The European Union and the Pacific Islands: Recalibrating Post-Lomé Development Strategy and Dialogue. Stephen Wright (Northern Arizona University)

Transcription

1 The European Union and the Pacific Islands: Recalibrating Post-Lomé Development Strategy and Dialogue Stephen Wright (Northern Arizona University) Paper presented at the European Union Studies Association Conference, Los Angeles, April

2 Introduction For several decades, the European Union s (EU) development policy toward the African, Caribbean, and Pacific (ACP) states was closely linked to successive Lomé conventions, and their predecessor Yaoundé Convention. Besides providing privileged access to European markets for the products and produce of these ACP states, Lomé also helped to create a political framework for close relations. During the 1990s, the EU decided not to renew Lomé, and instead decided upon establishing a series of Economic Partnership Agreements (EPAs), which developed out of the framework established by the Cotonou Agreement signed in June For the Pacific Island states, this change of strategy by the EU provided both a challenge and an opportunity: the challenge to take on the leviathan, the EU, in negotiating a new framework for cooperation, and the opportunity to obtain greater awareness of and assistance with the development challenges facing the region. Arguably, in neither aspect did they do too well. This paper sets out to offer an overview of EU Pacific Islands dialogue over the past decade, and particularly the last three years, to assess the evolving nature of these relations. At the heart of the paper are three core questions. First, to what degree has EU policy and attitude toward the Pacific Islands changed under the Cotonou EPA framework? Second, is the traditional goal of resource extraction truly giving way to espoused EU policy goals of sustainability and environmental protection, and to what effect? And third, is the EU maintaining its relevance in the Pacific, or ceding influence to others? In order to help answer these questions, we look at the development performance of the Islands, including their progress toward achieving the Millennium Development Goals (MDGs), as well as the quality and quantity of assistance provided by the EU. The paper addresses the likely future trends in specific aspects of the relationship, and concludes with an assessment that the ability of people of the Pacific Islands to live a better life will be significantly challenged in the near future. EU Development Strategies and the ACP In many ways, the Lomé conventions were a product of the Cold War. Through these preferential trade agreements, the EU was able to maintain linkages to newly independent countries, help find markets for their products inside the EU, and so limit the temptation to venture outside of the western fold. With a similar intent, the EU could afford to overlook the political blemishes of many ACP leaders. At the end of the Cold War, the political imperative for this relationship slipped away, and the EU became far more enamored with political conditionalities for aid to developing countries (Holland, 2002). Despots were no longer quite so welcome in European capitals, and good governance and transparency became cornerstones of EU policy. The newly created World Trade Organization could now afford to look askance at these preferential agreements, arguing they were in breach of free trade principles by discriminating against non-acp members, and calling for their eventual abolition. In response to all these factors, the EU informed the ACP that it would not renew Lomé, and proceeded to 2

3 negotiate rather less benevolent trade arrangements, somewhat euphemistically called partnerships, with these countries. The signing of the agreement in June 2000 in Cotonou, Benin, had an interesting Pacific backdrop, in that this should have been called the Suva Agreement. Plans to host the ceremony in the Fijian capital were aborted following a coup d état, and arrangements hastily made for Cotonou. The Cotonou Agreement was, in essence, only a starting point for negotiations, and an eight-year timetable was laid out for completion of agreements prior to the expiration of the WTO waiver. The ACP opened with a strong stance of collective bargaining, but the EU preferred negotiations with individual states or regions, and pressured the ACP into relative disarray. The Pacific Island states themselves attempted to maintain a common front, but eventually this faded, and two of the region s largest countries, Fiji and Papua New Guinea (PNG), concluded separate EPA deals. For all the fanfare of partnership and cooperation, the EPAs do not bode particularly well for the Pacific Islands. The Pacific Islands It is not an exaggeration to say that the fifteen Pacific Islands in the ACP offer unique challenges in the field of development. The Pacific ACP consists of a Melanesia group of Fiji, Papua New Guinea (PNG), Solomon Islands, Vanuatu, and including Timor-Leste; a Polynesia group of Cook Islands, Niue, Samoa, Tonga, and Tuvalu; and a Micronesia group of Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, and Palau. Collectively, the region has three core development challenges that most agree upon. These are (1) the relative isolation of the countries, (2) the scarce resources that most countries possess, and the narrow base and limited export diversification of their economies, and (3) their proneness to natural disasters. In the 1990s, the Islands had the highest rate of disaster-related mortality, percentage of population affected, and damage cost per capita of any region in the world (European Commission, 2006). As a Pacific Islands delegation to the WTO (2001: 17) concluded, our smallness and isolation do constitute a fundamental development constraint, a kind of comparative disadvantage, which, when added to our exposure to natural disaster and external shocks, can make for a very precarious existence and very vulnerable to globalization. Besides Fiji and PNG, all the countries can be described as micro-island states, having very small landmasses and population. Nauru, for example, has a total land mass of just 21 square kilometers, and a total population of 10,000 (European Commission, 2009b). Twelve of the countries of the region have populations less than half a million the exceptions being PNG, Fiji, and Timor-Leste. Six million people, or two-thirds of the Pacific Islands population, are in the single country of PNG. The total population of the whole region is 9.55 million people, a fraction less than the population of Belgium. Almost half of the population in the two biggest countries, PNG and Timor-Leste, live below the poverty line. These countries are so small that unless care is taken, aid can have a negative impact by distorting growth and destabilizing the economy. For example, in 2004 Solomon Islands received aid worth over 50% of its GDP with 3

4 disastrous effects; similar events occurred in Nauru and Tuvalu, which received aid equivalent to 25% of their GDP. Many countries have numerous islands scattered over huge distances, making development planning and everyday life difficult. The Pacific Islands are plagued by the tyranny of distance. They are minute dots of land in the world s biggest ocean a third of the world s total surface area and equivalent in size to the landmass of the EU, the US, China and Argentina combined with huge distances between the islands and global markets beyond. Given such a situation, there is less of a prospect of vibrant internal regional trade markets, and arguably traditional core economic principles, such as comparative advantage and economies of scale, do not easily apply to these countries. Some argue that the whole tenet of neo-liberalism does not apply either. Average annual GDP growth hovers around 2-3% across the region (though Timor-Leste and PNG are normally higher), below the figures for Sub-Saharan Africa and the Caribbean Islands, and not really sufficient to keep up with the growing population. The impact of the global economic crisis currently is also having a significant impact on those growth targets. Few countries in the region produce goods that the world demands, except perhaps for those involved in timber and mining. Exports of minerals now provide about 46% of the region s earnings, topped by PNG (gold, gas), Nauru (phosphates), and Solomon Islands (copper). Tourism provides opportunities for many countries, though that is a fickle business, and has been hit hard in 2009 by the severe economic downturn globally. As a whole, the region has a very significant dependence upon imported manufactured goods. A major exception here, however, could prove to be in fishing rights (and mineral exploration rights) within their 200-mile Exclusive Economic Zones (EEZs), though this is an industry in which the Pacific region is still struggling to exert control. The total EEZs of the Pacific Islands cover some 20 million square kilometers. Although regional cooperation in its traditional sense is not easily applied to the Pacific Islands, this has not prevented them from establishing various regional groups. Although the Pacific ACP group has formally been involved in negotiations for the EPAs, other regional groups are also heavily involved with, and supported by, the EU. Most notable of these is the Pacific Islands Forum (PIF), which includes the Islands along with Australia and New Zealand, who pay two-thirds of the organization s budget. Other similar agreements with Australia and New Zealand include the South Pacific Regional Trade and Economic Cooperation Arrangement (SPARTECA), and the Pacific Agreement on Closer Economic Relations (PACER). The Secretariat of the PIF provides advice to ACP members, and often consults with the EU on their behalf. Furthermore, the Secretariat also provides support to some ten other intergovernmental regional organizations across the Pacific through the Council of Regional Organizations (CROP). Timor Leste has observer status at PIF, and the French overseas territories of New Caledonia and French Polynesia are associate members. 4

