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Part 1:
Changes in European develoment policy

1. The different environment since 1989

Since 1975, the European Union (EU) has been maintaining a separate co-operation agreement with the so-called ACP states (Africa, the Caribbean and the Pacific). The objective of the "Lomé Treaty" (signed 1975 in Togo’s capital, Lomé), is "to promote the economic, cultural and social development of ACP countries". The co-operation contract is founded on three basic principles: equality of the partners, the sovereignty in decision-making and the security of relations. The instruments of co-operation serve to augment trade between the EU and ACP states, promote autonomous development, support the structural adjustment efforts of ACP countries, facilitate access to capital markets and support direct investment, in addition to compensating fluctuations in export proceeds.

The Lomé Convention obliges the contracting parties to co-operate as partners. Lomé is the most extensive co-operation model that exists between groups of states. Taking into consideration its predecessors (the 1st and 2nd Youndé Agreements), the model has been existing for over 30 years. However, it is currently going through a crucial stage of upheaval, a test phase.

This article discusses EU-ACP co-operation and its development. It further proposes suggestions to reform the prevailing model and presents options for Germany to actively contribute to reforming European development policy. One of the reasons of Lomé’s uniqueness is its inherent attempt to design a European, i.e. a common European development policy, thus exceeding the purely bilateral approach. Several critics have lately sought to portray bilateral aid as more appropriate. These critics – like the advisory council of the Federal Ministry of Economic Co-operation and Development – consider Lomé co-operation insufficiently effective, too bureaucratic, highly overburdened, and lacking sufficient control.

The criticism is thoroughly appropriate in some aspects: The need for reforms exists. However, restricting co-operation to bilateral, i.e. national levels implies the rejection of the European spirit and a common European development policy. At the same time, such essential achievements as dialogue and partnership, as well as decentralised co-operation, would all have to be given up, together with many other positive aspects of common policies. Considerable competences have been developed in this area over the past 30 years, new instruments and a basis of mutual trust have been created.

The premise of this study is that there should be a common European development policy in future, coupled with a reformed Lomé policy. From a German point of view, however, numerous reforms remain to be initiated if there are to be any prospects for Lomé. The model must depart from its post-colonial status and lead to co-operation between partners.

There have been increased discussions since 1989 with regard to Lomé’s future. This has been due to a shift in interests as far as Europe, the individual member states, and even the ACP nations are concerned. On the 9th/10th of December, 1991, the European Council decided (Maastricht Resolution) to realise the European political and economic union by the end of this decade. This decision has already given rise to the first attempts at re-structuring the European development policy, the principles of which are

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laid down in Articles 130 u to 130 y of the Maastricht Treaty. It is declared therein:

"The community’s policy in the area of development co-operation, which constitutes an amendment of corresponding policies of member states, promotes

  • the sustainable economic and social development of developing countries, especially of particularly disadvantaged nations;

  • the harmonious and gradual integration of developing countries into the world economy;

  • the fight against poverty in developing countries" [European Community/European Union: The Maastricht Treaty, Article 130u.] .

The Maastricht Treaty considers all developing countries as equal. It demands coherence between the community’s development policy and that of EU member states. This has its consequences, also for co-operation relations with ACP states.

Public opinion, EU representatives, as well as ACP countries, now 70 in total, still considered the fourth Lomé Agreement (which runs from 1990 to the year 2000), a milestone of development co-operation. However, the atmosphere in the EU is no longer euphoric. This is not so much a result of the hitherto little success of development co-operation; it rather has to do with the Maastricht Treaty that led to European unification, with the new GATT resolutions, as well as the founding of the World Trade Organisation (WTO). New constellations in the Pacific region, however (e.g. the Asian Pacific Economic Co-operation APEC), as well as regional co-operation in North America under NAFTA (North American Free Trade Agreement), contributed to the altered scenario. Co-operation between Europe and ACP countries is now confronted by new economic and strategic constellations and thus has to prove successful anew. Furthermore, the collapse of the Eastern block has resulted in new conditions within Europe. Eastern Europe will play a far more significant role in future, with development aid now flowing into the Eastern block as well. In addition, Mediterranean third world countries will in future enjoy more attention as compared to ACP states, owing to their proximity to the EU. These altered geostrategic circumstances have also reduced ACP influence in favour of important Asian countries (above all, the newly developing Asian countries, i.e. India and China). Additionally, Africa’s role as "hinterland" and buffer against communism is no longer applicable. ACP countries are facing a disadvantage due to their economic weakness and geostrategic insignificance as opposed to other third world regions.

