Aid and cooperation
The only instrument at global level was development aid. Some, like Jan Tinbergen, advocated development assistance as a means to redistribute world income [Tinbergen, 1965, 1990] Others, like Hollis Chenery [Chenery, 1967, 1973] saw aid as a means to stimulate economic growth in developing countries beyond what would be possible through domestic resources only. But, as documented for instance by Goran Ohlin [Ohlin, 1966], there were also political motives. The end of World War II and the winding up of colonisation had ushered in a new era of globalisation. The old powers were willing to use international technical and financial assistance as an instrument to control the new situation. In 1961 the combination of such motives led to the consensus decision in the General Assembly of the United Nations to adopt a Strategy for the First Development Decade, 1961-1970. This Strategy made self-sustaining economic growth (per capita) the overriding objective for the Third World, following the more or less successful outcome of the struggle for liberation and independence after decolonisation. The rationale of the Strategy strongly resembles that of the Millennium Declaration. Listen to the then Secretary-General of the United Nations, U Thant, Kofi Annan’s predecessor: ‘It is an extraordinary fact that at a time when affluence is beginning to be the condition … of whole countries and regions rather than of a few favoured individuals, and when scientific feats are becoming possible which beggar mankind’s wildest dreams of the past, more people are suffering from hunger and want than ever before. Such a situation is intolerable and so contrary to the best interests of all nations that it should arouse determination, on the part of advanced and developing countries alike, to bring it to an end.’ These words could have been written in the year 2000.
The objective of the Strategy was to enable developing countries to achieve an annual growth rate of at least 5%.by 1970 and to sustain it thereafter. It was thought that, if the population of the developing countries continued to rise at a rate of 2.5 %, this could result in a doubling of personal living standards within twenty-five to thirty years. To this end the richer countries would make available 1% of their national income in the form of development assistance. [United Nations, 1962]13 These objectives were the first predecessors of the Millennium Development Goals.
Others would follow. The aid targets were not met and no international agreement could be reached on a more ambitious growth target and more intensive cooperation in the Second Development Decade.14 Political interest shifted towards direct rather than indirect ways to combat poverty and to sectoral rather than global approaches and targets. Many of these targets had the end of the millennium as the deadline: the removal of hunger and malnutrition (Rome, 1974), ‘Health-for-All’ (Alma Ata, 1976), safe drinking water for all people (Mar del Plata, 1977), increasing the share of developing countries in global industry to 25% (Lima, 1975), universal access to basic education (Jomtien, 1990). All these targets were set at high political level. Nearly all are based on rights laid down in the International Covenant on Economic, Social and Cultural Rights, which entered into force in 1976. [United Nations, 1966] None have been accomplished. 15
All the targets were directly related to poverty. This also applied to the target concerning manufacturing, given the importance of manufacturing for employment. Creating employment was seen as a direct and effective road towards poverty eradication. A World Employment Programme was designed, under the leadership of Louis Emmerij. It was a new and unique approach to combat poverty, not through high economic growth, but aiming directly at the fulfilment of basic human needs.
What followed is well known. Both new approaches – basic human needs and the sectoral world programmes – received a severe blow in the eighties due to the world recession. Developing countries were affected by a decline in world trade and by mounting debts. But they received an even stronger blow as a result of adjustment policies imposed upon them and a refusal by Northern countries to lift trade restrictions, relieve debts and stabilise commodity prices. The overall global approach to development and poverty reduction that had started with the First Development Decade had died out. International measures to sustain development were made conditional on developing countries accepting adjustment programmes, opening their markets, liberalising their economies and reducing budgetary deficits and government expenditure. Far from being a Third Development Decade, the eighties had become a decade of adjustment to new realities set by the North, or, in the words of Gamani Corea, a ‘lost decade’ for development. Many concluded that it was a lost decade for poverty reduction too. Adjustment policies often implied more unemployment and disinvestments in education, health and other social sectors, which were increasingly left to the market.
Then the world entered a new phase in the post-1945 globalisation process. The first had started with the end of the World Wars and the end of colonisation. The second started with the end of the Cold War. Global political relations drastically changed with the end of the Cold War in 1989. A new élan emerged for global cooperation and new paradigms became prominent: ‘a new world order’ (Bush), ‘sustainable development (Rio), ‘peace and development’ (Boutros Ghali). Wild-west adjustment was replaced by less harsh programmes. Together this created room for the implementation of a World Agenda 21 for sustainable development, poverty eradication and environmental protection.
However, the new optimism soon faded away. In two public addresses to this Institute, in 1992 and 1997, I tried to explain why the 1990s would not herald the beginning of an era with a new perspective for people in developing countries, as originally had been expected. [Pronk, 1997, 2000] In my view the main reason was that the capacity of the international community to implement a new political agenda would be eroded by that same agenda. The nineties would see more and more conflicts within countries, due to economic inequalities and cultural differences between religious, ethnic and other identity groupings. In the nineties, transnational forces would also threaten the economic, social and environmental sustainability of national societies. These forces and domestic conflicts would undermine democratic public authority, within nation-states as well as globally. I foresaw that at best the nineties would be a decade of transition. Whether this would be a transition towards sustainable development in all respects would depend on whether it would be possible to design and implement an alternative to a lop-sided globalisation process, mainly of an economic character, carried by market considerations only. In these addresses, I sketched the elements of such an alternative, a developmental approach to globalisation. It would be up to democratic public forces to embark on such a course, but it would be a hell of a job, because it was exactly these public democratic forces that would be compromised by globalisation.
In Rio itself it had already become clear how ill-prepared public authorities were for such a task. It was not possible to reach a meaningful consensus on finance for sustainable development. I am certain that the negotiators already knew for certain in 1972 that, with or without the USA, the 0.7% aid target would never be met. Some individual countries would be able to make achieving and keeping the ODA target a political issue, but there were no political indications whatsoever that the others would even come close. From 1972 to 1992 all negotiations on commitments had been only for show. Did that change in Rio? Far from it. For weeks, discussions on finance were an exercise in futility. Should countries which had not yet achieved the target agree ‘to continue their efforts to achieve this level as soon as possible’? Or ‘by the year 2000’? Or ‘by the year 2000 or as soon as possible thereafter’? Or ‘by the year 2000 or as soon as possible thereafter, taking into account the position of individual countries, while maintaining their commitment to Agenda 21’, whatever that might be? It was not possible to reach agreement on any of these options. So, it was finally decided that each individual country would be free to choose from this menu, whereby one even weaker option was added: some countries would only ‘make their best efforts to increase their development assistance’.
In 1992 the 0.7 % target was carted off and buried. After that, aid performance actually declined, despite the common observation made in Rio that sustainable development and poverty reduction would require a substantial increase in resources. These were not made available, or only on the condition that developing countries themselves would change their governance regime as prescribed by the international institutions. Especially for the poorest countries, for countries most in debt, countries without adequate access to commercial lending or to foreign trade, countries suffering from violent internal conflict and countries trying to rebuild their society after dictatorship or war, this meant that they were led into a blind alley. Together these five categories of countries were not an exception, but a development rule.
After Rio, aid flows stagnated. Throughout the decade, failure to raise funds paralysed many international talks on global problems, from debt relief to climate change, biodiversity protection, land degradation, peacekeeping, refugee assistance and the fight against AIDS. A promise ‘to reverse the trend’, made during the ‘UNCED plus five’ review in 1997 met with great suspicion and could not save negotiations on how the implement the global sustainable development agenda agreed in Rio. Moreover, in the nineties, international talks on trade, capital movements or knowledge-sharing mainly benefited the interests of the North. There were no steps forward whatsoever to enlarge the capacity of developing countries to combat poverty with domestic means. Their utilisation was often curtailed by the demands set by an open economy, the liberalisation of markets and the privatisation of potentially public mandates.
In the meantime two efforts were made to rectify this. Both aimed not so much at an increase in resources as at reallocation and at coherence with social and economic policies in general. In 1995 poverty was put on the agenda of the Social Summit in Copenhagen. It resulted, among other things, in the 20/20 initiative. This called for developing countries to increase expenditure on basic social services from the then current average of about 13% of their national budgets to 20%. In return, donor countries would increase their aid allocations to basic social services to 20% of their total aid budget. The initiative implied that any developing country reaching this target would have its expenditure matched by aid from the donor countries.
The second initiative was a statement by development ministers in the framework of the OECD Development Assistance Committee proposing ‘a global development partnership through which we can achieve together the following ambitious but realisable goal: …. A reduction by one half in the proportion of people living in extreme poverty by 2015 ….’ [OECD, 1996, 2] It was the first time that this goal, together with a number of sub-targets, had been mentioned. The background of the proposal was the explicit recognition by the ministers, during the negotiations on the text, that the 0.7% target no longer had a political future. The United States would never agree to such a target, while several other countries would never achieve it. They realised that ongoing pressure on the US to change its stance would be fruitless, but they did not want to let them off the hook. Rather than make developing countries believe or hope that this situation would ever be different, an alternative was chosen: an output target – poverty reduction – instead of an input target – aid volume – together with a firm commitment to get the job done. It was not meant to be a way out, but a new path, directly leading towards the realisation of an appealing objective. The new poverty reduction target was also meant to be acceptable to the US, which could help to achieve it with other means than just aid, in particular employment-creating trade measures. The message to the developing countries was: there is money for good programmes to combat poverty. Good programmes will be supported with resources and with coherent international economic policies. That was not an expectation, not an expression of belief in the workings of financial systems, but a political commitment.
