Why Dutch minister backs law of percentages to win aid war

Date: 19/07/01

Hague development minister Evline Herfkens tells David Cronin that the new EU presidency's approach to fighting poverty is a mistake

THE term "development aid" doesn't conjure up images of fun and games. Yet Dutch minister Evline Herfkens argues that many EU states have been keener to push their own "hobbies" than to achieve tangible results in reducing the number of people who live in extreme poverty.

Since taking charge of the development portfolio in Wim Kok's government in 1998, Herfkens has reduced the number of poor countries receiving Dutch guilders from 80 to 20. It is far better to do a limited number of things well than a lot of things badly is the logic.

It is a lesson, she believes, which most other EU countries have failed to grasp. "Member states are a nightmare," she says. "Every [EU] presidency wants to put its own new ball on the Christmas tree of priorities for development cooperation. And that's a really bad idea."

She heaps particular scorn on Belgium's decision to use its current stint at the Union's helm to propose that a tax on foreign exchange transactions, with the revenue used to fight poverty. The so-called Tobin tax - named after US economist James Tobin, who originally devised the idea - is a "non-starter", she argues, because it won't win international backing.

Rather than floating new suggestions, the Belgians ought to be focusing on how existing commitments are not being met. All 15 EU countries are officially in favour of the UN plan for allocating at least 0.7% of their gross domestic product (GDP) to aid, but only four - Denmark, the Netherlands, Sweden and Luxembourg - are currently hitting that target. If the rest followed suit "we could have dealt with the debt crisis years ago, without a problem," says Herfkens. "There would have been no need for a global health fund [being suggested to tackle AIDS and other major diseases]. All these issues would be solved the minute you succeed in getting Europe to meet its 0.7%." While most of her EU counterparts have to go cap in hand to their finance ministries, the Dutch systematically allocate 0.8% of their GDP to aid.

When economic growth turns out to be higher than predicted in a given year, the amount is increased automatically. About €3.7 billion has been earmarked for this year, €272 million more than in 2000. To benefit from her country's largesse, Herfkens insists on two main criteria: that poverty is endemic among the general population of the recipient country and its government is endeavouring to root out corruption in the ruling classes. "Our ultimate goal is that money won't leak away if we send it to a health minister, so we can then just send him a cheque." Support for Ethiopia and Eriteria has been temporarily frozen because of the conflict between the two states.

Herfkens agrees with EU Development Commissioner Poul Nielson that one of the biggest shortcomings of the Union's anti-poverty efforts is that they often clash with its activities in other policy domains. She cites the example of a recent Commission paper, which concluded that the fisheries agreements the Union signs with developing countries can be inimical to the latter.

She feels that Nielson, a fellow Social Democrat, is doing a good job under difficult circumstances and readily admits that the Dutch reforms cannot be simply replicated in Brussels. The Commission cannot allocate funds to a select number of states because it is locked into a formal relationship with the 71-member African, Caribbean and Pacific (ACP) bloc.

But both the Commission and individual member states could devote far greater energy to finding common ground with other donors, she says, instead of feeling the need to compete with them. Increasingly, Dutch guilders are channelled through the development ministries of other states, particularly Britain's, without any Dutch involvement in the day-to-day running of the projects concerned. EU countries "shouldn't get boxed in behind their own blue flag with golden stars," she adds.

Herfkens was The Hague's representative at the World Trade Organisation in Geneva before her present job. She is adamant that its next round of global trade talks must concentrate on development issues.

Yet she doesn't concur with concerns voiced by development campaigners that hardship will increase if developing countries are required to subject basic natural resources like water to free trade, as proposed by the Union. "I find it's very ideological - on both sides of the debate - to care about if [water delivery] is public or private. In many developing countries, the public sector has been extremely weak. If you can deliver services to the poor by involving the private sector, what's wrong with that? Who cares, so long as you can increase the number of people who have access to clean drinking water?"

Interview with Dutch Development Minister Evline Herfkens.