With these new circumstances in mind, future co-operation between the EU and the ACP community of states is at question. The Lomé IV Agreement is effective through the year 2000. Time is running out and there is a need to re-define the shape of future co-operation. Through the 1993/94 Mid Term Review negotiations for a second Lomé IV financial protocol (1995–2000), the EU was able to initiate changes in the co-operation model (see Exposition 9). Brussels is pushing harder and harder to end preferential co-operation. Meanwhile, numerous experts are urging a revision of the Lomé model. Discussions concerning the "banana order" and subsidised beef and wheat exports to Africa, once again made it clear how much remains to be done to endow the Lomé convention with new dynamism. The fundamental question arises, however, as to whether the model has any perspectives at all today, considering that almost all the circumstances in geopolitics have changed. Development co-operation requires to be re-defined in such a way as to permit the integration of EU-ACP co-operation.

In the post-colonial era, Europe has played a prominent role in almost all ACP countries (most states are strongly tied to Europe as far as foreign trade is concerned, to a far greater extent than to Japan and the USA). Today, relations between the ACP group of states and European powers are influenced mainly by the Lomé Treaty and other bilateral agreements between EU member states and individual ACP countries [The Republic of South Africa and the Maghreb States are not part of the Lomé-Convention. The Maghreb States have a special "proximity" relationship (safeguarding raw materials supplies – oil and gas; migration measures, industri alisation) (comp. Bensidon/Chevalier 1993). EC-South Africa relations were subject to special conditions during apartheid. In future South Africa will play a far greater role as compared to all other sub-Saharan countries. This development will also have an impact on the Lomé-Agreement (see Hoekman 1995; Jenkins/Naudé 1995).]. The treaty takes both ACP demands,

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as well as EU interests into consideration. Post-colonial co-operation between the EC and ACP states came into being when the third world demanded a new world economic order (NWEO). The safeguarding of raw material supplies and strategic integration were the central motives behind the intensification of EC-ACP relations. From the point of view of the large economic blocks Europe, Japan and the USA, the ACP states no longer play any significant role. Due to their low per-capita incomes, they are hardly of any interest, not even as markets. The ACP’s declining relevance can particularly be seen, not only in their meager share in foreign trade (see Tables 13 and 14), but also in the rapid drop in direct investment (see Table 12, Diagrams 1 and 2, as well as Exposition 7).

Scattered across 3 continents, the majority of the 70 ACP states are located in Africa. The countries are highly heterogeneous in as far as their size, population, economic strengths, industrialisation levels and political systems are concerned; in this respect, ACP states have become greatly differentiated over the years. The ACP has for a long time stopped being a real union. A particularly strong distinction can be perceived between Africa’s least developed countries (LLDCs) and take-off countries, as well as between economically important and economically insignificant states. Owing to their colonial heritage, the ACP group of states seems to be nothing more than a post-colonial remnant. Today, these states exist as a group solely on account of their close co-operation relations with the European Union. The interests of the ACP group of states focus on the EU’s export markets (preferences), access to easy, favourable credits, development aid geared towards modernisation and industrialisation, as well as subsidy funds (SYSMIN and STABEX), in addition to strategic relations with their natural partner, the EU.

The European Union has become one of the largest economic blocks in the world. But it is not a mere union; there are various strong (and weak) nations with both nation states and interest groups exerting their influence within the EU. This also applies to European development policy, which is a balance of various interests. European development policy is part of an entire European policy of interests. At the same time, national approaches within the EU have been granted more leeway, a trend that has been observed for some time now. As such, a certain distribution of responsibilities seems to be taking place, with Germany in charge of Eastern Europe, Spain in charge of Latin America, the Mediterranean Third World assigned to France and Spain, and sub-Saharan Africa delegated to France and Great Britain.

EU interests in co-operation with partner countries can be reduced to the following essential aspects: mineral and fossil raw material supplies, relatively unrestricted import of tropical fruits and vegetables, markets for investment goods, finished products and luxury goods, as well as subsidised foodstuffs (such as meat, milk and wheat), which are, however, of marginal importance, in addition to securing the strategic interests of European states.

Today, France and Great Britain are the main protagonists, still pursuing strategic interests in ACP states. France has, to some extent, been able to exert massive influence on her former colonies by way of military engagement, investments, development aid and her great significance in as far as the foreign trade of African countries is concerned. The relationship is greatly augmented by monetary (CFA zone), as well as military and cultural co-operation, thus fostering very close clientelistic structures. France has intervened and participated in many African conflicts, in favour of francophile state leaders who have been in power for long periods of time. In many conflicts, France still tries to exert and maintain her influence, as in Rwanda, Liberia, Sudan, Zaire and the Pacific region. In many of her former colonies, France is still engaged in intervention policies, a fact that is

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easily proven. This policy has encountered increasing criticism, even within France.

