EU signs off new plans on poverty eradication

Wednesday, May 16, 2012 - 08:06

EU Development Ministers signed off this week on new plans to step up the EU’s role in poverty eradication, which had been in the pipeline for some eighteen months. Throughout this time ActionAid and its partners have been working with the EU institutions to see these plans develop in a way that is truly beneficial to people living in poverty.

The ultimate agreement on the Agenda for Change brought with it a number of very positive outcomes for the poor and real achievements for the Danish Presidency, as well as the Commission and other Member States:

  • The return of a strong rights based approach to development policy
  • Strong reference to gender equality through policy and political dialogue, mainstreaming and specific actions
  • Reaffirmed commitments to the EU’s 0.7% aid commitments
  • Recognition of the strong potential for pro-poor growth through support for sustainable agriculture (albeit without any reference to support for smallholder farmers which sits in the EU’s Food Security Framework

However not everything within the Agenda for Change has positive potential for poverty eradication. ActionAid is somewhat concerned about how the EU plans to raise more money to implement its development objectives.  In future much more aid will be channelled through the private sector to leverage more funding. However it is not clear how this leveraging will see aid reaching the poorest.

ActionAid does believe that aid can have a catalytic role, but that it could be much more effectively achieved by using EU development aid to support partner countries’ own efforts to raise their own funds e.g. through tax systems.  

Even more potential lies with the reform of tax systems, which would tackle the problem of tax dodging by multinationals in the developing world. Developing countries lose more to tax dodging than they receive in aid each year. Tackling this would free up literally billions in terms of development finance for the poor.  

Another key issue is how the EU will implement its so-called ‘country differentiation’ policy. The policy will see the EU phase out its aid to a list of middle income countries by 2014. ActionAid agrees with the European Commission’s proposal to focus most of its aid on the poorest. But the emphasis needs to be on the poorest people, not the poorest countries, which are not one and the same. The majority of the world’s poor today live in middle income countries. These countries in many cases experience high levels of growth. But that growth is not being enjoyed by the poorest, who are held back by unequal opportunities and power relations within society. Dropping support to those people in the coming two years will have major implications for the global fight against poverty, which the EU needs to be aware of.

The Agenda for Change is still in framework form. It will take greater shape in the coming months and be implemented with EU’s funding through the 2014-2020 Multi-annual Financial Framework.  ActionAid will be working to ensure that this crucial implementation phase remains true to the achievement of human rights, gender equality, tackling inequalities and poverty eradication.