EU’s new growth-led development policy is flawed, says ActionAid

A new EU development policy unveiled today reveals an alarming shift, moving EU aid away from supporting poor people to end poverty and towards promoting economic growth. 

The plans could see the EU cutting its aid to Middle Income Countries – such as Zambia, India and Ghana – where 75% of the world’s poorest people live[1].

Aid money will increasingly be channelled into private sector investments with clear benefits for EU companies, but questionable impacts on poor people.

Laura Sullivan, EU development policy expert at ActionAid:

“We welcome the Commission’s clear focus on agriculture in response to rising global hunger. However its approach, with economic growth at its centre, is a flawed way of tackling poverty and injustice”.

“It assumes money from economic growth will trickle down to the world’s poor but this has been tried before and it doesn’t work”.

“In many countries, increases in high-growth industries like mining haven’t resulted in more jobs or money for poor people, leading instead to massive environmental damage and increased hunger. Is this the kind of growth the EU wants to promote?”

ActionAid is calling on EU decision-makers to look beyond growth and to keep tackling poverty as its core objective. The EU must acknowledge that with the majority of the world’s poor living in middle income countries, aid allocation cannot be based on GDP alone, and should ensure its own policies[2] do not violate peoples’ rights and jeopardise the EU’s development objectives.

Editors' notes

[1] If the EU bases its new aid allocation decisions on economic indicators such as Gross Domestic Product, countries like Zambia – where two thirds of the population lives on $2 a day – could be cut out. Despite having one of the world’s largest gaps between rich and poor, Zambia has recently been reclassified as a middle income country.

[2] Such as energy and trade policies