The strategic interests of other European nations, on the other hand – with the exception of England –, are relatively minor. Great Britain maintains trade relations with certain regions of Southern and Eastern Africa, as well as several West African states (particularly Nigeria and Ghana), and the Caribbean, too. This also applies to strategic interests.

Germany’s interests are mainly – though not solely – economic in nature, which explains why she largely keeps out of political conflicts and silently tolerates French policy. German-French friendship obviously takes precedence over co-operation with ACP states. German interests can be divided into the following four categories: economic interests, security policy interests, ecological interests and interests in "values". Direct economic interest in ACP states is marginal and has been declining over the years. As such, foreign trade in Africa accounted for only 1.2% in 1992 (of which more than a third was carried out with South Africa, which is not a member of the Lomé Convention, and a fifth with Nigeria). Even as far as the Federal Republic’s raw material supplies are concerned, the ACP’s share is moderate, except in the case of a few important products (Manganese ore imports from Africa account for 75%, Chrome ore accounts for 71%, Bauxite: 57%, Hard coal: 29% and Titan: 28%). Several agricultural products are imported mainly from Africa, including cocoa, which accounts for 82%, and coffee, which accounts for 20%. Raw rubber accounts for 40% and timber for 28%. With regard to direct investment, Africa’s share made up a mere 1%, most of which went to South Africa. Even as sales markets, the ACP only play a minor role. In comparison, ecological aspects (tropical rain forests, deforestation, climate, soil erosion, environmental migration and sustainable development), are of far greater significance. Germany’s so-called "value interests" can be categorised into the following objectives: the satisfaction of basic needs, prosperity, peace, human rights and democracy. Incidentally, these aspects are embodied in the Maastricht Treaty, as well. As various examples have shown over the years, interests in values often conflict with economic interests. Germany should show greater engagement in its efforts to pursue a peace policy, promote democracy and eliminate human rights violations, – also within the framework of a European and a development policy. In the long run, ACP countries are also of interest to German politics: if the Federal Republic of Germany is to play a greater role in world security policy in future, she will certainly need to evaluate her economic, value and ecological interests in a different manner than she has done previously. Of particular relevance is the question of inasmuch German interests are compatible with those of France, as far as European development policy is concerned. French commitment with regard to world politics is governed mainly by her role in West and Central Africa. The cost of this policy is so high, that over the past several years, France has been obliged to Europeanise her policy and minimise costs. This "Europeanisation" also provides opportunities for Germany’s Lomé policy. The latter should take advantage of France’s desire for a European policy to make amendments in development policy. Several aspects ought to be mentioned with regard to change. These include human rights policy, industrial, trade and monetary policies, environmental protection and poverty control, co-operation with civil society organisations, all together a less hesitant reform in the Lomé policy (see part 2 and 3).

Other countries have either very little influence in ACP states, or influence that is regionally quite limited. Over the past several years, Scandinavian development policy has achieved very good reputation. Significant momentum for reform in EU development policy could, in future, radiate from that side, especially in connection with the shaping of rural development and poverty alleviation, as well as co-operation with women’s, environmental and civil society organisations.

European policy pertaining to Africa is governed, to a large extent, by France (and to a

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much smaller extent by England), a fact that also has an impact on EU development policy. Although the commitment of Germany, Scandinavia and the Netherlands cannot necessarily be perceived as philanthropic, strategic and economic relations still do not play such a significant role. Incidentally, purely economic interests are often an obstacle to strategic interests. Thus, concurrence is more likely to be seen between Germany and the USA on many levels, than between Germany and France.

Bilateral and common policies exist side by side within the EU, supplementing each other in several cases. Different interests contrast sharply in a number of issues, often leading to compromises at the lowest level. France especially – and in some cases Great Britain –, is extremely hesitant when it comes to reform and new ideas for development policy. with only minor economic or strategic interests, are therefore charged with great responsibility. Such states include the Scandinavian countries, the Netherlands and Germany. These are the states that could also give impetus to Italy, Greece, Spain and Portugal, and even give momentum to reform efforts in France.

Concerning the huge discrepancies in interests among the various European nations, it is particularly difficult to formulate, and even more difficult to implement a coherent European development policy. Over the years, this has led numerous protagonists to call for a coherent development policy. The actors involved in European development policy are essentially the EU Commission, the European Parliament, the Council of Ministers and the European Council. There are two headquarters within the Commission, which are in charge of development policy (Headquarters I [HQ I] and Headquarters VIII [HQ VIII]). HQ VIII has two essential tasks: it has the exclusive right of initiative as far as Lomé co-operation is concerned, and it is the administrative organ in charge of implementing decisions. In accomplishing the second task, the Commission relies on collaboration between Committees appointed by itself (the Commission) and national officials. These Committees meet on a regular basis to consult on matters related to planning, projects and programmes. There are Committees in charge of the European Development Fund (in which – according to the Lomé Treaty – both the EU and ACP member states are involved in decision-making), food aid and co-operation with Asia and Latin America. The diversity of decision-making bodies and interest groups naturally hinders the precept of coherence and thwarts efforts towards an efficient development policy [Comp. Reithinger 1995].

