency and with respectability.

To the many people living in poverty, with a their wealth of creativity and the richness of mental strength, I dedicate this paper. Let us hope that poverty will be eradicated (and not ‘the poor’, as I read somewhere), and that people living in poverty be taken out ofrelieved of their misery, one day.

Note:

And also another note on terminology. Formally, the Community aid programme comprises the aid programmes implemented by the European Commission and those of the Member States. Strictly speaking, the term ‘Community programme’ can mean ‘the Community programme including the Member States’ or ‘Community programme excluding the Member States’. However, often the term ‘Community programme’ is usually reserved for the aid programme that is implemented by the European Commission.

The analysis presented in this paper only encompasses only the aid programme implemented by the Commission. Wherever the term ‘Community programme’ is used, it is meant asrefers to the‘Community programme excluding the Member States,’ unless specifically stated otherwise.reference to the Member States is made.

Mirjam van Reisen,

La Hulpe,

November 2001

1Introduction

Copenhagen, March 1995. At the UN World Summit for Social Development, the European Community commitsted itself, along with 117 one hundred and seventeen countries, to the task of eradicating poverty. For the first time in history, specific targets are set towards the goal of poverty eradication.

Brussels, April 2000. The European Commission adopts its a policy paper in which poverty reduction is identified as the overarching objective of its development activities.

Geneva, June 2000. At the second UN World Summit for Social Development, the international community sets international development targets for poverty eradication.

New York, September 2000. At the UN Millennium Summit, the international community restates its commitment to the international development targets for poverty eradication agreed , set by the second World Summit for Social Development, held in Geneva – the ‘Millennium development goals’., June 2000.

Brussels, October 2001. The Commission and the EU Member States express their strong commitment to the Millennium development goals, including reducing by half the proportion of people living in extreme poverty by half before 2015. The term ‘extreme poverty’ is used to refer to people living on less than US$1 a day.

The policies that recently adopted by the European Commissionunityhas recently developed towards the eradication of poverty are a clear reflection of and response to developments in the international community. While this is heralded as a new positive development, aAn historical analysis of European Community aid shows that the commitment for European aid to contribute to poverty eradication dates back to the origin of its aid programme. This is e latter is particularly true for of the European aid programme initiated under the Community budget in the late 1970s.

Consequentially, aGoing back in time shows that Europe has a long-standing political commitment to the fight against poverty. It also shows that, While Although the Millennium development goals are indeed of crucial importance, at the same time, a wealth of experience has already been built up in the area of poverty eradication in the lastrecent decades, of which .Often llittle use has been made. done with this experience, however. The resolutions adopted by the European Parliament in the 1980s, pointing to the weaknesses of Community aid in the area of poverty eradication, show remarkably little difference from those adopted on the same subject in more recent times. This is the case despite numerous reforms, initiated by the Commission to deal with the problems, and as well as important changes in the international context.

It appears to be very difficult to translate long-standing commitment to eradicate poverty into action – and it seems to be even more problematic to convert these commitments into concrete and measurable results. The question then arises as to whether the European commitment to poverty eradication is more than a paper-commitment.

The Commission now insists that all its external policies are geared towards poverty eradication. These lofty statements should be more than just rhetoric, and be supported up by structures and staff specialised to implement such policies. The commitments should be backed up with figures of input and output of resources as well as evaluations of actual effect of actions on poverty eradication.

These simple yardsticks of progress are not availble. The European Commission even withheld figures on sectoral output over 1999/2000 from the European Parliament in its preparations regarding the Budget for 2002. Country Strategy Papers, in which actions for EU development co-operation is prioritised, have not been sent to the Parliament, nor have they been made available to the public. The Commission has not made overviews of staff specialised in various fields of poverty eradication available either. By its own admission, the Commission states that evaluations of its activities have not found, or looked at, the impact of its activities on the fight against poverty.

The commitment to the eradication poverty will not bring a result in and of itself. Policies will need to ba backed up by concrete goals and targets, and supported by monitoring mechanisms to measure progress in achieving these.

Europe can make a difference, if commitment is transformed in visible results. The current international context provides both many obstacles and some opportunities to do so. Clearly, s ince tThe terrorist attacks September 11 attacks in on New York and Washington, can orient external policies on the acknowledgement that consensus is growing that human security cannot be guaranteed by military force, and that the international cooperation to take people out of poverty and despair, is an essential element in safeguarding world peace.

The 2001 Durban UN Conference on Racism and Xenophobia in Durban, South Africa,has pointed , among others, to the historic role that Europe has played in the colonisation process. This gives Europe all the more responsibility to make a significant n outstanding contribution to the implementation of the Millennium Ddevelopment gGoals. This role could prove to be vital in creating stability in amid the current insecurity that has followed from the terrorist aggression.

This paper will examines the efforts taken by the of European institutions to re-direct development policies to assist the people living in poverty. These efforts are analysed assessed as one emerging within an the international context of up-and-comingnew ideas of about how poverty eradication can best be achieved. ]delete] The aim of this paper is to assesses to what the extent to which European Community aid is successfully geared towards the eradication of poverty, – and how, if at all, it will contribute to the 2015 international targets to advance eradicate poverty eradicationbefore 2015. In This paper therefore addresses the following questions will, therefore, be addressed:.

