Eu Development Policy: An Ambiguous Case
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EU Development Policy
2nd of June 2009, Group 9 - Team A F. Arab, K. Diakidis, T. Krume, C.Tonne
EU
Development Policy
Milestones / Main Tenets EU and HIPC Initiative Economics Behind ▪ The Vicious Circle of Poverty
EU
Reality Check: Ghana
Ghana and HIPC Initiative Ghana and the Vicious Circle of Poverty
Conclusion June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
1950:
Schuman Declaration
“Development of the African continent” 1957:
Treaty of Rome
Development assistance officially introduced in EC 1975-1995:
Lomé Conventions
Geographical widening (ACP countries) & trade arrangements
2000
(revised 2005): Cotonou Agreement
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
Built on 3 Complementary Pillars: 1. Development cooperation 2. Economic and trade cooperation 3. Political dimension
Objective 1: Eradication of poverty in the context of
sustainable development (to achieve MDGs)
Objective 2:
Economic cooperation to integrate economies
gradually and smoothly into world economy
African, Caribbean, Pacific (ACP) countries June 2, 2009 Group 9 Team A - EU Development Policy – An Ambiguous Case
Rationale The HIPC Initiative funds debt relief for all ‘Highly Indebted Poor Countries’ (HIPCs) Initiators Established 1996 by World Bank & IMF / EU support since $51 bn funded in total / EU: $1.6 bn Objectives Lower external debt burdens of HIPC governments Finance add. government spending on poor people Conditions Eligibility is based on external debts and income June 2, 2009 per capitaGroup 9 Team A - EU Development Policy – An Ambiguous Case
Debt Relief as Soluti on ?
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
2002: Ghana’s initiative to revive economic growth Application for HIPC programme (set an end to
debts)
Pre-2004: Successful efforts to restructure: Efficienc Administration (combating corruption) Procedures y Practices
2004: HICP completion point reached after: Poverty reduction Improved macroeconomic performance (e.g.
inflation) Group 9 Team A - EU Development Policy – An Ambiguous Case
June 2, 2009
IMF
Resident Representative in Ghana stated:
“Ghana has achieved relatively strong economic growth with significant reduction in the rate of inflation and other efficiency related improvements. The progress is overall satisfactory.” (IMF, 2005) June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
Magic Formula:
1. 2. 3. 4.
Reform system Remove corruption Insert aid Flourish
Set of conditions and assessments made sure Ghana will be able to act under the right measures when receiving debt relief through HIPC
consider economic AND political infrastructure to prevent wasted aid
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
After all this, sneaky trade barriers remain: Major obstacle to the eradication of poverty Example 1: EU’s export restriction on Ghanaian
cocoa using the chocolate directive (main export product to the EU) Example 2: Strict EU regulations on banana exports, regarding ▪ ▪ ▪ ▪ ▪ ▪
Size Weight Colour Shape Texture Quality
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
Adjei
Henaku, the Executive Secretary of the Ghana Farmers’ Association, put it like this:
“It is extremely difficult to figure out how the dumping of cheap poultry parts-like legs, wings, necks - that have no markets in the EU anyway, could be permitted in the name of free trade that is supposed to promote competitiveness.”
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
In
order to escape the poverty cycle an income high enough to allow savings must be achieved investment! Sneaky export restrictions and dumping
prevent exactly that So the EU is making efforts to eradicate poverty while partially being the source of it ▪ Going 2 steps forward, and 1 back each time? June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
No,
2 steps forward and 1.5 back:
▪ It can be good though:
With the support of international donors
Ghana has been able to curb economic growth between 1991 and 2002 by 4.2 percent per annum (European Commission, 2006). ▪ However, Ghana has a much higher potential, still largely depends on primary products deteriorating terms of trade...
EU’s
economic interests still main priority, interest groups still dominant Aid could have a much bigger positive
impact!
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
http://www.youtube.com/watch?v=Bl
Dhd_0f-r4
Aim: Eradicate poverty and integrate economies into world economy Ghana:
HIPC partly helps to break vicious circle of poverty EU trade barriers and Directives hinder sound economic growth Works on poverty reduction but hinders economic integration
Statement confirmed: EU Development Policy reveals ambiguousness What should be done?
