APPENDIX 24
Memorandum submitted by Christian Aid
and the Catholic Agency for Overseas Development (CAFOD)
EXECUTIVE SUMMARY
Process
CAFOD and Christian Aid generally welcomed the
process of in-depth consultation, involving:
— an opportunity for written submissions;
— meetings and seminars with civil
servants involved in drafting key sections of the White Paper;
and
— meetings at NGO director level with
the Secretary of State on various aspects of the White Paper.
Christian Aid and CAFOD felt that, broadly,
NGOs were listened to with respect and, while we still have serious
concerns over aspects of the White Paper, accept that consultation
was undertaken in good faith. Our main reservation with the consulation
process was the lack of opportunity to comment on a pre-publication
draft of the paper, which weakened both the consultation process
and the quality of the debate following the White Paper's release.
Output
The memorandum compares the key recommendations
of the CAFOD and Christian Aid submission with the text of the
White Paper. Of 33 key recommendations contained in the Christian
Aid and CAFOD submission, we were pleased with the White Paper's
response on 7, disappointed on 13, and our cup was half full (or
half empty) on a further 13.
It is worth noting, however, that a large number
of issues raised in the White Paper were not raised in the submission,
and that many of these were welcome. Examples include the untying
of aid, the proposed new International Development Bill and encouraging
pro-poor research in areas such as communications or pharmaceuticals.
There are a number of issues on which there
remain quite fundamental differences of approach between Christian
Aid/CAFOD and the Government. The three key areas of difference
are the approach to economic liberalisation, inequality and debt.
— On liberalisation, the White Paper
maintains the Government's stance that liberalisation is, in general,
the most appropriate policy response to globalisation, where CAFOD/Christian
Aid take a more nuanced and sceptical approach. Some of the evidence
used in the White Paper to back up the arguments about liberalisation
seems to be rather partial and selective.
— On inequality, Christian Aid and
CAFOD remain convinced that achievement of the International Development
Targets requires a more robust approach to tackling global inequality
than is apparent in the White Paper.
— In contrast to the White Paper's
optimistic stance on debt relief, CAFOD and Christian Aid are
of the opinion that the HIPC 2 iniative will not deliver enough
debt cancellation and, in a number of countries, this shortfall
will materially affect the achievement of the international development
targets.
In the coming years, we will be working with
government to ensure the implementation of policy in some areas,
and continuing our discussions over issues on which we have yet
to agree. But overall, CAFOD and Christian Aid's conclusion is
that the White Paper represents an important step forward on the
path to achieving the International Development Targets.
DID THEY
LISTEN? COMPARISON
BETWEEN CHRISTIAN
AID/CAFOD SUBMISSION
AND THE
FINAL WHITE
PAPER ON
GLOBALISATION AND
DEVELOPMENT
1. Process
CAFOD and Christian Aid generally welcomed the
process of in-depth consultation, involving:
— an opportunity for written submissions;
— meetings and seminars with civil
servants involved in drafting key sections of the White Paper;
and
— meetings at NGO director level with
the Secretary of State on various aspects of the White Paper.
Christian Aid and CAFOD felt that, broadly,
NGOs were listened to with respect and, while we still have serious
concerns over aspects of the White Paper, accept that consultation
was undertaken in good faith.
Our one major reservation regarding the consultation
process was the lack of any opportunity to comment on a draft
paper. At no point were the agencies officially shown anything
beyond the initial very general set of bullet points. These were
significantly different in several respects from the eventual
shape and content of the White Paper, making no mention, for example,
of tied aid or the need for new legislation. This necessarily
weakened the quality of the input, dialogue and the consultation,
and stands in noticeable contrast to the process involved in this
year's World Development Report, where the publication of an early
draft galvanised a good deal of discussion and debate and set
a new international benchmark for inclusive policy formulation.
Moreover, NGOs—even those that had made detailed and lengthy
submissions - did not receive an advance copy of the White Paper
under embargo before publication, and were forced to respond to
media enquiries on the day of publication without having had the
time to consider fully the Paper's content. This was not the best
way to encourage an informed debate.
