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	European Commission urges members to meet Millennium aid pledges by IPs / Reuters   May 25, 2008   Most European Countries fail to increase Aid. (IPS)   Over half of the European Union"s 27 governments failed to increase the amount of aid they gave to poor countries between 2006 and last year, according to a new report.   Despite promises made in 2005 to ratchet up their assistance to the world"s poor, the proportion of the EU"s collective income allocated to development aid fell from 0.41 percent in 2006 to 0.38 percent in 2007.   Eighteen EU countries decreased their aid levels: by 10 to 30 percent in the cases of France, Britain and Belgium.   Concord, an alliance of 1,600 anti-poverty groups, has estimated that if present trends persist, the EU will dole out 75 billion euros (118 billion euros) less in aid to the poor than it had promised by 2010.   In a study published May 22, it warned that the slump in aid could imperil the realisation of the United Nations Millennium Development Goals of drastically reducing the most extreme forms of hardship by 2015.   "Broken promises cost lives," says Moussa Faye, direction of the Senegalese branch of ActionAid. "If you live in Senegal, where one in eight children dies before reaching his or her fifth birthday, aid means the difference between life and death."   The report urges that when the EU"s foreign and development aid ministers meet next week (May 27) they should sign up to a legally binding timetable, committing each of them to specific aid increases.   Britain, the Nordic countries, Ireland, Belgium and the Netherlands have indicated that they would be in favour of such an idea. But most of the remaining EU governments are against it. The latter include France, which will hold the EU"s rotating presidency in the second half of this year, and the bloc"s most populous nation, Germany.   The Concord report finds that many EU governments are "distorting" their donations to the poor by including forms of assistance that most anti-poverty activists do not regard as genuine development aid in their official statistics.   Some 5 billion euros of the 46 billion euros that the EU gave in development aid last year went on cancelling debts incurred by poor countries. Although Concord argues that debt relief is an essential tool in fighting poverty, it claims that it should be additional to development aid.   In some instances, Spain and the Netherlands included transfers designed to benefit their own firms as debt relief. Both governments count the cancellation of export credit debts as development aid. Such credits were granted to companies as a kind of insurance against the risk that they would not receive payments owed as a result of their investments in poor countries.   The aid statistics were also "inflated", the report says, by including 1.8 billion euros spent on educating foreign students in Europe in them. For France and Germany, such expenditure constituted about one-tenth of their declared development aid.   According to Concord, such aid can often bring greater benefits to the wealthy than to poor countries as a large number of foreign students work in Europe after graduating.   A further 850 million euros spent on asylum-seekers in Europe was included in the aid data, too. "Flying out refugees that have been in European detention centres home cannot be considered aid," said Núria Molina from the European Network on Debt and Development (Eurodad). "This is not what European citizens expect."   Molina also expressed concern about how as much as 40 percent of EU development aid may be used in technical assistance such as fees for consultants, training or research."Technical assistance is not bad in itself," she said. "But it is overpriced, and most of the time it responds to the political priorities of donor countries."   The Concord paper notes that technical assistance contracts tend to be awarded to European firms, rather than being used to support those from poor countries. The U.K. government, for example, has granted 80 percent of all such contracts to British firms in recent years.   Justin Kilcullen, Concord president and director of the Irish organisation Trócaire, said: "We want to see our governments recommit to our promises and lead the world"s donors in terms of delivering to the world"s poorest. This is not just about targets. It is about real people. It is a matter of life and death, and there is no time to waste."   He argued that gender inequality "cannot be allowed to become the forgotten issue" in poverty alleviation.   While more than 180 governments worldwide have made various commitments to addressing discriminations faced by women, many development aid strategies drawn up by EU governments lack a gender focus, the report says. Only seven EU countries -- Austria, Belgium, France, Ireland, Spain, Sweden and Britain -- are found to have "serious and meaningful" policies on addressing the links between gender discrimination and poverty.   April 2008 (Reuters)   European Union states must meet pledges to boost aid to poor countries, the EU executive said on Wednesday, warning that missing U.N. goals would be a disaster for developing nations and threaten global stability.   Progress has been made towards the United Nations Millennium Development Goals, the European Commission said, but each year 11 million children die of curable illnesses, one person in four lacks access to drinking water, 114 million children have no primary education and 584 million women are illiterate.   "Missing the Millennium Development Goals would be a disaster for developing countries, a failure for Europe, and a potential threat to global stability," the Commission said.   "With seven years remaining, the message for 2008 is that the Millennium Development Goals can be achieved, but for this to happen, increased political and public support will be needed," the EU executive said in a statement.   The Commission called on EU states to deliver on pledges to boost development aid to 0.56 percent of Gross National Income (GNI) by 2010 and 0.7 percent in 2015, terming this vital to containing problems like migration, security and climate change.   It called on each of the 27 EU states to draw up financial plans showing year by year increases to meet the goals.   The European Union is the world"s biggest aid donor, committing more than 46 billion euros in 2007, but the total amount fell about 1.7 billion euros from 2006, enough to have financed 4,500 schools or 1,200 hospitals.   Aid and development Commissioner Louis Michel last week called this a "serious failure".   The Commission urged more effective aid by avoiding duplication of effort, help to developing countries to use biofuels to fight poverty, and steps to help limit brain drains, particularly in health, education and research.   "Fundamental principles of aid effectiveness are not yet being respected," it said, adding that it would put forward proposals to improve the situation state by state.   It called for 2 billion euros ($3.15 billion) to be allocated by 2010 to the Aid for Trade programme aimed at helping poorer countries take advantage of export opportunities, with special focus on African, Caribbean and Pacific states.   Commission President Jose Manuel Barroso said 2008 must be a year of action not just words. "If we want to remain credible, we have to deliver on our promises" he said in a statement.   A report last week by the 22 member Organisation for Economic Cooperation and Development said development aid from all the world"s biggest donors fell last year, largely due to the end of big debt relief packages.   In 2000, 189 U.N. members agreed goals aimed at eradicating poverty, promoting human and social development and protecting the environment.   In 2005 EU heads of state agreed targets for 2015 of a halving of extreme poverty, access to primary education by all boys and girls and improved health standards.   Aid reached 0.38 percent of the EU"s GNI last year, below an interim target for 2006 of 0.39 percent -- which the bloc did fulfil in 2006.   The European Commission estimates Official Development Assistance amounted to 93 euros per EU citizen, compared to 53 euros per person in the United States and 44 euros in Japan.