By unilaterally changing the nature of their commitments to the South, on their own initiative, after forty years of multilateral talks on the 0.7%, politicians representing the North made themselves more responsible. Without a serious effort to meet the new objective, the initiative would soon be branded as hypocrisy. By agreeing that this originally unilateral initiative should become part of the multilateral Millennium Declaration, the leaders of developing countries declared their commitment to poverty reduction and demonstrated their trust in the commitment from their partners in the North. This once more implied that, politically, there was no way back.
The objective of the Strategy was to enable developing countries to achieve an annual growth rate of at least 5%.by 1970 and to sustain it thereafter. It was thought that, if the population of the developing countries continued to rise at a rate of 2.5 %, this could result in a doubling of personal living standards within twenty-five to thirty years. To this end the richer countries would make available 1% of their national income in the form of development assistance. [United Nations, 1962]13 These objectives were the first predecessors of the Millennium Development Goals.
Others would follow. The aid targets were not met and no international agreement could be reached on a more ambitious growth target and more intensive cooperation in the Second Development Decade.14 Political interest shifted towards direct rather than indirect ways to combat poverty and to sectoral rather than global approaches and targets. Many of these targets had the end of the millennium as the deadline: the removal of hunger and malnutrition (Rome, 1974), ‘Health-for-All’ (Alma Ata, 1976), safe drinking water for all people (Mar del Plata, 1977), increasing the share of developing countries in global industry to 25% (Lima, 1975), universal access to basic education (Jomtien, 1990). All these targets were set at high political level. Nearly all are based on rights laid down in the International Covenant on Economic, Social and Cultural Rights, which entered into force in 1976. [United Nations, 1966] None have been accomplished. 15
All the targets were directly related to poverty. This also applied to the target concerning manufacturing, given the importance of manufacturing for employment. Creating employment was seen as a direct and effective road towards poverty eradication. A World Employment Programme was designed, under the leadership of Louis Emmerij. It was a new and unique approach to combat poverty, not through high economic growth, but aiming directly at the fulfilment of basic human needs.
What followed is well known. Both new approaches – basic human needs and the sectoral world programmes – received a severe blow in the eighties due to the world recession. Developing countries were affected by a decline in world trade and by mounting debts. But they received an even stronger blow as a result of adjustment policies imposed upon them and a refusal by Northern countries to lift trade restrictions, relieve debts and stabilise commodity prices. The overall global approach to development and poverty reduction that had started with the First Development Decade had died out. International measures to sustain development were made conditional on developing countries accepting adjustment programmes, opening their markets, liberalising their economies and reducing budgetary deficits and government expenditure. Far from being a Third Development Decade, the eighties had become a decade of adjustment to new realities set by the North, or, in the words of Gamani Corea, a ‘lost decade’ for development. Many concluded that it was a lost decade for poverty reduction too. Adjustment policies often implied more unemployment and disinvestments in education, health and other social sectors, which were increasingly left to the market.
Then the world entered a new phase in the post-1945 globalisation process. The first had started with the end of the World Wars and the end of colonisation. The second started with the end of the Cold War. Global political relations drastically changed with the end of the Cold War in 1989. A new élan emerged for global cooperation and new paradigms became prominent: ‘a new world order’ (Bush), ‘sustainable development (Rio), ‘peace and development’ (Boutros Ghali). Wild-west adjustment was replaced by less harsh programmes. Together this created room for the implementation of a World Agenda 21 for sustainable development, poverty eradication and environmental protection.
However, the new optimism soon faded away. In two public addresses to this Institute, in 1992 and 1997, I tried to explain why the 1990s would not herald the beginning of an era with a new perspective for people in developing countries, as originally had been expected. [Pronk, 1997, 2000] In my view the main reason was that the capacity of the international community to implement a new political agenda would be eroded by that same agenda. The nineties would see more and more conflicts within countries, due to economic inequalities and cultural differences between religious, ethnic and other identity groupings. In the nineties, transnational forces would also threaten the economic, social and environmental sustainability of national societies. These forces and domestic conflicts would undermine democratic public authority, within nation-states as well as globally. I foresaw that at best the nineties would be a decade of transition. Whether this would be a transition towards sustainable development in all respects would depend on whether it would be possible to design and implement an alternative to a lop-sided globalisation process, mainly of an economic character, carried by market considerations only. In these addresses, I sketched the elements of such an alternative, a developmental approach to globalisation. It would be up to democratic public forces to embark on such a course, but it would be a hell of a job, because it was exactly these public democratic forces that would be compromised by globalisation.