Christian Aid and CAFOD also felt that one of
the worthwhile aspects of the exercise was that it became a catalyst
for continuing a process of internal research and reflection,
which undoubtedly strengthened our organisations' understanding
and analysis of the links between globalisation and development.
2. Output
The table below compares the key recommendations
of the CAFOD and Christian Aid submission with the text of the
White Paper. It is worth noting, however, that a large number
of issues raised in the White Paper were not raised in the submission,
and that many of these were welcome. Examples include the untying
of aid, the proposed new International Development Bill and encouraging
pro-poor research in areas such as communications or pharmaceuticals.
There are also some cross-cutting issues which
do not lend itself to a tabular analysis. These are:
— the approach to economic liberalisation;
These are discussed separately in the third
section of this memoranda.
| CAFOD/Christian Aid Submission
| White Paper[20]
| Christian Aid/CAFOD Comment |
General Overview
Economic reforms are a means to an end. Trade and investment reform should be seen as a means to the end of human development and the elimination of global poverty, reflected in the International Development Target of halving global poverty by 2015.
| 229."We will also urge the WTO to commit itself, with the rest of the international community, to achieving the International Development Targets. This would send a powerful signal of its commitment to poverty reduction and acknowledge that trade is a means to an end, not an end in itself."
| The dialogue between NGOs and government has helped forge a common view on the purpose of trade. However, DFID still tend to assume that increases in the total volume of trade will lead to poverty reduction, while NGOs pay more attention to the micro-level impact of trade policy and the distribution of increases in trade between sectors and groups of people.
|
Policy reforms should be based on experience, evidence and data, and be guided by national poverty reduction strategies.
| 8."development strategies must be adapted to local circumstances and must be nationally owned and nationally led by developing and transition countries."
| While this is encouraging, the thrust of much of the rest of the document pushes for a similar approach (liberalisation, though at differing speeds) in all countries. Respect for national difference does not appear to extend to the idea that governments may decide that protection of certain groups or sectors may be the best path to poverty reduction. (See for example, para 90)
|
Far greater attention should be given in policy formulation to issues of equity and redistribution, as well as to the nature of growth.
| 27."Many believe that globalisation causes rising levels of inequality and poverty. The best evidence to date suggests that there is no systematic relationship between openness and inequality, or between growth and inequality."
| Disappointing lack of priority given to redistribution, and lack of attention paid to equity at an international level. See below for discussion of this central issue.
|
Finance and Capital flows
Broaden the debate on reform of the global financial system to allow greater participation by developing countries and civil society organisations, and ensure that technical assistance enables appropriate diversity in policy making.
| 181."The FSF [Financial Stability Forum] should continue to involve non-member countries in working group activities which relate to them and through consultation exercises where developing countries have particular views on a piece of Forum work."
| The proposals stop short of discussing developing country membership of the FSF itself (rather than inviting them to join specific working groups)
|
Review the process of deregulation. A balanced approach, based on empirical research and experience, is preferable to an ideologically driven push for deregulation at any price.
| 162."The UK Government favours a more country-specific approach to capital controls, and a gradual approach to the opening up of capital accounts."
| A more nuanced approach, but still sees capital account liberalisation as the eventual aim, rather than merely one of a range of options for ensuring capital flows are pro-poor.
|
Improve regulation of capital markets in industrialised countries in order to curb volatility and reduce global poverty and inequality.
| 178.Supports introduction of collective action clauses into bond contracts
180.Supports FSF proposals for "reforms to the regulation of institutions that provide credit to highly leveraged institutions as well as raising the standards of financial supervision in offshore centres."
| Welcome first steps towards putting the North's own house in order on issues of financial volatility.
|
Establish an International Debt Standstill and Work-out Procedure for dealing with financial crises.
| 177.In crisis resolution situations, "private sector lenders must expect to play a part."
| A disappointing and minimalist treatment of a crucial issue. Exhortations to the private sector to "take a hit" in crises are unlikely to be sufficient.
|
The International Monetary Fund (IMF) and World Bank should make it apparent to governments and civil society organisations that sound policies will be acceptable to their boards, even when they depart from the economic policy prescriptions of traditional structural adjustment programmes.
| 164.Restates the government view that Chilean-style "speed bumps" on short-term inflows are advisable only as a temporary measure
169."there is an important role for IMF medium-term lending in middle income countries in order to tackle deep-rooted structural reform. But we believe that IMF programmes should take better account of their impact on the lives of the poor."