  • What has changed, recently, in the policy orientation of the international community towards poverty eradication?
  • What has been the policy of the European Community so far in relation to the eradication of poverty?
  • How has the European Community responded to the policies of the international community intended to eradicate poverty?
  • How can the activities of the European Community in poverty eradication be enhanced?

The Commission distinguishes three levels of poverty as the foci for directing Community aid. A Under the primary poverty focus, aid is directed towards the poorest, least developed countries (LDCs). Under the secondary and tertiary poverty foci, us aid is directed at the ‘poorest sections’ in developing countries, low-income countries (LICs) and middle-income countries (MICs), respectively. I have found these concepts useful in the context of Community aid, and have used them in this analysis of examining the European Community’s policy to eradicate poverty.

2Poverty Eradication: The International Dimension

2.1The International Commitments towards Poverty Eradication

At the UN nited Nations World Summit for Social Development (WSSDthe Social Summit) held in Copenhagen in 1995, 117 heads of State or Government[1] and the European Community made an historic commitment to eradicate absolute poverty, and to adopted concrete plans and objectives initiatives to that end. Some further commitments, particularly related to women, were made in at the 1995 Beijing Fourth UN Conference for Women, held in Beijing , in 1995, and and these were reconfirmed by the UN General Assembly in its Special Sessions on Social Development and on Women, both held in 2000, as well as at the 2000 Millennium Summit in New York.

The measures agreed were not some vague and general commitments. On the contrary, they were included concrete and measurable targets related to in a number of different areas,with that would have an immediate impact on the lives of people living in poverty. Among the measures and initiatives, the governments committed themselves to achieving the following goals by 2015 at the latest: [by when?]:

  • basic education for all;
  • ensuring that 80% of the children finishing primary school;
  • reducing by one- third 1990 infant mortality rates;
  • providing blanket vaccination [for whom, against diseases such as …?] ;
  • reducing by one- half 1990 malnutrition levels;
  • providing medical attention care for women during pregnancy and childbirth;
  • increasing life expectancy to over 60 years;
  • providing drinking water and sanitation for all;
  • eliminating the gender gap in literacy; and
  • ensuring equal access to primary school for girls and boys.

The rich countries also made a commitment ted themselves to: designate 0.7% of their gross national product (GNP) to aid, and to reduce their military expenditures.[2]

In establishing these commitments at the WSSD 1995 Social Summit and in the subsequent processes, the international community acknowledged fouradopted crucially important, concrete and measurable targets as part of the overall effort to eradicate poverty, acknowledging that:

  • poverty can not be solely defined solely (and thus resolved) in terms of income;
  • the eradication of poverty should be related to greater investment in social sectors;
  • the international community can common targets need to be established and agreed upon common targets in their or to measure progress towards poverty eradication; and
  • the progress in eradicating poverty can be measured using objective and quantifiable criteria, other than the one-dimensional aspect of income.

In 1996 the group of industrialised countries that coordinateing their aid through in the Development Assistance Committee (DAC)[3] of the Organisation for Economic Development and Cooperation (OECD) adopted time-bound targets. The Commission participated in the elaboration of these targets, which were related to the commitments made in the United Nations. The targets included:

  • reducing by one-half the proportion of people living in extreme poverty.
  • universal primary education in all countries by 2015;
  • demonstrable ted progress towards gender equality and the empowerment of women by eliminating gender disparitiesy in primary and secondary education by 2005;
  • reducing by two-thirds the mortality rates for infants and children under age 5, and reducing by three-fourths the rate of maternal mortality, all by 2015;
  • ensuring access through the primary health care system to reproductive health services for all individuals of appropriate age as soon as possible, and no later than 2015; and
  • the current implementation of existing national strategies for sustainable development in all countries by 2005, in order so as to ensure that current trends in the loss of environmental resources are effectively reversed at both global and national levels by 2015.[4]

Recognition that It was noted by The Commission recognised that these DAC targets are were only based on only a limited selection of commitments,; and it was emphasised that they DAC targets should not be interpreted as a reduced commitment to the other goals agreed by the international community.[5]

In establishing these targets, the DAC membersStates established these targets in the recognistated tion that: ‘Those responsible for public money are accountable for its effective use. We have a duty to state clearly the results we expect and how we think they can be achieved.’.[6] In establishing these targets the members of the DACIn this theywere respondinged to the growing doubts in the industrialised countries a sense of urgency coming from thate public money was actually contributing to the fight against poverty [delete](sometimes called: ‘aid fatigue’) in which there was doubt that public aid money was contributing to the fight against poverty. The DAC members recognised the needcessity to redirect their policies towards output- and results- oriented approaches, in which so that the successes of development aid wcould be more made visible to the public. Establishing TheyDAC targets, the members also recognised that social development –- and particularly in primary education, gender equality between the genders and basic health -care – , was a ere crucial aspect elements of in any strategy focused on the eradication of poverty. The importance of environmental sustainability and regeneration was also identifiedacknowledged.

Box 1: Achievability of the DAC Targets

In an assessment of whether the identified targets were achievable, by the World Bank*it was concluded that the evidence was mixed. If poverty is measured in terms of income, then income poverty outcomes are a function of the overall level of economic growth and the extent to which the poor participate in that growth. Measured in this way, forecasting poverty is a product of forecasting overall growth and changes in inequality, but. both are very difficult to predictmeasure. The World Bank researchers come to the following concluded thatsions: