Thursday, July 07, 2005

The G8, EU, Africa, the CAP (and a bit on the BBC's supposed bias)

As a G8 sideshow, EU Trade Commissioner Peter Mandelson today gave a speech in Edinburgh on living standards in Africa, how they will be affected by current EU reforms, and what needs to be done to help the continent pull itself out of poverty. Nothing especially major considering what's going on up the road in Gleneagles (not that that's likely to achieve much either).

The important bit, however, was his admission that "in our current EU sugar reform, one developing country’s gain may well be another’s loss."

Cut to the BBC's 10 O'Clock News (supposedly a Europhile institution that the sceptics always get het up about for its bias). A report on the impact of EU sugar quotas. A (nearly) word-for-word transcription:

"The EU reforms will set [this farmer's] family back a generation. But it is not just him. The whole of Swaziland will face devastation... Swaziland's biggest industry faces ruin, as do the thousands of farmers who depend on it."
This all accompanied by images of extreme, near-subsistence poverty, and African farmers with those dead, hopeless eyes staring at the camera, desperate. All deliberately set up to make the viewer react with "what a bunch of bastards - how could they do this to these poor, poor people?"

This report was obviously aimed at the G8 meeting, and our Tony's main push for more help for Africa. But it strongly - very strongly - suggested that the EU is responsible for more than its fair share of poverty in the continent. Not only that, but it was stated explicitly that the EU is making the situation worse in Swaziland with no "buts" involved - even though it is easily arguable that the EU's current reforms will actually help Africa as a whole, even if hurting some countries.

Yep, the BBC's pro-EU alright.

The rest of Mandelson's speech, though in places riddled with a level of hypocricy the likes of which is rarely seen (I mean, "it is not for want of EU effort to help Africa trade"? bollocks, Mandy) is worth a look, even if more interesting stuff is happening elsewhere.

He does, amidst the nonsense, have some valid points:
"33 of the 46 sub-Saharan African countries enjoy full quota and tariff free access to European markets, including for all agricultural goods, under the EU’s “Everything But Arms” initiative for Less Developed Countries... Already EBA has had positive results. Exports to Europe of the range of products that benefit have risen by 100% in 3 years, whereas they had fallen by 11% in the previous ten years... Thirteen sub Saharan countries are not classed as LDCs and do not enjoy that full and free access, including Ghana, Kenya and Nigeria. They do however enjoy a privileged trading relationship with Europe as ACP countries. 88% of their agricultural exports to Europe enter tariff and quota free."
There are also a few interesting suggestions of how to go forward, though I'm not convinced about "aid for trade" - sounds too much like "oil for food", and we all know how THAT ended up...

Still, Mandy's figures won't convince many. Not least if you read this report from the UN Office for the Co-ordination of Humanitarian Affairs:
"'Rich countries have never been richer, yet they have never given less; they give half as much in aid as they did in 1960. Increasing their aid to the levels needed - as they promised to do in 1970 - would cost them the equivalent of a cup of coffee a week for each of their citizens. The price of not doing it will be measured in millions of lives,' Oxfam's head of advocacy, Jo Leadbeater, said in statement on Tuesday.

"In 1970 the leading nations agreed that 0.7 percent of the GDP of their states would be devoted to aid. This undertaking was reaffirmed at the 1992 United Nations Conference on Environment and Development in Rio de Janeiro, and again at the UN International Conference on Financing for Development at Monterrey in 2002.

"To date only five countries have managed to reach that target: Denmark, Luxembourg, the Netherlands, Norway and Sweden. Six others have pledged to do so by 2015: Belgium, Britain, Finland, France, Ireland and Spain."
The top aid-givers may all be European (even if Norway isn't part of the EU), but their decisions to give are not thanks to any EU strategy.

Still, aid's not necessarily the way forward - I'm still trying to work out where I stand on this one, though am beginning to lean further and further towards (almost) free trade as the best solution. When it comes to aid, it's the whole "give a man a fish" argument all over again. From that same report:
"There appears to be broad consensus that more aid is essential if Africa is to get ahead, but a series of arguments put forward by the International Monetary Fund contends that there is no strong evidence that aid boosts economic growth and, hence, no reason to suppose that aid reduces poverty either.

"Co-authored by IMF chief economist Raghuram Rajan and a colleague, Arvind Subramanian, two papers on aid maintain that while projects may do good, they have unseen side effects that eventually hurt those they are intended to help.

"The authors point out that aid flows inadvertently push up a country's exchange rate, damaging exporters; aid projects that hire local workers are bidding up skilled wages, again damaging the export firms that hire from the same labour pool."
Whereas free trade, of course, could see African farmers exploited by big multinationals for meagre pay. But at least they'd be getting paid. Meanwhile, European farmers, now too expensive (as they already are) would likely more and more go bankrupt, unable to compete.

Without some continuation of subsidies for farmers to enable them to maintain the land, vast swathes of European countryside would turn to wasteland, slowly returning to nature as 6,000+ years of agricultural cultivation slowly merges with the wilderness.

This is (sort of) what the current CAP reforms claim to aim to prevent (they're no longer subsidising farmers to produce food, technically it's now to maintain the land - and no, I'm not convinced either). But they still shut out the competition, and poor farmers outside the EU still suffer as a result.

It's a tricky one, and no mistake. Certainly too tricky to sort out over a few drinks in Scotland. But if this meeting is taken merely as groundwork for the World Trade Organisation shindig in Hong Kong in December, it's just possible that the cogs could begin to whirr in the right direction. Only just, mind...

3 Comments:

Blogger Phil said...

On Rajan and Subramanian, see Owen. He's not overly impressed. It sounds rather like an intellectual exercise, at best - "yeah, but if we push all the fudge-factor sliders over *that* way, how would the figures look?" I'ts just a bit of fun, I guess.

7/07/2005 08:23:00 am  
Blogger Lobster Blogster said...

Watch out or the
Liberal Democrats
will be after you!

7/07/2005 12:01:00 pm  
Blogger FransGroenendijk said...

Incidentally last week I did some reading on the subject of sugar subsidies. Brazil (some Brazil-based companies more precisely) are going to benefit most from abolishing the fixed price for European farmers.
Although in the long run free trade wil help the poorest (if they live to see it..) I am not glad with the ideological character of that policy.

In the end I think the developng countries are best helped by means to support their own cases at the WTO.

7/08/2005 01:08:00 am  

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