	Structural adjustment programs instrumental in creating Food Crisis by Walden Bello Foreign Policy In Focus Thailand   April 2008   Biofuel production is certainly one of the culprits in the current global food crisis. But while the diversion of corn from food to biofuel feedstock has been a factor in food prices shooting up, the more primordial problem has been the conversion of economies that are largely food-self-sufficient into chronic food importers.   Here the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO) figure as much more important players.   Whether in Latin America, Asia, or Africa, the story has been the same: the destabilization of peasant producers by the IMF-World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U.S. and European Union agricultural imports after the WTO’s Agreement on Agriculture pried open markets.   African agriculture is a case study of how economics serving corporate interests can destroy a whole continent’s productive base.   From Exporter to Importer   At the time of decolonization in the 1960s, Africa was not just self-sufficient in food but was actually a net food exporter, its exports averaging 1.3 million tons a year between 1966-70. Today, the continent imports 25% of its food, with almost every country being a net food importer. Hunger and famine have become recurrent phenomena, with the last three years alone seeing food emergencies break out in the Horn of Africa, the Sahel, Southern Africa, and Central Africa.   Agriculture is in deep crisis, and the causes are many, including civil wars and the spread of HIV-AIDS. However, a very important part of the explanation was the phasing out of government controls and support mechanisms under the structural adjustment programs to which most African countries were subjected as the price for getting IMF and World Bank assistance to service their external debt.   Instead of triggering a virtuous spiral of growth and prosperity, structural adjustment saddled Africa with low investment, increased unemployment, reduced social spending, reduced consumption, and low output, all combining to create a vicious cycle of stagnation and decline.   Lifting price controls on fertilizers while simultaneously cutting back on agricultural credit systems simply led to reduced applications, lower yields, and lower investment. One would have expected the non-economist to predict this outcome, which was screened out by the Bank and Fund’s free-market paradigm.   Moreover, reality refused to conform to the doctrinal expectation that the withdrawal of the state would pave the way for the market and private sector to dynamize agriculture.   Instead, the private sector believed that reducing state expenditures created more risk and failed to step into the breach.   In country after country, the predictions of neoliberal doctrine yielded precisely the opposite: the departure of the state “crowded out” rather than “crowded in” private investment.   In those instances where private traders did come in to replace the state, an Oxfam report noted, “they have sometimes done so on highly unfavorable terms for poor farmers,” leaving “farmers more food insecure, and governments reliant on unpredictable aid flows.”   The usually pro-private sector Economist agreed, admitting that “many of the private firms brought in to replace state researchers turned out to be rent-seeking monopolists.”   What support the government was allowed to muster was channeled by the Bank to export agriculture – to generate the foreign exchange earnings that the state needed to service its debt to the Bank and the Fund. But, as in Ethiopia during the famine of the early 1980s, this led to the dedication of good land to export crops, with food crops forced into more and more unsuitable soil, thus exacerbating food insecurity.   Moreover, the Bank’s encouraging several economies undergoing adjustment to focus on export production of the same crops simultaneously often led to overproduction that then triggered a price collapse in international markets.   For instance, the very success of Ghana’s program to expand cocoa production triggered a 48% drop in the international price of cocoa between 1986 and 1989, threatening, as one account put it, “to increase the vulnerability of the entire economy to the vagaries of the cocoa market.” In 2002-2003, a collapse in coffee prices contributed to another food emergency in Ethiopia.   As in many other regions, structural adjustment in Africa was not simply underi-nvestment but state divestment. But there was one major difference. In Latin America and Asia, the Bank and Fund confined themselves for the most part to macromanagement, or supervising the dismantling of the state’s economic role from above.   These institutions left the details of implementation to the state bureaucracies. In Africa, where they dealt with much weaker governments, the Bank and Fund micromanaged such decisions as how fast subsidies should be phased out, how many civil servants had to be fired, or even, as in the case of Malawi, how much of the country’s grain reserve should be sold and to whom. In other words, Bank and IMF resident proconsuls reached into the very heart of the state’s involvement in the agricultural economy to rip it up.   The Role of Trade   Compounding the negative impact of adjustment were unfair trade practices on the part of the EU and the United States. Trade liberalization allowed low-priced subsidized EU beef to enter and drive many West African and South African cattle raisers to ruin. With their subsidies legitimized by the WTO’s Agreement on Agriculture, U.S. cotton growers offloaded their cotton on world markets at 20-55% of the cost of production, bankrupting West African and Central African cotton farmers in the process..   * Walden Bello is a senior analyst at Focus on the Global South, a program of Chulalongkorn University"s Social Research Institute, and a columnist for Foreign Policy In Focus. Visit the related web page
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