Various EU and EU-ACP institutions are involved in implementing Lomé co-operation. The EDF Committee is of central importance and is responsible for general programming, including programming at regional and state levels. Votum power within the EDF Committee is determined on the basis of the member states’ contribution quotas. Decisions of the EDF Committee are reached by a quorum majority. Control is exerted by the following bodies: the Commission, the Committee for Development and Co-operation, the European Audit Division, as well as joint EU-ACP institutions. Decisive influence, however, still lies in the hands of the EU member states [Comp. Reithinger 1995]. Previous attempts by the European Parliament, the Commission and several member states, to integrate the EDF into the EU Budget, thus consolidating the basis for a common European development policy with regard to ACP states, have failed due to French and British objections. The result is an impediment of a partially well-functioning European development policy.

Representatives of the EC/EU and the ACP group of states, view the Lomé Treaty as the beginning of post-colonial co-operation between partners of equal status, who, in their various stages of development, have expressed and further developed an interest in co-operation. This interest stems from the economic, social and political links which have evolved over history. These representatives claim it is only a par-

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tnership model that presupposes the equality of partners. Having emerged during a phase when discussions concerning the NWEO were underway, the Lomé model can be characterised as a mixed model, based on the theories of dependence and modernisation. It reflects vertical co-operation, i.e. co-operation between economically weak and economically strong nations. This co-operation takes the form of clientelistic relations. The clientele system offers the weaker partner the special chance of turning a weakness into a strength, i.e. the opportunity to draw greater benefits from co-operation. As such, collective clientelism is what Europe-ACP relations are all about. Collective clientelism offers the weaker partner protection against volatile markets. It is an asymmetrical relationship that can only exist between actors with an unequal provision of resources. Nevertheless, since 1989, there are clear signs that approaches have been made towards a partnership model (e.g. in decentralised co-operation and human rights issues).

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2. Experiences with the Lomé Agreements


The customs regulations that have been in effect since 1975, favour goods originating from ACP countries. This is achieved by duty and customs tax excemptions. This preferential customs system, however, has not been able to prevent the decline in the ACP’s share of imports to the EU. Both voluntary export restraints, as well as regulations pertaining to the origin of goods, have hindered diversification in ACP states. Furthermore, the Preferential Trade Treaty has in no way favoured changes in production and export structures geared at diversifying industrial production and exports. Apart from several exceptions, ACP states have an export structure that is almost identical to that of 1960 (Diagram 3). A number of proposals have been made on how to promote export diversification, including the improvement of tariff-based preferences, the abandoning of import quotas, as well as additional development aid aimed at diversifying production. These instruments, however, would not be able to accelerate the process of diversification because the problem that many ACP producers face is different. It is not the absence of markets, but the extremely high cost of production, coupled with extremely low productivity, insufficient knowledge regarding demand markets, a poorly developed product range and the hindrance of an export-oriented processing industry by states incapable of reform which lie at the heart of their backwardness. Only a handful of products (other than raw materials) have given ACP entrepreneurs any competitive advantage (e.g. garments, arts and crafts). Resolutions passed at the Uruguay Round have further liberalised world markets to an extent that the majority of Lomé countries are bound to lose an even greater portion of their share in trade (with the exception of Mauritius). The preferential agreement, however, is not only controversial because it has hindered diversification (with ACP states carrying out about 70% of their foreign trade with the EU, see Table 14), but also because it contradicts GATT resolutions. Whether in the short or long term, the Lomé preferential agreement will continue to be the object of renewed consultations between the WTO and the EU, since the model has today proved to be a central obstacle to development in the vast majority of ACP states.

Financial and technical co-operation

In the face of poverty and underdevelopment in almost all ACP countries, the EU development funds play a very important role in supplementing the national measures taken by individual EU states. Since 1975, EU development aid has expanded greatly within the framework of the Lomé Agreements. In Lomé IV (1990–1995), the total volume of EU financial aid [Plus the bilateral funds of individual EU states.] amounted to 12 billion ECU, of which 10.8 billion was allocated from the 7th European Development Fund (see Table 2). Since the 7th EDF, funds have been allocated exclusively as non-repayable grants. Only EIB (European Investment Bank) funds require interest payment, such that

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the grant’s share of the 7th EDF amounts to approximately 92%.

The EDF is not financed by the EU Budget but through contributions made by EU member states. Germany and France are traditionally the largest donors to the EDF (see Table 1). The major beneficiaries, however, were EU companies and individuals with approximately 82% (ACP states approx. 18%, see Table 1).

Out of the total EU aid (funds from bilateral development aid plus EDF), 45% are distributed to Africa (60% in 1980) and 26% to the Near East (approx. 12% in 1980). A clear shift to the disadvantage of Africa can hence be noted (Table 3). Other criteria also indicate a shift in focus as far as European development policy is concerned (Table 4): Of the total volume of EU aid, the proportion of EDF has dropped from 50% (1990) to approximately 33% (1993).

Within its development aid, the EU basically differentiates between conditional and non-conditional aid. Funds for conditional aid are negotiated at the outset of the Lomé Agreement between EU member states, the concerned ACP state and the EU. These funds are then held in a so-called National Indicative Programme (NIP). Conditional aid kept comprises development aid projects, promotion of regional co-operation for seven regions within the ACP states, programmes concerning health and AIDS control, aid for nucleus projects, industrial co-operation, development in trade and tourism, cultural co-operation, education and training, as well as structural adjustment programmes (see Table 2). The application of conditional financial and technical co-operation extends across all the above mentioned areas with relevance for economic policy. It also includes sector development and import programmes. The latter mainly appear as indirect financial aid, which enables countries to save foreign currency while importing necessary goods.

Non-conditional aid comprises funds for special loans, risk capital, STABEX and SYSMIN. It involves all expenditure that cannot be planned for at the outset of co-operation. The stabilisation fund for agricultural export products (STABEX) and the special fund for mining products (SYSMIN) are basic components of the co-operation agreement between the EU and ACP countries.

As outlined in the Lomé IV Treaty, the STABEX system encompasses 51 agricultural raw materials (Lomé I: 29 products, Lomé III: 48 products) and is aimed at compensating the shortfall in receipts for exports (e.g. in the case of price drops) to a certain extent (comp. Exposition 1 and Table 5). In Lomé IV/2, the funds allocated for this purpose amounted to 1.8 billion ECU. The EU imposed stricter control on the use of these funds in Lomé IV, which were to be employed particularly for diversification. Up until 1990, the allocated funds were in some cases be used for purposes other than those for which they were intended. In 1991, the most favoured countries included the Ivory Coast (receiving 18% of the funds), Cameroon (18%), Ethiopia (12%), Uganda (9%), Sudan (8%), Papua New Guinea (4%) and Madagascar (4%). Although the STABEX subsidy system had contributed to compensate for losses in proceeds, thus initially appearing to be a valuable instrument, its long-term effects are actually rather negative than positive, especially, since it has several inherent weaknesses: a) total payments are limited to specific ceilings, such that extreme drops in prices cannot be offset (in 1993, for example, transfer claims amounted to 473 million ECU with only 285 million ECU being available). b) The number of covered products is limited. Agricultural products that enjoy protection under the EC market regulations, are not included (e.g. sugar, tobacco). c) Due to a pre-determined dependence threshold (5%), there is hardly any motivation to diversify. Countries favoured by STABEX concentrate even more strongly on the production of STABEX goods, thus cementing mono-cultural structures. Countries that overstep their dependence threshold by diversifying their product range are punished [Non-signatory countries with no access to compensatory claims, are hereby disadvantaged as well.].
d) The payment of funds is rather sluggish at times, be-

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cause an agreement has first to be reached between ACP countries and the EU concerning mutual obligations. e) STABEX instruments are transfer payments to the government. There are no obligations attached to this development aid. STABEX transfers are thus particularly welcome in ACP states because they are non-conditional.

All in all, the impact of STABEX payments is rather poor and works to the advantage of only a handful of countries, particularly Middle Income Countries (states whose per-capita income is higher on average). Since STABEX is oriented towards commodities and not geared to underdevelopment criteria (e.g. per-capita income), the Lomé IV reform contributes more to an improvement in countries with a middle income.

A special fund for mining products (SYSMIN) was established for the first time in Lomé II. Countries whose main exports were mineral raw materials (e.g. Zaire, Zambia, Mauritius, Liberia, Jamaica, Papua New Guinea) were de facto excluded from the compensation system meant to subsidise agricultural raw materials. The establishment of the SYSMIN fund originates, above all else, from the EC’s interest in securing raw material supplies as smoothly as possible. According to the Lomé IV Agreement, the fund allotted 575 million ECU (see Table 6) as compensation for nine mineral products. SYSMIN funds act as an incentive to produce higher quantities of SYSMIN products. The funds are hence ineffective to foster diversification (see Exposition 2).

STABEX and SYSMIN have previously been considered the "holy cows of co-operation". But they are in need of fundamental reform, as was outlined above.

Structural Adjustment Programmes

The EU reacted to the Structural Adjustment Programmes (SAPs) with a special programme in favour of highly indebted and poor ACP countries. Since 1988, this programme has been providing quick cash aid, as well as aid that is not project-specific. Funds from this special EU programme are allocated on condition that SAPs are implemented. The funds are paid out under close monitoring from the World Bank and the IMF. In general, the funds are aimed at less drastic SAPs, while taking social components into consideration. Furthermore, SAPs should be co-ordinated on a regional level in order to augment intra-ACP trade. The equalisation grants established within the EU-SAP framework (see Exposition 3) should gradually be integrated into the macro-economic concepts of the concerned countries. The employment of equalisation grants is far from being sufficient to compensating the negative consequences of SAPs.

Industrial promotion

Article 17 of the Lomé IV Agreement outlines self-sustainable growth, as well as balanced and varied development as the objectives of industrialisation. Vertical and horizontal diversification of the national economy in particular should be promoted. However, a continuously decreasing amount of funds is set aside for this purpose. Co-operation is conceptionally concentrated in the modern sector. Funds for nucleus projects, which partly support small and medium-sized industries have shown very little change. The weaknesses of industrial promotion can also be clearly detected in the activities of both the European Investment Bank (EIB) and the Centre for Development of Industry (CDI). Both institutions are concerned with industrial development within the framework of the Lomé Convention.

The EIB (European Development Bank) is responsible for two types of loans: those from its own resources and risk capital drawn from the EDF. During the 1960’s and 70’s, the EIB mainly financed investments of large firms. This gradually began to change and in the 1990’s, funds for global loans were made available to local banks and financial institutions. These were to be allocated mainly to medium- and small-sized firms. Inherent to the EIB are numerous weaknesses due to a variety of factors,

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including the fact that the EIB – in contrast to the International Finance Corporation (IFC) – is neither directly present, nor active in ACP states. It is neither oriented to small and medium-sized industries in the informal sector, nor to industrial clusters.

The CDICentre for the Development of Industry, is a joint venture between the EU and ACP states. The main objective of the CDI is to promote industrial development and diversification, whereby contacts are to be established between investors from the EU and ACP states. In the Lomé IV Agreement, a total of 60 million ECU has been alloted to the CDI, i.e. 14.6 million per year (= 0.5% of the Lomé Budget). Owing to insufficient resources, the CDI can only play a marginal role. Furthermore, it displays structural weaknesses which include inadequate resources, the expenditure of half of the funds in Europe and the concentration of its activities in Brussels. The range of its activities is extremely wide compared to its scare financial endowment for individual countries. Finally, the CDI is marked by poor integration in the policies of other Lomé instruments as well as inadequate internal structures and the neglect of local capacity development in ACP states. In general, EIB and CDI efforts clearly show that industrial co-operation between the EU and ACP states is only intended to play a subordinate role.

Regional co-operation

The promotion of regional co-operation has played a significant role since Lomé I, a role that continues to grow. 1.25 billion ECU were set aside for regional co-operation in Lomé IV. The support programme emphasises the improvement of infrastructure. Regional indicative programmes, regional comprehensive programmes and project finance are available for seven regions within the ACP community of states. Despite some progress through promotional measures within the Lomé framework, regional co-operation shows insufficient orientation towards concrete support. This is mainly due to the fact that the traditional project approach is still applied. SAPs constitute a unique and particularly counter-productive problem. They are established on a national level and force the concerned state to adapt to conditions of international competition.

Democracy and human rights

In conducting its activities over the past several years, the EU has clearly demonstrated her partiality concerning the importance of democracy in co-operation with third world countries. One can easily construct several typical – sometimes overlapping – patterns of conduct, like human rights protection (applicable to most countries since 1990), exclusion (as in the case of Sudan), silent tolerance of human rights violations (as is the case with Nigeria), strategic weighing of interests (Nigeria, Zaire and Liberia) and clientelistic relations (francophile Africa).