In Rio itself it had already become clear how ill-prepared public authorities were for such a task. It was not possible to reach a meaningful consensus on finance for sustainable development. I am certain that the negotiators already knew for certain in 1972 that, with or without the USA, the 0.7% aid target would never be met. Some individual countries would be able to make achieving and keeping the ODA target a political issue, but there were no political indications whatsoever that the others would even come close. From 1972 to 1992 all negotiations on commitments had been only for show. Did that change in Rio? Far from it. For weeks, discussions on finance were an exercise in futility. Should countries which had not yet achieved the target agree ‘to continue their efforts to achieve this level as soon as possible’? Or ‘by the year 2000’? Or ‘by the year 2000 or as soon as possible thereafter’? Or ‘by the year 2000 or as soon as possible thereafter, taking into account the position of individual countries, while maintaining their commitment to Agenda 21’, whatever that might be? It was not possible to reach agreement on any of these options. So, it was finally decided that each individual country would be free to choose from this menu, whereby one even weaker option was added: some countries would only ‘make their best efforts to increase their development assistance’.
In 1992 the 0.7 % target was carted off and buried. After that, aid performance actually declined, despite the common observation made in Rio that sustainable development and poverty reduction would require a substantial increase in resources. These were not made available, or only on the condition that developing countries themselves would change their governance regime as prescribed by the international institutions. Especially for the poorest countries, for countries most in debt, countries without adequate access to commercial lending or to foreign trade, countries suffering from violent internal conflict and countries trying to rebuild their society after dictatorship or war, this meant that they were led into a blind alley. Together these five categories of countries were not an exception, but a development rule.
After Rio, aid flows stagnated. Throughout the decade, failure to raise funds paralysed many international talks on global problems, from debt relief to climate change, biodiversity protection, land degradation, peacekeeping, refugee assistance and the fight against AIDS. A promise ‘to reverse the trend’, made during the ‘UNCED plus five’ review in 1997 met with great suspicion and could not save negotiations on how the implement the global sustainable development agenda agreed in Rio. Moreover, in the nineties, international talks on trade, capital movements or knowledge-sharing mainly benefited the interests of the North. There were no steps forward whatsoever to enlarge the capacity of developing countries to combat poverty with domestic means. Their utilisation was often curtailed by the demands set by an open economy, the liberalisation of markets and the privatisation of potentially public mandates.
In the meantime two efforts were made to rectify this. Both aimed not so much at an increase in resources as at reallocation and at coherence with social and economic policies in general. In 1995 poverty was put on the agenda of the Social Summit in Copenhagen. It resulted, among other things, in the 20/20 initiative. This called for developing countries to increase expenditure on basic social services from the then current average of about 13% of their national budgets to 20%. In return, donor countries would increase their aid allocations to basic social services to 20% of their total aid budget. The initiative implied that any developing country reaching this target would have its expenditure matched by aid from the donor countries.
The second initiative was a statement by development ministers in the framework of the OECD Development Assistance Committee proposing ‘a global development partnership through which we can achieve together the following ambitious but realisable goal: …. A reduction by one half in the proportion of people living in extreme poverty by 2015 ….’ [OECD, 1996, 2] It was the first time that this goal, together with a number of sub-targets, had been mentioned. The background of the proposal was the explicit recognition by the ministers, during the negotiations on the text, that the 0.7% target no longer had a political future. The United States would never agree to such a target, while several other countries would never achieve it. They realised that ongoing pressure on the US to change its stance would be fruitless, but they did not want to let them off the hook. Rather than make developing countries believe or hope that this situation would ever be different, an alternative was chosen: an output target – poverty reduction – instead of an input target – aid volume – together with a firm commitment to get the job done. It was not meant to be a way out, but a new path, directly leading towards the realisation of an appealing objective. The new poverty reduction target was also meant to be acceptable to the US, which could help to achieve it with other means than just aid, in particular employment-creating trade measures. The message to the developing countries was: there is money for good programmes to combat poverty. Good programmes will be supported with resources and with coherent international economic policies. That was not an expectation, not an expression of belief in the workings of financial systems, but a political commitment.
By unilaterally changing the nature of their commitments to the South, on their own initiative, after forty years of multilateral talks on the 0.7%, politicians representing the North made themselves more responsible. Without a serious effort to meet the new objective, the initiative would soon be branded as hypocrisy. By agreeing that this originally unilateral initiative should become part of the multilateral Millennium Declaration, the leaders of developing countries declared their commitment to poverty reduction and demonstrated their trust in the commitment from their partners in the North. This once more implied that, politically, there was no way back.