New Statesman | By Barbara Gunnell | March 4, 2002
There are currently so many initiatives being launched, Marshall Plans being pledged and targets being set, all with the avowed aim of lifting developing countries out of poverty, that it is difficult to believe that anyone on the planet can possibly remain poor for much longer. Our own Chancellor, Gordon Brown, wants to double official aid; his US counterpart, Paul O'Neill, wants to give the poorest countries grants rather than loans; Tony Blair is much taken with Thabo Mbeki's New Partnership for Africa's Development; and world leaders are gearing up for another great international fest on alleviating poverty, to be held in Monterrey, Mexico, this month. Even President Bush will attend - a sign, say his aides, of how serious he is about combating poverty. The Financing for Development meeting in Mexico has been called to try to put some energy, and money, behind the United Nations Millennium Declaration. This consists of a range of goals set by a gathering of world leaders in 2000, and includes commitments to halving the numbers living in absolute poverty by 2015, reducing infant mortality and implementing universal primary education. It ought to be a cause for celebration that the US president will attend. But there is a price. As is the way with the UN, the post-conference communique of what delegates 'decide' is virtually set in stone before any ministers arrive to make their speeches. And in the run-up to Monterrey, Bush's advance team has been diluting any aims and ambitions that might embarrass him.
On aid, for example, the draft communique now echoes Brown and calls for 'at least a doubling of ODA official development assistance if the millennium development goals are to be achieved'. It sounds great, but it renders anodyne the greater ambition that follows - 'the need to increase overall ODA to the annual equivalent of 0.7 per cent of industrialised countries' gross national product (GNP)'. For the US, which gives just 0.1 per cent of national income in official aid, that generous-sounding 'doubling' is much cheaper than the UN target of 0.7 per cent, set for rich countries in 1970. It is not a pie-in-the-sky figure: Denmark, Sweden, Netherlands, Norway and Luxembourg all give 0.7 per cent or more. Portugal and Ireland are committed to reaching the target by 2006. The UK reached 0.5 per cent in 1979 and - after the Tories dragged it down to 0.26 per cent - new Labour has got it back to 0.3, with a commitment to reach 0.4 per cent by 2004.
In 2000, total aid from countries in the Organisation for Economic Co-operation and Development was $53.1bn (less than the previous year), or about 0.24 per cent of combined GNP. The enthusiasm of Britain and the US - and of the World Bank president, James Wolfensohn - for a doubling of aid has to be seen in this context. But as the World Development Movement points out, even if this new, less ambitious target were to be reached - a big 'if', given the US record on parting with money to international causes - the aid would be stretched thinly over the objectives mapped out for the Monterrey meeting. One of these is to halve the number of people living on less than $1 a day. A study by the New Economics Foundation found that the cost of this alone would be $46bn, in addition to cancelling the debt of all 41 heavily indebted poor countries.
We should not, then, raise our hopes that Willy Brandt's 1970s dream of 'a massive transfer of resources from North to South' will result from aid pledges made at Monterrey. But as the UN secretary general, Kofi Annan, said in London at the end of February: 'Poor people in poor countries are not asking for a handout . . . They would be the first to say that trade, not aid, is the path out of poverty.' The question to be resolved at Monterrey, Annan said, is: 'Will men and women in the global market be allowed to compete on fair terms in the global market?'
The small print of the communique suggests not. Here, too, US sensibilities seem to have been well catered for. A tediously long sentence (153 words) acknowledges 'issues of particular concern to developing countries' and lists them at great length. They include 'trade barriers, trade-distorting subsidies and other trade-distorting measures . . . high tariffs and tariff escalation, as well as non-tariff barriers, the movement of natural persons as opposed to unnatural ones? , the lack of recognition of intellectual property rights for the protection of traditional knowledge and folklore'. But nothing is said about dismantling trade barriers.
For all the free-trade rhetoric of the richest countries, tariffs and quotas rob developing countries of billions of dollars - according to the UN, $1.9bn every day in 1999, or 14 times the amount they received in aid. Progress at Monterrey on this front would have a far greater impact than doubling aid.
But are the US and the EU (whose agricultural subsidies and protective labelling laws make it virtually impossible for any emerging food exporter to gain a foothold in the European market) as serious about change as Annan suggests? Jubilee Debt Campaign notes that the original, more concise wording of the trade clause spelt out that 'trade barriers, subsidies and other trade-distorting measures, particularly in agriculture, have negative effects on developing countries that significantly exceed the value of aid flows - and must be eliminated'.
These issues are meant to be dealt with under the new Doha round of World Trade Organisation talks. But the talks began with a spat about who would take the chair of an important committee. The Quad group - the US, the EU, Japan and Canada - wanted Mike Moore, the WTO's director general. But a group of developing countries backed by a new member, China, had other ideas. A compromise left Moore in the chair 'ex officio', with various benign statements that the work programme would be 'transparent' and under the charge of the General Council.
The argument was a reminder that the clamour of developing countries for a greater say in the WTO gets louder and more effective. In September, Moore hands over to Supachai Panitchpakdi, a former deputy prime minister of Thailand, who is a prominent proponent of greater influence for developing countries. With or without the blessing of Monterrey, the Doha round will not be a pushover for the Big Four. Nor are they particularly united at the moment. The EU's stand on labelling foods that contain genetically modified organisms continues to rumble. The US is likely to take a tougher stance on this being a constraint of trade, particularly now that China has said it will not allow US grain imports unless they can be guaranteed GM-free. Last month, the EU got a WTO ruling that tax breaks which the US allows to multinational exporters such as Boeing and Microsoft are an illegal trade subsidy. The cost to the US if it doesn't remove this privilege could be high. The EU wants to impose, from early May, retaliatory tariffs on more than $4bn worth of US imports.
And Wolfensohn may have thrown a dangerous spanner into the works. At the same time as he advocated a doubling of aid, he called for industrialised countries to cut their agricultural subsidies. This will be music to the ears of developing countries forced by loan conditions to cut theirs and then obliged to compete with Europe's heavily feather-bedded farmers. It will be rather more discordant to the EU, whose trade commissioner, Pascal Lamy, has virtually ruled out significant movement on agriculture. 'Why should rules that were designed for manufacturing be applied to agriculture?' he has argued in the past.
But as Wolfensohn points out: 'Global solidarity has a price.'
Fairtrade Fortnight 2002 begins on 4 March. Products that carry the Fairtrade Mark include bananas, chocolate, tea and coffee. See www.fairtrade.org.uk; www.wdm.org.uk; www.jubileedebtcampaign.org.ukNew Statesman:
