How much GNP is the life of a child worth?

Date: 14/03/02

Next week's United Nations development summit at Monterrey offers the EU the chance to lead efforts to combat poverty. Instead member states have embarked on excuses for inaction, writes Kevin Watkins, senior policy adviser for Oxfam.

IN THE land of the blind the one-eyed man is king. And when it comes to Europe's contribution to the fight against world poverty, the European Commission reigns over some acutely myopic governments.

Next week, those governments will be sending assorted development and finance ministers to Monterrey, Mexico, for the International Conference of Financing for Development.

Convened by the UN Secretary General Kofi Annan, the conference is a last-ditch attempt to mobilise the resources needed to achieve an ambitious set of development targets adopted two years ago at the millennium summit.

Those goals - known as the millennium development goals (MDGs) - include halving extreme poverty, cutting child deaths by two-thirds, and achieving universal primary education by 2015. Without an additional aid effort from Europe and other donors, none of the targets will be achieved.

Enter the Commission. It has proposed that EU governments use the Monterrey conference to announce an increase in aid. To describe the proposal as lacking in vision and imagination would be an understatement.

Briefly summarised, it calls on all member states to increase the ratio of aid to GNP from the current insultingly low level of 0.29 to a still-pathetic 0.33 by 2006 - less than half of the UN target rate.

And even this has been far too much for some EU governments. Aided and abetted by Italy and Spain, the German government last week sought finally to bury the Commission proposal.

The upshot: representatives of the world's largest aid donor community will arrive in Monterrey resembling emperors with no clothes.

They will provide vacuous declarations of commitment to the fight against poverty, take a few rhetorical swipes at the lamentable US aid effort, and come home without having even opened their wallets.

All of which is bad news for the world's poor. Dozens of countries are off-track for the MDGs. Take the case of child death. On current trends, the gap between the actual rate of decline in child mortality and the rate needed to achieve the 2015 target is equivalent to 55 million deaths between 2000-2015.

Numbers such as this have lost their power to shock. But each of these children will have a name - and almost all of the deaths represent an avoidable tragedy.

It is the same bleak prognosis in other areas. If current trends continue, there will be around 1 billion people struggling to survive on less than €1 a day, and at least 75 million children out of school.

Fortunately, trend is not destiny. None of these outcomes is inevitable. In studies prepared for Monterrey, the World Bank estimates the cost of financing the health, education and wider poverty-reduction programmes needed to achieve the MDGs at between €44-66 billion per year over ten years.

That figure is almost certainly an underestimate, concocted in the vague hope that donors might find the numbers palatable. The real costs are probably in the range of €110 billion a year.

Large as that headline figure may be, it has to be set in context. Ten years ago, at the Earth Summit, industrialised countries promised to raise aid budgets to 0.7 of GNP. If they agreed at Monterrey to reach this target over the next five years, it would generate an extra €144 billion. Effectively targeted at the poor, this would bring the 2015 targets within reach, and help to finance wider poverty reduction efforts.

Having pledged to increase aid, most of Europe has spent the past decade slashing aid budgets. As a share of GNP, aid has fallen by about one quarter over the past decade. This has contributed to chronic financing problems in the countries that are furthest off track for reaching the 2015 goals.

In per capita terms, aid to Africa has fallen from just over €33 to less than €22 in the last five years alone. Aid shortages have prevented the UN Secretary-General from fully funding an initiative aimed at combating HIV/AIDS, malaria and tuberculosis - infections that claim six million lives per year. And despite a commitment to finance a global education initiative, no new money has appeared.

Even if the Commission's proposal had been accepted, it would still have left EU member states far below the development assistance levels of a decade ago.

And it would have generated less than one-quarter of the resources needed to achieve the MDGs.

Instead of leading by good example, several major EU donors will arrive in Monterrey having announced further cuts in already emasculated aid budgets.

Both France and Germany reduced their aid commitment in 2000, as did Italy - a country that now vies with the US for the dubious distinction of bottom place in the league table for donor generosity.

Britain has been increasing aid, and current budget plans will raise the share of development assistance in GNP to 0.33. However, this falls far short of the standards set by countries such as Sweden, the Netherlands and Denmark, all of which spend around 1 of GNP on aid.

It is not just in aid quantity that the EU falls short. Both Spain and Italy combine a grossly under-funded aid programme with poor quality aid, tying over two-thirds of transfers to the purchase of goods and services delivered by domestic firms. Whatever the benefits for their commercial interests, tied aid is bad for poverty reduction.

The Monterrey conference provided the EU with an opportunity to display some international leadership in support of global poverty reduction efforts. Instead, governments have embarked on a bizarre display of petty squabbling and excuses for inaction.

Some, like Germany and Italy, claim that budget constraints rule out increased aid. Others - such as Spain - want a greater emphasis on private philanthropy.

Meanwhile, the familiar Greek chorus that 'trade matters more than aid' is being voiced across the member states in an effort to shift the focus away from aid.

Most of these arguments are specious. If Europe were to direct to the world's poor the subsidies that it currently lavishes on (predominantly the richest) farmers, we could more than double our aid effort easily.

And lectures about the benefits of trade are unconvincing when the EU's trade barriers are depriving Africa of around €1.1 billion annually.

In any case, the poorest countries will not benefit from trade opportunities without increased aid to build their education, health and infrastructural capacity.

The Monterrey conference matters above all because it provides an opportunity to prevent millions of unnecessary child deaths, to extend educational opportunity, and to lift people out of poverty.

But it also matters in a deeper sense. At a time when globalisation is on trial as never before, it offers the world's richest countries a chance to show that they have the resolve to extend the benefits to the poor.

Preview of the International Conference on Financing for Development, Monterrey, 18-22 March 2002.

http://www.un.org/esa/ffd/ http://www.un.org/esa/ffd/

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