171."We will encourage the IMF to take greater account of the relationship between stabilisation, structural issues, poverty and growth in programme design in low and middle income countries. The two institutions should also support open and broad debate within countries about the design of their policies, and encourage independent assessment of the impact of these policies on the poor and on the environment."
| A welcome shift in emphasis (and implicit criticism of the IMF) away from a dogmatic approach to liberalisation, although liberalisation is still seen as the eventual best option for the poor in all cases. In Christian Aid and CAFOD's view this is a conclusion not warranted by actual developing country experience (see discussion on liberalisation below).
|
Technical assistance and capacity building should be provided to both governments and civil society organisations to enable them to engage constructively in the new approach to debt relief based on national poverty reduction strategies.
| 308."The UK will work with other development agencies to provide support to at least 12 partner countries by 2004 to develop and implement poverty reduction strategies."
311."The UK Government is committed to working with others to build the capacity of governments to lead the formulation, implementation and monitoring of the Poverty Reduction Strategy process, and to ensure full participation of civil society. We will encourage development NGOs to strengthen their links with civil society in developing countries - so that faith groups in particular are empowered to lobby for a strong poverty reduction focus in government policy."
| CAFOD and Christian Aid welcome the Government's encouragement in this area. In December 2000, CAFOD organised a conference at the Vatican for Church representatives from 21 countries, including six archbishops and eight bishops, to discuss Church involvement in the PRSP process.
|
Investment, Competition and the Private Sector
Existing international guidelines on corporate social responsibility should be strengthened, and an international monitoring body should be established, which has the power, in extremis, to impose sanctions on individual companies.
| 64."we will legislate to give UK courts jurisdiction over UK nationals who commit offences of corruption abroad."
66."We will introduce legislation to strengthen the law on money laundering, ensure financial institutions uphold their commitments under the legislation and establish good practice, and permit the restraint of assets at an earlier stage in the investigative process."
196."From April 2001 the UK will have new powers to exchange information with the home tax authorities of non-residents."
| While falling short of a more comprehensive approach to international regulation of corporate social responsibility, these are welcome unilateral steps, demonstrating a real commitment to ensure private sector activity benefits the poor. The lack of a comprehensive approach and reliance on voluntary initiatives is particularly worrying given the heavy reliance on private sector solutions to many of the problems identified in the White Paper (e.g. development of new drugs, provision of telecommunications infrastructure).
|
Complementary moves to support self-regulation by responsible companies should be encouraged.
| 200.Government support for voluntary initiatives such as the Ethical Trading Initiative
201."The UK Government strongly supports the revised OECD Guidelines for Multinational Enterprises."
203."The UK Government also encourages major companies to publish information on their environmental, social and ethical policies." [eg via recent reforms to Pension Fund reporting requirements]
| The Government's energetic support of voluntary initiatives is exemplary.
|
| | 204. "We will be working with business to produce an integrated strategy which will consider where voluntary initiatives by business can add most value, and what should be done to promote best practice in global supply chains and in the operations of business in developing countries."
| |
Governments in developing countries should be allowed to regulate investment to meet nationally-agreed poverty reduction strategies.
| 186.Support for an international investment agreement based on the core principles of transparency, non-discrimination, a degree of investor protection, and the extent to which investment incentives and performance requirements can be used.