Since the European Council Resolution of 28th November 1991, the Commission has acted in accordance with the so-called Budget Line B7–522, which is aimed at allocating funds to support democracy and preserve human rights. According to the resolution, the Community and its member states should grant high priority to a positive concept that promotes respect for human rights and supports democracy as well. Human rights initiatives could be actively supported in the following areas: in holding free and fair elections, in re-inforcing the administration of justice, in supporting NGOs and in decentralisation. In the case of severe human rights violations, the EU may establish a catalogue of gradual steps to take against the offender. These might range from diplomatic missions and changes in development co-operation, to the total suspension of co-operation, etc. Since 1992, approximately 15 million ECU have been allocated annually to support safeguarding of human rights in ACP states. It is obvious that no direct EU measures are applied in countries with severe human rights and democracy violations. Although a certain amount of progress has been achieved since 1989, economic interests obviously take precedence where significant countries are concerned. Less

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important countries receive much clearer signals from the EU as compared to states with significant economic potential (22% of all imports originating from the ACP came from Nigeria, especially oil). The following case study of Nigeria clearly brings it to the point: Over the years, Nigeria has often been engaging in severe human rights violations. The terrible climax was reached towards the end of 1995 with the execution of Saro Wiwa. Accused were international oil concerns, particularly Shell, as well as Abacha’s military regime that was alleged with murder of the human rights activist, despite numerous protests world-wide. This, however, did not lead to any sanctions. There was no freeze in funds, nor did the demanded economic boycott take place.

Analysing the prevailing policies, one detects the principle of double standards in the human rights issue. These can be identified through the different interests. The result is, that until 1989, corrupt dictators and countries with human rights violations were able to draw benefits from the political realism practised by the EU, the USA and individual European nations. The varied action taken against countries with human rights violations – compare Kenya and Nigeria – show exactly the present limits of consistent and coherent development policy.

The numerous EU human rights activities (e.g. elections observers) are certainly meaningful. The EU assumes an important function, which distinguishes her from the USA, for example. The EU could provide the decisive breakthrough for development co-operation based on the partnership principle and could also unambiguously move away from past mistakes. However, due to failed operationalisation criteria and guidelines, the implementation of political conditionalities appears to be only in its infant stage. It is also significant to note that many states and societies are currently undergoing a stage of decay which points to the question of which protagonists actually advocate for development and democracy. German policy has played a positive role at least in Africa which should be continued further.

The partnership principle is one of the most essential principles outlined in the Lomé co-operation model. No comparable instrument exists in any other co-operation agreement; neither bilateral nor multilateral development co-operation has models based on partnership. The limits of a dialogue model are easily recognised in the discussion about human rights, but also in other areas of development co-operation. In the partnership dialogue between the EU and ACP states, it has so far been difficult to distinguish at which point human rights violations and democracy were really made a topic (see Exposition 8). As far as human rights issues are concerned, the interests of leaders in many ACP states have been and still are fundamentally opposed to the EU’s concept of human rights. Incidentally, EU member states have different perceptions about calls for more democracy and about a cease of all human rights violations. Even then, France’s strategic interests, for example, stand in the way of her own human rights interests. The partnership principle abuts on limits as far as state representatives, officials and pre-determined delegates are assembled in partnership organs. Parliamentarians from ACP countries are rare to come across. There have long been demands for partnership dialogue that includes development and environmental NGOs and elected representatives as well. These demands, however, have remained unaddressed, even in theory.

Co-operation agreements between the EU and third world regions should contain institutional regulations. It is also worth asking which organisations and institutions should be involved in regulating highly complex problems. The European Parliament and civil society institutions from the third world should definitely be involved, in addition to NGOs from the North and independent observers.

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3. Is there a future for Lomé?

ACP states and the EU maintain a historically grown network which has, however, fostered structural heterogeneities, asymmetries and hindrances. Co-operation should aim at preventing

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further marginalisation of ACP states. This has not been achieved by Lomé co-operation due to the hitherto limited impact of instruments. Furthermore, if the instruments did take effect, it was as a result of false signals and incentives which adversely contributed to the reinforcement of asymmetries and structural heterogenities. Self-proclaimed goals – poverty alleviation, the encouragement of self-sustainable economic structures and the promotion of democratic structures – were only envisaged, at best. Problems may have been alleviated through certain projects and programmes or – in extremely critical situations – through emergency and food aid as well as stabilisation funds. This cannot, however, justify the extension of the Lomé Convention. Clientelistic relations, strategic and economic interests, play too large a role in the development co-operation outlined in the Lomé Convention. These interests are an obstacle to the development concept, poverty elimination, the encouragement of industrialisation processes and the establishment of coherent structures. Despite all the changes, ACP countries still bear the burden of typical "colonial" models of specialisation in trade relations. There is very little chance of being able to produce and export more industrial goods in the short and middle run.

