Prague, 07/04/2009 (Agence Europe) - Louis Michel, European Development and Humanitarian Aid Commissioner, sought to appease the Joint Parliamentary Assembly (JPA) in Prague on Monday 6 April in response to concern expressed by MEPs and parliamentarians of ACP states (African/Caribbean/Pacific) about the fact that ACP countries are not able to face up to the impact of the global financial and economic crisis of which they are victims - but not for which they are not responsible.
The JPA was the first to hear the special provisions that, one week after the G20, the Commission is to set in place to help developing countries face the crisis. “We are facing a global crisis, one that is deep and serious for the developing countries and for the ACP countries in particular. Priority, at present, must be given to limiting the impact on the populations as far as possible”, the commissioner said. The plan to support the developing countries will be adopted on Wednesday 8 April by the College of Commissioners. It is the subject of a communication which comes within the broader framework of follow-up to the Monterrey objectives (on aid volume), targeting action on response to the crisis. The plan is based on four pillars to:
1) Maintain the effort to step up public development aid despite the crisis, anticipating aid commitments and payments as far as possible. “The next mid-term review of the 10th EDF will have this role to play”, the commissioner said.
2) Take targeted measures as a matter of urgency to protect the most vulnerable countries and populations. To this end, the Commission will suggest that, under the EDF, an additional allocation will be made available of at least €500 million, in the form of budgetary support to safeguard public spending in social sectors.
3) Support economic activity and investment via strong support for infrastructure investment. “I therefore plan to double the Community's contribution to the trust fund for infrastructure in Africa and put in a further €200 million. Our objective is to reach €500 million by 2010”, Louis Michel said. The Commission is also planning to extend the fund's scope of action “so that it covers not only regional infrastructure but also national infrastructure that is part of a regional network, and so that it proposes guarantee mechanisms for financial risks”.
4) Re-launch agriculture, trade and the fight against climate change.
“At present we are living in a period of contradictions”, Louis Michel said. Although political stability has made headway in many ACP countries ,“for example in the Great Lakes region”; democracy has been consolidated (“the democratic switch in Ghana is a powerful sign of this”) and “some social indicators bear witness to considerable progress” - for example in terms of schooling, vaccination, child mortality, and foreign investment which has quadrupled since 2000 -, all these “undeniable breakthroughs are nonetheless threatened by a multidimensional global crisis that represents a considerable challenge for the ACP countries”, he said. There is in fact not only a climatic and environmental crisis that threatens the water supply of 75 to 200 million Africans and puts pressure on agriculture, but also a political and social crisis, which generates a “new wave of instability in Western Africa and Madagascar”. On top of this there is a security crisis “with for example the rise in trafficking of all kinds throughout Africa” and, last of all, “an economic and financial crisis”, Mr Michel stressed. The impact of this is already being felt (fall in capital and investment, slowdown in economic growth, fall in incoming emigrant income) and is also hitting the countries that were previously the most integrated into the global economy. “The best pupils could be paralysed”, he said, giving the example of Ghana, one of the rare low income countries that was beginning to have access to international financial markets. One must expect a fall in export revenue for Botswana and Jamaica. The price of foodstuffs has remained high in sub-Saharan Africa (in Malawi, the price of a kilo of rice is €1.11). “Progress made since 2005 is endangered. Poverty, unemployment and instability are on the rise. Since the crisis, 100 million people have fallen into dire poverty. In 2009, it is predicted that 49 million more will do so. The Millennium Goal, aimed to cut the number of underfed people in the world by half, will not be met”, Louis Michel warned. The Commission is convinced that coordinated action at European level could increase the positive effect of this plan, that will benefit the developing countries but also the global economy as a whole. Investing in development is, in fact, part of the answer to the current economic and financial crisis.
“The global economy is going through a deep crisis. The ACP countries have not caused this crisis but they are suffering the most”, said Bernhane Gebre-Christos, Ethiopian parliamentarian who considers it appropriate to rethink plans for kick-starting the global economy from the angle of development aid.
Answering JPA members who asked him what were the exact amounts that the developing countries could really count on out of the $1100 billion promised by the G20, Commissioner Michel said: “What the G20 announced is far from insignificant. It is a development package that is far more ambitious than I could ever have hoped for”. He went on to cite the additional financing of 50 billion for low income countries, 21 billion in special drawing rights, rights of access to concessional resources, additional financing from investment banks, and $100 billion in additional loans from development banks.
“My country was a country with average revenue. Now it is no longer the case. It is an LDC”, deplored one parliamentarian from Botswana, calling for an encouraging policy of free trade and investment, avoiding over-regulation which prevents growth, and avoiding protectionism. Like the co-president, Glenys Kinnock (PES, UK), he denounced the fact that 17 countries out of the 20 richest countries have introduced protectionist measures, the EU not being the last as it has failed to do away with indirect farm subsidies and has added export subsidies for dairy products.
“The food crisis does not boil down to the fact that the Chinese have suddenly started eating. Financial speculation is the main cause. To overcome this, small farmers must be helped more. They are the ones who will put an end to the shortages. We must do away with the mechanisms that distort trade - export subsidies in the United States and the EU”, stressed Miguel Angel Martinez Martinez (PES, Spain). “We all agree in saying that we have neglected agricultural production in the EU and in the ACP countries. More consistency is needed between agricultural, commercial and development policies”, said Jürgen Schroeder (EPP-ED, Germany). Schroeder calls for reaffirmation of the right to eat and for EU leaders to take all measures necessary, with sufficient financial resources, to honour the commitment that they have taken to contribute to reduce by half the percentage of the population suffering from hunger in the period until 2015. On the subject of the financial crisis, the MEP takes the view that every cloud has a silver lining. “Unlike those who throw responsibility on the IMF”, he said, it is now necessary to “make sure things change in a lasting way”.
The resolution to be adopted by the JPA on Thursday on the food and financial crisis in the light of the results of the G20 will require rapid pay-out of the billions promised for developing countries, as fresh money. It will also call on the rich countries to reduce their farm subsidies and to tackle speculation on raw materials in order to relieve the countries that are highly dependent on agriculture and exports of raw materials, and that are victims of the food crisis. Louis Michel announced that €314 million had just been allocated from the Food Facility of one billion euro, for immediate disbursement. (A.N./transl.jl)