272.On the environment, "voluntary action is not enough. Without effective regulation in developing countries, many companies, not least many national and state-owned enterprises, continue to degrade the environment."
| CAFOD and Christian Aid are concerned that this formulation places more weight on the restraints which should apply to developing country governments when regulating foreign investment than on the activities of investors. Experience in East Asia (see discussion below) shows that "non-discrimination" can be an obstacle to developing a national industrial base. There appears to be some inconsistency in the White Paper's treatment of this issue, between the social responsibility and environment chapters.
|
The UK Government should encourage the EU and other parties to support the development of an international agreement on competition.
| 189."The UK Government and EU partners are committed to looking at these issues within the WTO and reaching an agreement on international competition policy. The core element of such an agreement would be a requirement on all countries to introduce competition law."
190."As with investment, the law would need to be based on the principles of non-discrimination, national treatment and transparency. The agreement should also reflect the needs of countries at different stages of development, consensus on handling issues such as cartels and abuse of market dominance, a commitment to co-operate across competition authorities (through the sharing of information) and increased technical assistance."
| |
Trade
The agenda for any genuine "development round" of global trade talks should be based on the concerns of developing countries, such as implementation and anti-dumping issues.
| 232."The world's poorest countries have much to gain from a broad-based multilateral trade round, and would be badly hit by a retreat into trade protectionism."
234-5: A broad round should include "substantial cuts in high tariffs and in trade-distorting subsidies, particularly for those sectors of most importance to developing countries" as well as "industrial tariffs—particularly textiles and clothing, rules on anti-dumping, government procurement and trade facilitation (streamlining of customs procedures). We think it should include investment and competition too. It should also clarify the relationship between trade and multilateral environment agreements."
| Based partly on discussions with numerous delegations in Geneva, Christian Aid and CAFOD disagree strongly with the Government's argument that a broad round is in the best interests of developing countries. Moreover, developing countries do not share this view. Rather, the priority should be to put right the injustices and distortions of current agreements, and to address the issue of developing country negotiating capacity in the negotiations already under way on agriculture and services, before going on to any new issues. Even the EC and its chief trade negotiator, Pascal Lamy, have recently backed away from their former insistence on a broad round. However, the Government does give welcome support for the current discussion on implementation issues surrounding the Uruguay round agreements (para 237).
|
Future trade and investment agreements should take proper account of the differences between countries, and of the requirements of national poverty reduction strategies.
| 238."We will support an approach that recognises more explicitly that WTO members are at different stages of development. To help countries manage their commitments we will press for special and differential provisions to be real and binding, and for any new WTO rules to reflect countries' implementation capacity."
| The differences between countries should not only lead to differences in the time given for implementation of agreements, but on occasion to differences in the actual commitments made by countries in the WTO, allowing developing countries to retain the flexibility to use a variety of trade policy instruments to pursue their national poverty reduction strategies. It is not clear if DFID's view of special and differential treatment extends to differences in the agreements themselves, or whether it is limited to differences in implementation deadlines for countries at different stages of development.
|
| | 312."Future poverty strategies should be framed within the global economic context with links to trade, finance, investment and the new technologies and take full account of environment sustainability. PRSPs must also become implementation mechanisms for countries' long-term development strategies."
| Though we fully endorse the idea of nationally based development strategies, the possible contradictions between this and an approach which assumes one particular policy stance to be the right one have already been noted.
|
The UK Government should lead efforts in the WTO to conduct a thorough assessment of the gains and losses of recent trade agreements.
| No commitment
| This is a disappointing aspect of the White Paper, particularly given the Development Committee's finding in its recent report on Seattle that "We are astonished at the lack of empirical study of the Uruguay Round on developing countries. Adequate resources must be provided to fund such a review."
|
It should also support the introduction of a system of prior social and environmental impact assessment in future trade negotiations and agreements.
| 256."We support the undertaking of sustainability impact assessments of trade policy changes and will help developing countries to integrate environmental management into their export strategies."
| It is not clear whether this is a commitment on environmental or environmental + social impact assessment. Only the latter is logically consistent, but would also require a clearer backwards-looking approach to evidence, as discussed in the previous point.