How can co-operation carry on in the face of these experiences? Three possibilities are discussed below:

Geostrategic dependence

According to the theory of mutual dependencies (the EU has an interest in a strategically relevant hinterland, while ACP countries seek the continuation of a historically evolved clientelistic relationship), the model could continue to exist as before. France, in particular, favours the continuation of co-operation on strategic grounds. Gradual reforms could be achieved in this model. Fundamental problems, however, would continue to exist. Further liberalisation of world trade and WTO concepts would considerably augment the need for transaction funds to compensate for further marginalisation. However, the current level of capital provision is not sufficient to cover such compensation. It seems rather doubtful that the EU would be prepared to undertake this. At the most, safeguarding raw material supplies might be of significance to the EU. This would certainly be guaranteed as effectively, if agreements were to be reached with the few countries in possession of these supplies. As such, the continuation of Lomé co-operation in its current form depends, above all, on balancing varied interests within the EU and not on the wishes of ACP states for compensation.

Strategic co-operation

The discussion about co-operation has suffered from the fact that the constant expansion of hegemonic EU decision-making competencies was – and continues to be – presumed – this also applies to discussions between the EU Commission and representatives of ACP countries. The weaker, dominated parties criticise this neo-colonialism, the power of money and the coldness with which the business-like negotiations are carried out. More recent approaches of strategic alliances of companies now indicate that dependence has its entrepreneurial advantage; autonomy gains. In (partnership co-operation) systems the dependence of dominated states is actually reinforced in some areas in order to achieve autonomous leeway in others. The vast majority of ACP states are dependent on the exportation of raw materials. The weaknesses of the post-clonial specialisation model could have previously been turned into a strength, since ACP countries were then of utmost strategic importance in the East-West conflict. Today, ACP countries could achieve autonomy gains through the significance of tropical rain forests in the world climate, for example, or through EU dependence on energy and raw material supplies, through the pressure of migration and from the competitive relations between the USA and Japan. In general, however, there has been a considerable decline in the autonomous leeway of ACP states in asserting changes in regulations, a trend that has been observed since 1989.

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Interaction nets between the EU and the ACP exist through joint institutions. Further embedding the spirit of mutuality into the various conventions would be required in such strategic alliances, e.g. in order to achieve common ground for monetary co-operation, to implement humane structural measures, to safeguard energy and raw material supplies, to enhance responsibility of the world community in dealing with resources and the environment, particularly with regard to the future use of tropical rain forests and in containing civil wars and the flow of migration. Such a concept takes the historically evolved "natural" relations into consideration and clearly reveals that one is dealing with "unequal" partners (with hegemonic power structures). These partners have global responsibility (environment, poverty). The autonomy gained by the weaker co-operation partner would be augmented by overcoming traditional barriers and a common interest in solving environmental and resource problems, while the scope of co-operation strategies widens. Such strategic co-operation cannot be realised in the face of events that have taken place over the past decade. The EU and ACP states did not take the opportunity to secure strategic co-operation. Faced with globalisation and the formation of the triade block, strategic co-operation is fairly improbable. No efforts whatsoever have been detected among co-operation partners to achieve this perspective.

Exclusion of ACP countries

There is a great danger of "external exclusions" – i.e. marginalising Africa even further. Significant arguments pointing in this direction include the fall of the Soviet Union as a strategic opponent of the OECD community, liberalised world trade in which ACP countries continue to lose and the creation of the triade whose centres are Japan, North America and the EU. Development policy reforms are at a crucial stage. The special relationship between the EU and ACP countries is of importance only to France. The EU development policy has shifted from a preferential and subsidy-based relationship with the ACP, to a "normal" economic and co-operational relationship as is the case with Latin America, Mediterranean third world countries, Asia and Eastern Europe. Hierarchical relations are to be set off. What will take their place remains to be seen. The latter development currently seems to be the most likely of all possibilities. The Maastricht Treaty’s precept for coherence and complementarity compels EU member states to better co-ordinate their development policies. A "far-reaching" policy and instrument re-orientation [Reithinger 1995: 387; comp. also Dauderstädt/Kesper 1994.], i.e. elimination of programme and instrument fragmentation, removal of planless duplications in common and national development policies and the reinforcement of planning and implementation of EU programmes. The rigorous application of the Maastricht Treaty would lead to the discontinuation of the model. Whether there will be a transition phase allowing for adjustment, an introduction of new instruments and other forms of co-operation is hardly foreseeable in the face of varied concepts within the EU and the currently more important debates on the economic and monetary union. There is a rather great danger of "a muddling-through" ensuing in EU development policy. If the ACP remains in the state of lethargy that has been observed for years, not even the long overdue discussions on the future of Lomé will be held, let alone discussions on its perspectives. Under such circumstances, political realism without solidarity would be the final result [Comp. Dauderstädt/Kesper 1994: 11.]. This negative perspective could be countered by a fundamental reform that envisages the principles of partnership, democracy and fair trade relations. Herein lies an essential option for a German contribution towards Lomé reform.

© Friedrich Ebert Stiftung | technical support | net edition fes-library | April 2002

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