Oxfam's EU Advocacy office in Brussels

By Hilary Jeune, EU Policy Advisor on Development Finance at the Oxfam EU Office

Poffertjes and poverty are on the table for EU development ministers in Amsterdam tonight, as they get together for the first time this year. Over dinner, they will discuss the European Union’s future relations with African, Caribbean and Pacific (ACP) countries. The existing framework currently governing this partnership, the Cotonou Partnership Agreement, is due to expire in 2020. During the coming months, the EU will define its position for a follow-up deal, which will serve as a basis for future development cooperation. For the newly-agreed 2030 Agenda for Sustainable Development with its Sustainable Development Goals to be effective, this new legally-binding agreement is instrumental.

Spiralling inequality and the devastating effects of climate change present enormous challenges for developing countries, particularly in Africa. The number of people living in extreme poverty in Sub-Saharan Africa is projected to increase by 50 million by 2030; inequality levels have reached unprecedented dimensions, with an Oxfam report showing that 62 super-rich people own as much as the poorest 3.7 billion. These pressing concerns must be placed at the centre of any future EU-ACP partnership agreement.

Guaranteeing aid and winning over the private sector

Official development aid remains a crucial tool for eradicating poverty and reducing inequality, as the stability of vital public services in the developing world depends on these funds. EU governments need to support public budgets in ACP countries with sufficient financing to make sure that all people can share in the benefits of human development and no one is left behind.

Aside from aid, the involvement of private-sector finance can play a significant role in complementing traditional development funding. But in order to make a positive contribution to development programmes, private sector partners have to respect the highest standards for human rights, social, and environmental protection. If poorly regulated and opaque, private finance can otherwise be counterproductive to development efforts, as it risks being secretive, risky and expensive.

Both public and private development finance flowing from the European Union to ACP countries need to comply with internationally agreed principles to ensure the effectiveness of development cooperation. But even so, in the long haul neither traditional foreign aid nor funds from the private sector will be able to keep the development engine running. With new challenges mounting up, additional funding sources for development programmes are absolutely essential.

Fair taxation as a development springboard

When fairly structured and transparent, taxation would be an ideal source for mobilising such additional finance from within developing countries themselves. Tax revenues could not only fill the gaps in development financing, but also mitigate existing financial dependencies.

However, tax systems in many African, Caribbean and Pacific countries are not yet fit to facilitate this, since tax rules are globally rigged in favour of the wealthy and powerful. The European Union has to lead the global movement for tax justice. If it were to counter harmful tax practices in member states that facilitate corporate tax avoidance, not only would this mean that EU-based multinationals operating in ACP countries can no longer shift their profits into EU tax havens, but putting its own house in order would also set a good example for partner countries.

New funds for new challenges

The urgent need for additional funding sources becomes exemplarily clear when considering the already devastating human cost of climate change. Alone the adaptation to climate change has been estimated to cost developing countries up to $500 billion every year by 2050.

Political dialogue and technical arrangements have helped to anchor climate action across all levels of the current Cotonou agreement. But new and additional public finance for climate adaptation is much needed.

The European Union is the world’s third biggest emitter of greenhouse gases, making it highly responsible for global warming and the unfolding climate catastrophe. EU leaders cannot shy away from mobilising sufficient public money to fund climate change adaptation in the developing countries whose people are least to blame for, but hit hardest by the effects of climate change.

That additional public sources for financing climate adaptation in ACP countries are already within close reach should make this easy: the financial transaction tax is fully conceptualised and a carbon pricing scheme already working. Now these funds only have to be earmarked for supporting adaptation measures.

A holistic development agenda to boost global justice

The ultimate goals of eradicating poverty and reducing extreme inequality must be fully reflected throughout the new partnership agreement with African, Caribbean and Pacific countries. Leaving no one behind requires political ambition and determined action that reaches beyond development policy. As the EU’s partnership with ACP countries comprises more than just a development dimension, extending to economic and trade cooperation, European leaders must ensure that no parts of the agreement aggravate inequality or work against the aim of helping people to lift themselves out of poverty. The same applies to all new and existing EU policies, including in areas like taxation, which need to be fully aligned with the Union’s guidance on policy coherence for sustainable development.

Defining a new standard for global development cooperation

By promoting a holistic development agenda within and outside of the upcoming renegotiation, the EU will also be in an ideal position to strengthen the voices of marginalised people and their communities. This way, vulnerable groups are in a better position to hold their governments accountable and press for positive changes.

At the same time, developing countries themselves must be given greater ownership of the development process to sustain it in the long term. Only such eye-to-eye development cooperation can ensure that the sustainable development goals (SDGs) are met by 2030. A future EU-ACP partnership agreement that spearheads development sustainability in such a way is bound to gain political weight at the global level and lead the international development discourse.

We can end extreme poverty and hunger within our lifetime. For this to happen, EU development ministers negotiating the next EU-ACP partnership agreement must not only talk the talk, but walk the walk.

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