|
The EU should grant duty-free access to all (not "essentially all") goods from least developed countries.
| 244."The UK has consistently supported duty-free access for LDCs, and is pressing for EU agreement for the Commission's proposal as soon as possible."
| CAFOD and Christian Aid welcome the UK's leadership on this issue, but are concerned by recent signs that the Commission is backtracking under pressure from the sugar lobby.
|
The Export Credits Guarantee Department should include a commitment to poverty reduction and sustainable development, including respect for the environment and human rights, in its business mandate
| 206."We will now put in place a new code of business principles in relation to ECGD covering developing countries, sustainable development, transparency, human rights, and business integrity."
| This sounds very positive. The new code covers all the areas mentioned in the CAFOD and Christian Aid submission but, as with all codes and statements of principles, much will depend on the zeal with which they are applied or enforced.
|
The World Bank, Regional Development Banks and IMF should ensure that their advice on export promotion and structural adjustment strengthens, rather than undermines, national efforts to achieve the IDTs
| 307."We believe that the principle of a country-led poverty reduction strategy should apply to middle income countries and to other developing country regions too. But we recognise that the approach will need to vary according to national circumstances. What should not vary is a clear focus for the World Bank and IMF on poverty reduction. If achieved this will be a major reform."
309."over-prescriptive aid conditionality has a poor track record in persuading governments to reform their policies."
343."more effort is needed [from the IMF] to share analysis and build capacity for dialogue with developing countries."
| Christian Aid and CAFOD welcome this very firm stance in support of making poverty reduction strategies the core of development thinking in both low and middle income countries, and the clear statement in favour of a change in thinking and practice at the Bretton Woods institutions
|
Information, Communication and Knowledge
The TRIPs agreement should be redrafted so that its overarching aim is to contribute to achieving the IDTs.
| 145."we support extending deadlines in cases where countries are committed to implementing the agreement but have genuine difficulties in doing so within current deadlines. We are ready to help countries to develop and implement IPR regimes suited to their national circumstances. We are committed to monitoring the impact of TRIPs, including on poor people's access to vital drugs. And we are open to constructive suggestions on how to improve the agreement in TRIPs reviews and to more substantive negotiations in the context of a new Trade Round."
| The Government's open mind on TRIPs (illustrated by its proposal for a Commission on the issue) is welcome. However, CAFOD and Christian Aid see no moral or development case for making changes to the TRIPs agreement contingent on acceptance of a new Trade Round
|
The principles of special and differential treatment of unequal parties contained in the WTO articles should be introduced into the TRIPs agreement.
| 143."The UK Government believes that the agreement allows WTO members sufficient flexibility to implement domestic IPR regimes which take adequate account of their national circumstances."
| This is an indication that on TRIPs, the Government's mind may not be as open as paragraph 145 suggests. There is no discussion of the actual cases where governments have already come under pressure not to use special measures allowed under TRIPS.
|
The period of patent protection, now set at a uniform 20 years, should be made more flexible according to the technologies involved.
| 140.To improve incentives for private investment in developing countries, options include "extending the period of intellectual property protection"
| This is regrettable. The last thing developing countries need is even more intellectual protectionism on the part of northern companies.
|
Article 27.3(b) of TRIPs should exclude all life forms from patenting and remove the requirement for plant variety protection, with a moratorium on implementation in the interim
| 148.We are committed to working for international agreement on the need to release fundamental information on the human genome and the DNA sequences of the world's major naturally occurring food crop and livestock species into the public domain."
| This is a positive step. It does not appear, however, that this commitment will prevent seed and life-science companies from patenting modified varieties of crops and possibly appropriating traditional knowledge incorporated in specific plant varieties which has been freely exchanged between small farmers and/or indigenous peoples. CAFOD and Christian Aid continue to argue for sui generis systems of plant protection which provide greater freedom than the TRIPs agreement or UPOV (International Union for the Protection of New Varieties of Plants).
|
Consideration should be given to removing IPRs from the WTO.
| No commitment
| This option appears to be ruled out of the proposed TRIPs commission's terms of reference which state that. "The Commission will consider how national IPR regimes should best be designed to benefit developing countries within the context of international agreements, including TRIPs".
|
International Institutions
All international agreements should be judged against their contribution to poverty reduction.
| 4."the International Development Targets . . . remain absolutely central to our development strategy, including the policies we pursue through multilateral institutions."
| Christian Aid and CAFOD pay tribute to the Government's energetic international promotion of the IDTs
|
The WTO should state publicly that the achievement of the international development target of halving world poverty by 2015 is an explicit objective of its work.
| 229.We will also urge the WTO to commit itself, with the rest of the international community, to achieving the International Development Targets.
| A welcome step. The next stage, not addressed in the White Paper, is how to operationalise this commitment as part of the core business of the WTO, to avoid the accusation that it is no more than lip service.
|
All WTO members should make binding commitments to contribute to a common fund to support the representation of developing countries in Geneva. In addition, developing countries' obligation to implement agreements should be made conditional on their receiving adequate prior technical assistance.
| No commitment
| Discussion of WTO institutional reform is disappointingly limited and vague, eg para 239: "an urgent priority must be to strengthen the capacity of developing countries to participate effectively in the WTO and the international trading system."
|
At the national and EU level, parliamentary oversight of the WTO should be stepped up. An annual reporting procedure to both European and British Parliaments on the WTO would contribute towards this aim.
| No commitment
|
|
Governments should disclose all written advice they have received relating to trade negotiations.
| No commitment
|
|
The Government should explore which recommendations of the Nolan Committee on Standards in Public Life could usefully be introduced at the WTO.
| No commitment
|
|
Measuring Progress
DFID should implement and maintain systematic monitoring of the impact of trade liberalisation in a representative group of developing and least developed countries.
| 256."We support the undertaking of sustainability impact assessments of trade policy changes."
145."We are committed to monitoring the impact of TRIPs, including on poor people's access to vital drugs."
| This represents a very partial shift to a greater reliance in policy design on evidence over theory and/or modelling.
|
The UK Government should clearly state the empirical basis for its policy proposals on bilateral and multilateral trade and investment arrangements.
| No commitment
| Some empirical work was commissioned as part of the White Paper research effort, but CAFOD and Christian Aid would like to see much greater reliance on case studies and country-specific analyses.
|
The Government should continue to press for the introduction of an international code on social data collection and dissemination.
| No commitment
| Disappointing, given the Government's previous support for the idea in the Chancellor's speech at the IMF Annual meeting in 1999.
|
3. Some key underlying issues
The importance of economic liberalisation
Though more nuanced than previous DFID publications, the
White Paper contains throughout a strong bias toward liberalisation
as the appropriate policy response to globalisation. Though the
evidence offered for this presumption is sometimes patchy, the
argument rests on two foundations - a particular reading of the
recent experience of newly industrialising countries in East Asia,
and the use of a small number of recent academic studies. In the
view of Christian Aid and CAFOD, neither provide an adequate empirical
basis for the assumptions about liberalisation that appear throughout
the paper.
The analysis of the East Asian experience is summed up in
paragraph 31:
The initially poor countries that have been most successful
in catching up in recent decades—the newly industrialising
East Asian countries and China—seized the opportunity offered
by more open world markets to build strong export sectors and
to attract inward investment. This contributed, along with massive
investment in education, to the largest reduction in abject poverty
that the world has ever seen.
Christian Aid and CAFOD see this as at best a partial and
imperfect analysis of the reasons behind East Asia's successful
record in achieving growth with equity. In particular, it ignores
the key role played by industrial policy in countries such as
South Korea and Taiwan, and the widespread use of protection and
other measures which "discriminated" on the basis of
nationality in areas such as finance, direct investment and trade.
The White Paper opposes such forms of discrimination (see para
186), despite their central role in just about every previous
successful long-term development strategy. CAFOD and Christian
Aid's arguments on this point are laid out on pages 35-38 of our
submission.
Though the White Paper uses the example of East Asia to argue
the case for particular policies, in cases where those policies
do not appear to work it is the external environment rather than
the policies themselves which are blamed. Liberalisation, it seems,
always has an alibi when things go wrong. There is no discussion
of the more negative experiences of liberalisation in Latin America
and Africa, and where problems are acknowledged—as in Eastern
Europe—it is asserted that this reflects a problem with
political institutions rather than with the policies themselves
(see White Paper Box 2, p.24). This apparently selective reading
of the evidence is regrettable.
Approaches to other evidence on liberalisation are also marked
by this selective approach. This problem is compounded by the
White Paper's excessive reliance (e.g. Box, page 66) on a heavily
disputed World Bank Paper by Dollar and Kraay.[21]
A response to that paper by Dani Rodrik of Harvard University
is attached (Not printed).[22]
As well as criticisms of the selection of countries and conclusions
drawn from them in the paper by Dollar and Kraay, Rodrik also
points to a confusion over how liberalisation is measured, which
is repeated in the White Paper. There (Box, page 66) the ratio
of trade to GDP is used as a proxy for trade openness. Though
the amount of trade relative to total economic activity is a rough
guide to the importance of trade to an economy, it says nothing
about the trade policy regime. For example South Korea, which
has had anything but a liberal trade and investment policy regime
during decades of fast growth, would be held up as a model of
`openness' on the basis of its trade/GDP ratio. This confusion
between the total amount of trade and the trade policy regime
means that the finding that the amount of trade relative to GDP
is correlated to growth is then used to make the case for trade
liberalisation. This is a conclusion which is not justified by
the evidence presented in the White Paper.
The approach to liberalisation informs the treatment of national
difference in the White Paper. One of the key points of Christian
Aid/CAFOD's submission was that countries need to be treated differently,
according to their social, economic and political circumstances.
The White Paper makes reference at various points to the importance
of national specificity, for example paragraph 37:
That is why it is so important to design economic strategies
that recognise and respect countries' specific needs and circumstances
CAFOD/Christian Aid welcome this recognition, but have indicated
at various points in section 2 that the presumption that liberalisation
is always the best policy option weakens the commitment to taking
national differences seriously. If national differences are only
to be considered in relation to the speed and sequencing of liberalisation,
this does not go far enough to addressing Christian Aid/CAFOD's
concerns about national difference, which were at the core of
the critique of liberalisation contained in our submission.
Inequality
Before the White Paper was published, much attention was
given to the importance of equity issues in the management of
globalisation. Given this, it is surprising that the WP is at
best ambivalent and at worst evasive on inequality and redistribution.
At both a global and a national level, the Paper asserts
at various points that there is no systematic relationship between
growth or openness and inequality:
27. "The best evidence to date suggests that there
is no systematic relationship between openness and inequality,
or between growth and inequality."
30. "Similarly within countries, the evidence indicates
that there is no systematic relationship between increased openness
and changes in inequality."
32. "There is no systematic relationship between
economic growth and inequality."
At a global level, despite increasing evidence that the IDTs
will not be achieved unless equality issues are addressed, the
White Paper defines the problem of inequality away with its assertion
that, according to new figures from DFID, global inequality is
falling anyway. A new form of calculation carried out by DFID
in the White Paper, contradicts the much-quoted UNDP figures on
rising global inequality. The calculation uses Purchasing Power
Parity (PPP figures) for average GDP per capita, and finds global
inequality falling in the 1990s, due to fast GDP growth in China
and India. Using PPP appears a sensible step, but is not the whole
story-by comparing national averages, the calculation omits rising
inequality within countries such as China and India. The
World Bank's most recent discussion on this issue concluded that
"overall more people have been affected by increases of inequality
than by decreases."[23]
However, though the White Paper absolves globalisation, growth
or liberalisation of direct blame for the problem of inequality
at the international level, and therefore does not have much to
say on this subject, at a national level the White Paper argues
that equity should be part of the solution:
33. "Economic growth is an indispensable requirement
for poverty reduction."
