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Commissioner Nielson's speech on global sustainability

Ladies and gentlemen,

Just a few months back it would not have been obvious for a Development Commissioner to talk to this audience of peace and security experts. We have recently seen development issues moving quickly to the center of international relations. Although despicable ideological extremism - not poverty - was the direct cause of the September 11 attacks, there is now a wide recognition that nobody can feel safe in a world where perverse inequalities prevail. Peace and security are public goods, of a global character. And international cooperation - including development cooperation - is going to be key in helping to supply them.

The challenge is massive. We need a fundamental change in the way we think and work. The development model championed by the rich is economically and socially unsustainable. It simply leaves too many people out. We need to work towards global development that is both sustainable and inclusive.

Let me start by mentioning the main aspects of the sustainability crisis that we are jointly facing:

• First, there is deep and widespread poverty. The figures are well known, but still shocking. 800 million people suffer from hunger and are undernourished. Half of the world's population live on less than € 2 per day. The gap between rich and poor is still growing. Today, 10% of the world's population receives 70% of its income, and the richest three men on earth have assets equal to the annual output of the 48 poorest nations. Since 1960 the polarization of income between the richest and poorest 20% has tripled, to 90 to 1.
  
  
• Secondly, during the last decade, rather than reversing unsustainable trends, pressure on the environment and on natural resources have increased. Many natural resources, such as water, land and soil, biodiversity, forests and fish stocks are already being exploited at or beyond their limits, exceeding the carrying capacity of the Earth. 1,2 billion people lack safe drinking water.
  
  
• Thirdly, non-inclusive globalization has created or deepened economic, financial and political instability in many countries and in the world as a whole. Amongst several other negative implications, this provided a breeding ground for cronyism and corruption, armed conflict and (international) terrorism in many places around the world.

Up to now, the political response to the global sustainability crisis has proved insufficient on any level - national, regional and international. There is a deep 'global governance gap'. In order to make globalization sustainable, we need a much better balance between the global market forces on the one hand, and global governance and political institutions on the other.

The road ahead

Ladies and gentlemen, I will now try to give my presentation a positive twist and look at the way ahead. How are we going to solve these problems?

During the coming year the EU and other countries will try to make progress at three major fora. Firstly, the Doha Development Agenda (launched in November 2001, with negotiations scheduled to conclude after a three-year cycle). Secondly, the UN Conference on Financing for Development in Monterrey (March 2002). And thirdly, the UN World Summit on Sustainable Development (Johannesburg 2002).

Before turning to these three milestones, I want to emphasize - in all modesty - that the EU is well placed to assume a leading role in the pursuit of global sustainable development. Europe is the world's largest donor of development assistance, the world's biggest trading partner, and a major source of direct private investments. Throughout its own evolution, the EU has recognized that lasting prosperity depends on pursuing mutually reinforcing strategies for stable economic growth, social development and environmental protection. In addressing the same challenges at the global level, the EU must share the experience and know-how gained from its own experience of integration.

But assuming a leading role should not mean doing everything alone. Tackling global problems needs simultaneous action from all nations, and will only succeed if all - including the USA - commit themselves to politically challenging choices. This global partnership, or - even clearer - global deal needs to embrace all stakeholders.

The industrialized countries have an important responsibility to bring their own house in order, by supporting a move to sustainable production and consumption patterns. Major consumer societies by definition offer the greatest scope for action to relieve pressures on the world's natural resource base. And rich nations still have to work harder to promote social cohesion, high levels of education and public health at home.

Internal policies of developing countries are of course also vital. These include policies related to integration with the global economy - macro-economic stability, trade openings, a favorable investment climate and institutional and legal reform. But other domestic policies, in the areas of taxation, income redistribution, decent work rights and the fight against corruption are equally fundamental. For solidarity to be universal, it also has to be local.

Last week, I visited Gujarat, the area in India where Ghandi, as part of the struggle for independence, challenged the UK prohibition against producing salt. Today, Indian salt workers are working in extremely harsh and unhealthy conditions under private licenses on government-owned lands. Earning 40 cents pr tonnes, these people live in slavery-like conditions next to a well-off local elite.

This is wrong. Even in very poor societies, some re-distribution and solidarity must be expected. A key criterion is the ability of developing countries to ensure a minimum level of decency in equity through adequate taxation. Clearly, the domestic politics in developing countries matter.

Doha

Ladies and gentlemen,

In Doha, multilateral diplomacy recovered from the failure in Seattle and the Kyoto impasse. Like others, I am satisfied about the successful launch of the new WTO round. In my view the Doha Development Agenda represents a fundamentally different approach to trade policy, launching broad negotiations under an overarching sustainable development objective, supported by trade-related capacity building to help countries participate effectively. The inclusion of environment on the international trade agenda is groundbreaking; it should provide an instrument for improved global governance in this crucial area.

The agreement reached in Doha is a clear example of the integrated approach to harnessing globalization promoted by the EU, and creates the basis for further changes in the global system. The inclusion of talks on a range of trade-related issues such as competition, investment, trade facilitation and government procurement after the next WTO ministerial conference in 2003 should ensure that market liberalization takes place in a broader regulatory framework, helping countries manage and maximize the benefits of reforms.