Remove barriers to trade Stop dumping June 2, 2009 Group 9 Team A - EU Development Policy – An Ambiguous Case
The World Bank (2009). Poverty. Retrieved May 5, 2009, from: http://www.worldbank.org/depweb/beyond/beyondbw GAWU, D. C. (2004). New ACP-EU Trade Arrangements: New Barriers to Eradicating Poverty? Brussels: Eurostep. Damned by Debt Relief (movie) (2007). Retrieved May 28, 2009, from: http://www.youtube.com/watch?v=BlDhd_0f-r4
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
¿ June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
2nd of June 2009, Group 9 - Team A F. Arab, K. Diakidis, T. Krume, C.Tonne
EU
Development Policy
Milestones / Main Tenets EU and HIPC Initiative Economics Behind ▪ The Vicious Circle of Poverty
EU
Reality Check: Ghana
Ghana and HIPC Initiative Ghana and the Vicious Circle of Poverty
Conclusion June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
1950:
Schuman Declaration
“Development of the African continent” 1957:
Treaty of Rome
Development assistance officially introduced in EC 1975-1995:
Lomé Conventions
Geographical widening (ACP countries) & trade arrangements
2000
(revised 2005): Cotonou Agreement
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
Built on 3 Complementary Pillars: 1. Development cooperation 2. Economic and trade cooperation 3. Political dimension
Objective 1: Eradication of poverty in the context of
sustainable development (to achieve MDGs)
Objective 2:
Economic cooperation to integrate economies
gradually and smoothly into world economy
African, Caribbean, Pacific (ACP) countries June 2, 2009 Group 9 Team A - EU Development Policy – An Ambiguous Case
Rationale The HIPC Initiative funds debt relief for all ‘Highly Indebted Poor Countries’ (HIPCs) Initiators Established 1996 by World Bank & IMF / EU support since $51 bn funded in total / EU: $1.6 bn Objectives Lower external debt burdens of HIPC governments Finance add. government spending on poor people Conditions Eligibility is based on external debts and income June 2, 2009 per capitaGroup 9 Team A - EU Development Policy – An Ambiguous Case
Debt Relief as Soluti on ?
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
2002: Ghana’s initiative to revive economic growth Application for HIPC programme (set an end to
debts)
Pre-2004: Successful efforts to restructure: Efficienc Administration (combating corruption) Procedures y Practices
2004: HICP completion point reached after: Poverty reduction Improved macroeconomic performance (e.g.
inflation) Group 9 Team A - EU Development Policy – An Ambiguous Case
June 2, 2009
IMF
Resident Representative in Ghana stated:
“Ghana has achieved relatively strong economic growth with significant reduction in the rate of inflation and other efficiency related improvements. The progress is overall satisfactory.” (IMF, 2005) June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
Magic Formula:
1. 2. 3. 4.
Reform system Remove corruption Insert aid Flourish
Set of conditions and assessments made sure Ghana will be able to act under the right measures when receiving debt relief through HIPC
consider economic AND political infrastructure to prevent wasted aid
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
After all this, sneaky trade barriers remain: Major obstacle to the eradication of poverty Example 1: EU’s export restriction on Ghanaian
cocoa using the chocolate directive (main export product to the EU) Example 2: Strict EU regulations on banana exports, regarding ▪ ▪ ▪ ▪ ▪ ▪
Size Weight Colour Shape Texture Quality
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
Adjei
Henaku, the Executive Secretary of the Ghana Farmers’ Association, put it like this:
“It is extremely difficult to figure out how the dumping of cheap poultry parts-like legs, wings, necks - that have no markets in the EU anyway, could be permitted in the name of free trade that is supposed to promote competitiveness.”
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
In
order to escape the poverty cycle an income high enough to allow savings must be achieved investment! Sneaky export restrictions and dumping
prevent exactly that So the EU is making efforts to eradicate poverty while partially being the source of it ▪ Going 2 steps forward, and 1 back each time? June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
No,
2 steps forward and 1.5 back:
▪ It can be good though:
With the support of international donors
Ghana has been able to curb economic growth between 1991 and 2002 by 4.2 percent per annum (European Commission, 2006). ▪ However, Ghana has a much higher potential, still largely depends on primary products deteriorating terms of trade...
EU’s
economic interests still main priority, interest groups still dominant Aid could have a much bigger positive
impact!
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
http://www.youtube.com/watch?v=Bl
Dhd_0f-r4
Aim: Eradicate poverty and integrate economies into world economy Ghana:
HIPC partly helps to break vicious circle of poverty EU trade barriers and Directives hinder sound economic growth Works on poverty reduction but hinders economic integration
Statement confirmed: EU Development Policy reveals ambiguousness What should be done?
Remove barriers to trade Stop dumping June 2, 2009 Group 9 Team A - EU Development Policy – An Ambiguous Case
The World Bank (2009). Poverty. Retrieved May 5, 2009, from: http://www.worldbank.org/depweb/beyond/beyondbw GAWU, D. C. (2004). New ACP-EU Trade Arrangements: New Barriers to Eradicating Poverty? Brussels: Eurostep. Damned by Debt Relief (movie) (2007). Retrieved May 28, 2009, from: http://www.youtube.com/watch?v=BlDhd_0f-r4
June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
¿ June 2, 2009
Group 9 Team A - EU Development Policy – An Ambiguous Case
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