34. "But by itself it is not enough. Pro-poor development
requires growth and equity. Poverty reduction is faster
where growth is combined with declining inequality. And poverty
reduction is also more easily achieved in less unequal countries
- the lower the level of inequality, the larger the share of the
benefits of growth that accrue to the poor."
The White Paper goes on to suggest some ways that growth
can be combined with greater equity, through attentions to land
reform [92], rural roads [93] and improved access to credit, especially
for women [94]. Beyond this, there is little in the way of concrete
policy initiatives to address the problem of inequality at any
level. In particular, and in sharp contrast to the redistributive
policies implemented by this government in the UK, there is certainly
no suggestion of any national or global redistributive mechanisms
to reduce inequality of incomes or assets. The emphasis is firmly
on improving equality of opportunity rather than equality of assets
or outcomes.
CAFOD and Christian Aid's view is that the Paper's flawed
absolution of globalisation as part of the problem of inequality
undermines its ability to put forward solutions. Redistribution
is the key challenge in achieving the IDTs and should have played
a much more central role in the Paper.
Debt
The White Paper expresses satisfaction with the HIPC initiative
as it now stands and does not argue for extension or deepening
of debt relief. While the Paper's section on debt points out that
"servicing debt reduces the resources available for tackling
poverty' [295], it makes no comment on whether the current mechanism,
the so-called "enhanced HIPC initiative", is providing
sufficient levels of debt relief.
The White Paper does say that the HIPC initiative is designed
to ensure the proceeds reach the poor, but it does not say whether
available levels of debt relief are consistent with the 2015 targets
to halve global poverty. It would appear, however, that the Government's
position is that the current HIPC 2 levels of debt cancellation
are sustainable. Both Christian Aid and CAFOD believe that, with
static or declining levels of development assistance, HIPC 2 will
not deliver enough debt cancellation and, in a number of countries,
this shortfall will materially affect the achievement of the international
development targets.
For the development agencies that co-founded the Jubilee
2000 coalition, debt sustainability should be judgedon whether
debtor governments are left with sufficient funds to finance basic
human needs (including those outlined by the 2015 IDTs). Under
this criterion, some of those countries will require a 100 per
cent cancellation of multilateral and bilateral debts. Such a
human development approach is not available under current mechanisms
and the White Paper does not offer any additional debt cancellation
measures to address this deficit.
4. Conclusion
Staff at Christian Aid and CAFOD were intensively engaged
in the White Paper process for much of 2000. On balance, our conclusion
is that this engagement with both civil servants and ministers
has been positive, both in terms of the eventual content of the
White Paper and in terms of what we have learned as institutions
about the issues contained in the Paper, and the process of engaging
with government.
There are clearly many areas of the development debate where
we and the government share common ground. On a rough, and highly
unscientific, count the table in Section 2 suggests that of 33
key recommendations contained in the CAFOD and Christian Aid submission,
we were pleased with the White Paper's response on 7, disappointed
on 13, and our cup was half full (or half empty) on a further
13. We are fairly convinced that the count would have been considerably
more negative if the government had not consulted with the NGOs,
or if we had not engaged.
In the coming years, we will be working with government to
ensure the implementation of policy in some areas, and continuing
our discussions over issues on which we have yet to agree. But
overall, CAFOD and Christian Aid's conclusion is that the White
Paper represents an important and significant step forward on
the path to achieving the International Development Targets.
Christian Aid and the Catholic Agency for Overseas Development
(CAFOD)
January 2001
20
Numbering refers to paragraphs in the White Paper. Back
21
David Dollar and Aart Kraay, Trade, Growth and Poverty, World
Bank, October 2000. Back
22
Comments on "Trade, Growth, and Poverty," Dani Rodrik,
Harvard University, October 2000. Back
23
Global Economic Prospects 2001, World Bank, 5 December 2000, p38. Back
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