The agreement reached in Doha to negotiate a multilateral framework for transparent, stable and predictable conditions for investment, is an important factor in this context. Participation to such a framework agreement is expected to provide greater certainty and to reduce the perceived risk for potential investors. This will help to increase the inflow of foreign direct investment, which is an increasingly important source of development financing. It will help to promote a healthy balance of trade. And it will also encourage efficient production and stimulate technology transfer.

The EU is committed to support developing countries in obtaining a larger share in world trade. This requires a strengthening of the supply-side structure of developing economies, a further opening of industrialized countries' markets for products from the South, and a further reduction of world price-depressing agricultural subsidies.

We will also use our development instruments to facilitate developing countries' participation in trade negotiation processes, as well as developing countries' efforts to produce for and export to third countries, including the EU.

Monterrey

Doha has set an agenda for a version of globalization that will also benefit the poor. But the EU clearly recognizes that a free world market alone would not lead to equitable and sustainable development. Official Development Assistance (ODA) remains critical to support the autonomous efforts of developing countries, notably the poorest ones.

ODA should not be seen as a temporary fix. Rather, it must remain a permanent feature of a minimally decent international society. The International Conference on Financing for Development in Monterrey in March 2002 must show that the international community is ready to take concrete steps in fulfilling its longstanding financial promises.

Up to now, only 5 OECD-members have reached the promised level of 0,7% GDP to be spent on Official Development Assistance (4 out of those 5 are EU-member states). The overall OECD average is now 0,23%. The USA stands at 0,1%. It goes without saying that this persistent gap between policy statements and practice does not add to the credibility and trustworthiness of rich countries.

The World Bank and IMF calculations show that the realization of the development targets that were defined and unanimously endorsed by Heads of States at the Millennium Summit in 2000 - halving world poverty by 2015 - will require a doubling of existing aid. This would still only bring the total ODA to 0.48% GNP. The eradication of poverty will demand a much more ambitious effort.

Surely, the rich world is capable of mobilizing the funds. According to some calculations, a 15% decrease in the worldwide agricultural subsidies would suffice to achieve more than a doubling of the present total amount of development aid. In Europe alone, the Common Agricultural Policy absorbs around 0.6% of the Community's GDP whereas development aid in the EU averaged 0.33% in 2000. In other words, through the Community budget alone we give almost twice as much support for domestic agriculture in the 15 EU Member States (employing less than 7 million farmers and fishermen) as we give for development in developing countries, home to some 3 billion people living on less than $2 a day.

Ladies and Gentlemen,

Let me return to the Monterrey process. During my already rather mature career I have attended many international conferences. I cannot remember any occasion where the conclusions were drafted and fully agreed two months before the conference took place. Yet this is the case in Monterrey. The 'Monterrey Consensus' already exists.

I assume that this, in itself, should give rise to joy and satisfaction. And indeed we have an excellent basis to work on. But for me the real test will be whether Monterrey will generate more cash for development. I am looking for the hard financial commitments. In fact, the European Union has already been working hard to elaborate positive initiatives in view of the Monterrey Conference. This week the Commission is suggesting a number of possible positive initiatives that the European Union and its Member States could adopt. These include a commitment to further increase the volume of ODA; a commitment to increase the quality of ODA, through untying of aid and the harmonization of procurement procedures; and suggestions for further work on Global Public Goods and innovative sources of finance. I hope that EU Member States will take these proposals further.

In this context, it is disappointing to see that Monterrey seems to remain silent on the issue of Global Public Goods. It was and still is my view that we should use the platform of this conference to launch a "Global Public Goods Agenda".

The idea of global public goods is not new in the international cooperation debate, but it has recently found renewed interest.

First of all, we need a sound and practical definition of what global public goods are. The EU has taken inspiration from UN efforts to develop an operational definition of global public goods. I know and appreciate these UN efforts, defining - roughly speaking - a global public good as a public good that extends its benefits beyond one or a group of countries, accrues to several, preferably all, populations groups; and does not discriminate against any population or any set of generations, present or future

Satisfying all the criteria at the same time is a tall order. Pure global public goods are therefore rare. It would be wise to start multilateral discussions on the basis of a short, restrictive list of truly global public goods. The challenge is not to find three hundred examples, but to have discussions launched on three concrete cases.

A number of examples have been discussed, including communicable diseases control through research and vaccines; knowledge; preventing climate change; and stopping the spread of water-borne persistent organic pollutants and heavy metals that concentrate in the food chain. The European Commission will adopt a policy paper next week setting out our analysis on some of these issues.

But where is this intellectual discussion taking us? In the end, whether something is a global public good is not a matter of definition. It's a political choice.

Take peace and security. It is a measure of globalization with a conscience whether we consider peace and security a global public good.

No definition will do the trick if the average citizen in rich countries does not feel concerned about the conflicts in Africa, either because of pure compassion and moral imperatives, or because of the threat of migratory flows and/or terrorism.

So when we are discussion global public goods, we are in reality discussing whether we as a global community take our interdependence seriously. This is the core of the whole discussion. The discussion on global public goods is a useful mental vehicle for - once again - asking the simple question:

"It is decent for us to be so well-off with people suffering at our door-step?" Let me now turn to the question of financing and the innovative sources of funding. During the last few years, a number of interesting ideas for new and additional financing mechanisms have emerged. Proposals include a carbon tax, an aviation fuel tax, a tax on currency transactions and a tax on arms exports. The EU has launched discussions on these proposals. The European Commission will make its recommendations to the European Council next week. In my view, all interesting ideas should be explored.

But every time we hit the wall of political realism and feasibility, we are back to the conclusion that ODA remains the solution. For every case of innovative ideas that has been discussed without a positive conclusion, the basic conclusion is therefore that we have to return to the issue of ODA.

The message of Monterrey therefore has to be: more of the same!

Politicians and their constituencies must remind themselves again and again that ODA should not be seen as a short-term necessity to fix a temporary problem.

ODA is not a way to finance the repair of some historical error or pay for colonial sins. Nor is it legitimate to say: "We have given ODA for 25 years now, and the Africans are still poor. So it doesn't work!"

No, ODA is here to stay. And it should be dramatically increased as global interdependence is deepened. The European experience is telling. As we are about to enlarge the EU from 15 to maybe 25 countries in 2004, large amounts of money and capacity-building will be transferred to the candidate countries in Eastern and Central Europe. The closer we get, the more aid is actually needed.

So an organized global redistribution is a permanent feature of the minimally decent international society we want to build.

This does not mean that development aid should become a sort of global social gap-filling. To maximize the impact, we have to insist that ODA is linked to reforms and change processes that address structural and political inadequacies.

In combating poverty we must insist on focusing on the dynamics of social progress. I repeat: ODA is both a permanent feature and a dynamic agent of social change!

So much about Monterrey.

Johannesburg

From Doha and Monterrey, the multilateral diplomacy moves to Johannesburg in September. At the World Summit on Sustainable Development we will see Heads of States, ministers, delegates and representatives from civil society from around the world discussing the future of our planet. Ten years after Rio, sustainable development is more topical than ever. The Johannesburg summit is an opportunity to reinforce the sense of a global community.

The EU is still in the process of preparing its views and position for this event. Next week the European Commission will discuss and adopt a policy document on the Johannesburg Summit, setting out our objectives and proposed actions in the context of global sustainable development. After that, EU Ministers and Heads of Governments will look into the same issue.

Let me quickly summarize the aspects that I have been putting forward in our debates.

First, ambitions must remain high. The Summit should bring the world nothing less than a 'Global Deal' or a 'New Global Partnership', built on substantial contributions and commitments by all players and stakeholders.

Second, Johannesburg should result in a balanced, coherent and action-oriented agenda, simultaneously addressing the economic, social and environmental problems of this world, and incorporating other relevant processes, including Doha.

Thirdly, the EU must lead by example. As far as I am concerned, the EU sustainable development strategy will contain commitments and proposals in five interrelated areas.

• Strengthening coherence of EU policies. We will strive to assure that all EU policies - including the domestic ones - are conducive to global sustainable development;
  
  
• Making globalization sustainable by assuring that Doha will become a true development round;
  
  
• Fighting poverty by assuring that Monterrey brings meaningful and measurable financial results;
  
  
• Stopping environmental degradation by implementing multilateral environmental agreements, ratifying Kyoto, introducing an aviation tax, intensify the struggle against illegal logging, etc.;
  
  
• Improving global governance by making global governance structures more inclusive, either by setting up an Economic Security Council, or by reforming the G8 into a more representative body. We also need to strengthen governance structures on social and environmental issues (ILO, UNEP). The World Trade Organization is important and successful, but where is the World Environment Organization?

And beyond

It will not surprise you, ladies and gentlemen that I consider development cooperation - in its broadest definition - as the most important contribution rich countries can make to preventing conflicts around the world.

Multilateralism is not about gathering international backing for pre-set national interests. Nor can it be about a few powerful nations trying to work out the parameters of international negotiations between themselves. Concerted efforts will be needed by all parties in order to strengthen the international regulatory framework, involving recognition that aspects of sovereignty as well as resources need to be pooled. The European Union knows better than most that multilateral processes tend to be slow and difficult, and rarely do their results satisfy every participant. But we also know that the only logical response to ever-increasing interdependence lies in ambitious and brave attempts to manage it in a collective and equitable manner.

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• Commissioner Wallström's Speech on results of WSSD (11/9/2002)
• Commissioner Nielson's speech in view of the World Food Summit (16/5/2002)
• Commissioner Nielson's speech on external aspects of sustainable development (16/5/2002)
• Commissioner Wallström's speech on Global Sustainability (26/2/2002)
• EU Presidency Statement - Ambassador Trojan's intervention on the right to development (26/2/2002)
• Sustainable development and a fairer world (13/2/2002)
• Visit of Commissioner Nielson to New York (8/2/2002)
• Commissioner Nielson's speech on FfD at the European Parliament (6/2/2002)
• EU Presidency Statement - UN Summit on sustainable development (29/1/2002)