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Renewing Broken Promises

22 June 2000

Renewing Broken Promises

By Ramesh Jaura

The breakdown of a crucial round of development aid negotiations in Paris this week calls into question the donor country governments' commitment to halving global poverty by 2015, according to a non-governmental organisation. "It is an utter disgrace that rich countries, who claim that they are trying to tackle extreme poverty, cannot take even the smallest step towards reducing the commercial abuse of their aid programmes," Action Aid's policy advise r Jeff Chinnock said Thursday.

"This is breathtaking hypocrisy of the worst order," he added. The NGO works with over 5 million of the world's poorest people in more than 30 countries across Africa, Asia, Latin America and the Caribbean. Recen tly Action Aid and its affiliate organisations in Europe came together under the banner of the Action Aid Alliance.

Chinnock's remarks comes in the run-up to the Special Session of the United Nations General Assembly Jun. 26-30 in Geneva, convened to review the progress made since the World Social Summit five years ago in Copenhagen, Denmark.

The conference agreed on what has come to be known as the Copenhagen Declaration on Social Development and the Programme of Action. The 10 commitments, embodied in the Declaration, signalled the emergence of a collective determination to treat social development as one of the highest priorities of national and international policies, and to place the human person at the centre of development.

Action Aid's policy adviser's statement was occasioned by the failu re of the 23-member Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to agree on enhancing th e effectiveness of aid rather that using it as commercial subsidy.

The talks broke down after tough negotiations Jun. 20-21 in Paris, the OECD headquarters. "We could not reach an agreement because three countrie s refused to budge an inch," said a DAC official in Paris, who wished to remain unidentified, in a telephone interview with IPS.

The three countries are Japan, France and Denmark. "They scuppered an agreement by placing commercial self-interests above their efforts to improve the effectiveness of their aid to the world's 48 poorest countries," Action Aid said in a statement Thursday.

The expectation was that the Paris agreement would remove conditions attached to some of the official development assistance to the world's least-developed countries which require recipients to spend the money on goods and se rvices from the donor country companies, Action Aid said.

According to the NGO, tied aid increases costs by up to 25 percent. The annual global overseas development aid budget is around 55 billion US dollar s of which half is tied.

"This means that un-tying aid would effectively increase the total value of aid by around 7 billion US dollars. This is almost equivalent to the tota l aid to sub-Saharan Africa that amounted to 8.6 billion US billion dollars in 1998.

In view of the failure of the international donor community to agree to untie aid, Action Aid is pressing rich countries to insist that aid tying b e included as an emergency item on the agenda of the G-7/8 Okinawa Summit Jul. 2 1-23. Participants in the Okinawa meeting will be Britain, France, Germany, Italy, Japan, Canada and the United States. A recent entrant to the club is Russia.

Chinnock said Action Aid was also pressing for the Jun. 26-27 meeting of the OECD Ministerial Council to put pressure on the Japanese, Danes and French to stop blocking the agreement to untie development aid.

"At the forthcoming Okinawa G8 Summit, Japan is intending to address how globalisation can be made to work for the poor. Given Japan's actions this week, it is difficult to see how they can be taken seriously on this issue, let alone provide a leadership role." Chinnock added.

Action Aid has also encouraged the European Commission - the executiv e body of the 15-member European Union - to investigate the legal status of Member States' aid tying policies. The NGO said: "The European Commission will warn EU Member States next week that they are under investigation for their aid-tying practices."

A message posted Thursday on the website said at the special session next week in Geneva, UN Secretary- General Kofi Annan would launch a landmark report.

The report will emphasise that "world poverty could be significantly decreased by 2015 if developing and industrialised countries implement their commitments to attack poverty."

In fact a draft prepared by the Preparatory Committee in New York ahead of the Geneva Special Session of the UN General Assembly says: "Although Africa and the Least Developed Countries have made continued efforts to implement the commitments of Copenhagen, widespread poverty remains."

It adds: "Recognising the internal and external constraints facing these countries, we reiterate our will to continue to support their efforts by allocating resources, including by fulfilling internationally agreed commitments, as well as by strengthening initiatives, in particular i n the area of social development."

One of the important internationally agreed commitments on the part of the industrial countries is to contribute at least 0.7 percent of their gross national product (GNP) for official development assistance (ODA).

The initial data of the DAC show that in 1999 the total ODA rose by five percent in real terms to 56 billion US dollars. Most of the increase was due to special assistance from Japan to countries affected by the Asian fina ncial crisis, and the international effort to assist refugees from Kosovo, admits the DAC report. However, ODA represented only 0.24 percent of donors' combined GNP, though it was up from 0.23 percent in 1998. According to the data provided by the 23-nation DAC, the total aid from G-7 countries was 0.21 percent of their combined GNP. Decline in aid from Italy and Britain was largely due to the timing of deposits to international fi nancial institutions. Total aid from non-G-7 countries was 0.44 percent of their combined GNP. Denmark, the Netherlands, Norway and Sweden remained the only countri es to reach the United Nations' ODA target of 0.7 percent of GNP.

However, the governments in Berlin, London, Paris and Rome agree that aid has a crucial role in achieving the international development goals by supp orting the efforts the developing countries are undertaking themselves to make development progress, especially in the area of poverty reduction.

Germany's Economic Co-operation and Development Minister Heidemarie Wieczorek-Zeul told a gathering of diplomats, journalists and non- gov ernmental organisations in Berlin last week that she was strongly in favour of raising ODA to bring it closer to the 0.7 percent of GNP.

She regretted that the compulsion of consolidating the national budgets was affecting ODA funding. However, she added, fresh sources of developme nt financing were being made available. At Germany's insistence, the G-7 /8 summit held June last year in Cologne had agreed on a debt forgiveness initi ative for the benefit of the highly indebted poor countries.

The debts of 36 countries, amounting to 70 billion US dollars are expected to be forgiven. By the end of 2000, debts of 20 developing countries are expected to be cancelled. Bolivia, Mauritania, Mozambique, Tanzania and Uganda have already been told that they do not need to repay outstanding loans from official development assistance.

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