ASEM 2000 People's Forum<br>Conference Page<br>People's Action and Solidarity Challenging Globalisation<br>Seoul, Korea, 17-21 October 2000

Success and Limits of North-South Cooperation in the Eradication of Poverty:
an Evaluation of the Role of States and International Institutions
and Some Perspectives for the Future
Jean Marie Fardeau

The issue on which I have been asked to give this presentation is too broad to be covered in ten or fifteen minutes. For this reason, I will focus my speech on three main concerns I have when international cooperation and reduction of poverty are at stake. These are:

1. The role of the States in the neo-liberal system
2. The false consensus among institutions around eradication of poverty
3. International cooperation, a marginal tool in the neo-liberal globalisation, but an ethical need

In conclusion, I will try to outline some perspectives for the future, some of them being already in progress.

1- The role of the States and the eradication of poverty

The weakness of the State is one of the main characteristics of the neo-liberal conception of development. The State is seen as an authority that limits the capacity of investment and the spirit of enterprise.

In the field of development cooperation, it is unfortunately the case on both sides: North and South. In the South, the implementation of structural adjustment plans since the early 1980's resulted in a drastic reduction of the role of the State in the indebted countries, which were the majority of the countries on every continent. The effects of this policy are well known: reduction of public services for the poorest share of the population. The States has not maintained public health system, public education and many other public services. The privatisation of State-owned companies, which could be justified in certain sectors, had and continues to have a tremendous social impact. As well, the level of unemployment has raised everywhere. The result of such neo-liberal policy appears clearly today: inequalities have never been so high inside each country and between countries. The only response to this social crisis has been the implementation of so-called "social safety nets", which have been unable to provide the poor and those who have been excluded from the economic development, with a minimum of power of purchase to avoid misery and marginalisation.

Three years ago, the World Bank in its annual report, rediscovered that the State could have an important role to reduce inequalities, and started to change - at least on paper - in its perception of the role of the State in social development processes.

In the North, the so-called donor States, which are much less generous today than they were some years ago, are also convinced that their role in the eradication of poverty should not be as prominent as what the NGOs and other sectors of society are thinking. Mr Clinton's statement, "Trade not aid ", is actually the credo of many politicians in European countries. A few months ago, the French president, currently President of the European Union, said that Mr Clinton was wrong. Mr Chirac claimed for a "Trade and Aid" policy, arguing that trade and aid are complementary. He was probably right but he unfortunately was lying. Since Mr Chirac became the president, in 1995, French aid level has decreased by 40%, to reach 0.3 of GNP, a level very far from the UN objective of 0.7%. But, in practice, the mainstreaming policy has not changed so far.

First remark: the States should regulate the neo-liberal globalisation, in particular through a fait taxation system and a just sharing of the public resources, but they often do not have the capacity to do so, either because the level of development is too low or because the elites do not want to share their wealth with the rest of the society.

2- The false consensus among institutions around eradication of poverty

You probably have heard about the new paradigm used by international financial institutions (WB, IMF) regarding "eradication of poverty". Let us think about it. What is the exact meaning of this new credo of the international institutions around the eradication of poverty? It is of course an ambitious and generous goal for humanity. But is the so-called "international community" (I mean the States and their institutions) really trying to give each human being the possibility to work and to sustain their family in dignity? Does it not mean to eliminate extreme misery to avoid criticism and rejection of the system by those who do not benefit from the economic growth and social welfare, and, above all, to avoid large flows of migrants from one poor region to another?

At the same time, poverty reduction is more and more seen in indebted countries as a new conditionality imposed by the Northern countries to those who need debt reduction and development assistance.

First of all, one should be reminded that at the UN Social Summit in Copenhagen in 1995, the Head of States committed themselves to eradicate extreme poverty by 2000, that is to say this year. Due to the lack of political will to put the resources needed (about 40 billions US dollars every year, above the current aid flow and foreign investments), OECD has adopted in 1996 a new target: to halve poverty by 2015. This shift in the objectives reflects already the real difficulty of the States and institutions to put reduction of poverty at the heart of their strategies. Moreover, this eradication of poverty, launched by Mr James Wolfensohn when he was appointed as the head of World Bank, should also be seen as a powerful tool to avoid the real debate around reduction of inequalities. The role of States and institutions should not be limited to the elimination of misery but should also take into account the urgent need to reduce inequalities. In a world where inequalities between the richest and the poorest have increased three times over the last thirty years, can we still expect anything from the free market ideology to reduce the increasing gap among societies and between societies? That is why I am a bit sceptical when I hear that eradication of poverty is the new mainstream of the international cooperation, when at the same time, the countries involved in development cooperation, support the expansion of the market economy which results to more exclusion.

NGOs and social movements, and among them trade unions, should welcome the fact when international institutions acknowledge the disastrous social effects of the structural adjustment policies. But, we really need to maintain the pressure to give the "elimination of poverty" a high political content, including reduction of inequalities.

3- International cooperation, a marginal tool in the neo-liberal globalisation, but an ethical need

According to official figures, international development aid is only reaching 40 billions dollars a year (and this amount is decreasing), far behind foreign investment and international trade. Development cooperation and aid are marginal tools in the landscape of international relationships. But, this marginal tool could play a crucial role by influencing other policies. In Europe, we are doing a lot of work to increase coherence of policies. How can we continue to provide public aid with the objectives to reduce poverty when at the same time our countries are imposing economic and commercial rules that are creating more poverty and more inequalities? Can we accept longer that a country like Luxembourg, at the heart of Europe, continue to benefit from the "grey economy" (illegal bank activities) when poor countries are attacked under the international WTO rules if they try to protect their economy or when poor farmers will soon be obliged to buy their seeds because of the privatisation of biodiversity by some transnational companies?

International cooperation, based on mutual respect and reduction of inequalities, should be the starting point of foreign policy. For the time being, it is more international competition than international cooperation that has the front role in the international relationships. We are here to alert the citizens from our two continents that such an option is a no-future option and an unethical option.

Conclusion

I would only like to stress some key points in my point of view. To improve efficiency of international cooperation implemented by States and institutions, one needs:

• to ask for a stronger role of the States and institutions in the regulation of economic and financial globalisation,
• to put in place a democratic control over the International Finance and Commercial Institutions, and not leave them in the hands of experts and economic forces which are not working for the common good,
• to include active participation of civil society in the definition of cooperation policy,
• to encourage people to people cooperation, and
• to develop more and more networks of reflection and action among civil society organisations (trade unions, associations, academics, churches and faith-based groups) that are the basis to build a counter power to the power of the private sector.

As you can notice, I have a lot of criticism to make on policies implemented by States and institutions. But I really believe that the increasing dialogue and, in certain cases, confrontation between civil societies and governments is a very promising way to increase quantity and quality of development cooperation.

Jean-Marie Fardeau, Secretary-General
Catholic Committee against Hunger and for Development (CCFD), Paris, France
Email: ccfd@ccfd.asso.fr