5 Pacific Islands and the Millennium Development Goals A central platform of the development programs in the Pacific Islands and the EU s aid programs in general is the implementation of the Millennium Development Goals (MDGs). Signed at the United Nations in September 2000, the MDGs set out an ambitious agenda of targets for development by the year Mid-term reviews recently undertaken show little prospect of the overall goals being met in the developing world, though in some Pacific Islands there is some sign of progress. For example, the micro-islands of Niue, Palau, and the Cook Islands appear to be on track across all the MDGs. Probably the main country for concern is PNG, which, as the region s largest country, appears to be off track on all the MDGs. Solomon Islands and Timor Leste appear vulnerable in all but two of the MDGs, with Timor Leste having the highest rate of maternal mortality in MDG 5 (660 to 100,000 live births) of the entire region. The two most difficult MDGs to achieve across the region as a whole appear to be MDG 4 reducing child mortality, and MDG 7 providing access to water and sanitation. In both these categories, three-quarters of the countries are off track to meet the 2015 deadline (AusAID, 2008). A core difficulty in meeting the MDGs not only in the Pacific but across the whole developing world is that the actual level of foreign aid is not matching the demand nor the commitments made by donors. Within the EU, aid donor levels in fact declined in 2007, standing at 0.38% of GNI compared with 0.41% a year earlier (European Commission, 2008a). This is far below the promise made by the EU of reaching a target of 0.56%, and a world apart from the UN goal of 0.7%. Aid levels are falling even further behind in 2009 with the global economic recession and the demands for financial assistance from struggling countries within the EU. EU Pacific Island Relations It is not the intention here to exaggerate the importance of the Pacific Islands to the European Union. It is evident that these Islands have relatively low economic or political significance to the EU, and even aid flows are comparatively small as to be expected with countries and populations of such size. Trade between the EU and Pacific Islands is both small and erratic, to use the words of the Commission. According to its viewpoint (2006: 24)), The EC is a relatively small trading partner for the Pacific ACP absorbing around 10% of their exports and providing an estimated 5% of their imports.png and Fiji accounted for a full 90% of the Pacific ACP countries exports to the EU In 2004 Pacific ACP goods exports to the EU amounted to 588 million, while goods imported from the EU amounted to 333 million. Pacific Island trade as a percentage of the EU s total trade is miniscule. Despite this minimal trade presence, there is some genuine concern regarding the impact of global warming upon these Islands, as the potential rise in ocean levels threatens the very existence of some. There is still a residual connection through bonds of colonialism, and for the French this extends to their Pacific Overseas Territories, which are considered part of France and 5

6 do not fall inside the purview of the ACP or this paper. France perceives itself to be a regional power in the Pacific in its own right, and plays a foreign policy role often outside of the purview of the EU. Of interest to France and the wider EU is the fishing potential and relatively untapped mineral exploration possibilities of the region, and the desire of EU countries to maintain some part of that market. EU policy toward the Islands was refocused by the MDGs, the transition from Lomé to the Cotonou EPAs, and the European Consensus on Development (2005) to focus primarily on poverty reduction. Negotiations over the new partnership agreements, however, dragged on without much progress for many years, until the region s largest members, Fiji and PNG, signed just before the 2008 deadline. Some of the smaller countries (Kiribati, Samoa, Solomon Islands, Tuvalu, and Vanuatu) were able to obtain further concessions from the EU, but the EU s espoused intention of bringing the Pacific Islands region together in these negotiations did not materialize. The EU Commission set out an agenda for greater partnership in the Pacific in 2006 through its Pacific Plan, in line with the UN s Mauritius Declaration (2005) providing greater assistance to small island states. This included a much stronger emphasis upon sustainable development and governance. The Pacific Plan (European Commission, 2009b: 10) defined regional cooperation in these terms: (a) setting up dialogues or processes between governments; (b) pooling national services (e.g. customs, health, education, sport, etc) at regional level; and (c) lowering market barriers between countries. It is evident that a micro-state economy has a keen need for sustainability, though this has not really been practiced. Mining for phosphates, or the timber industry, have been carried on with scant regard for their environmental impact, and so this is an important consideration today. As Fischer (2002: 270) aptly concluded, Unhappily, the demands of huge multinational corporations seldom coincide with the national priorities of tiny insular societies. One issue up for debate, however, is what is meant by sustainability within small and fragile states in economic and environmental terms. The Pacific Islands possess one of the lowest levels of pollution in the world, and yet stand to suffer significantly from its results, especially as ocean levels rise. The Declaration (2008) by the Commission and the Islands to tackle climate change lacks conviction, especially as the EU backtracks on its earlier promises to cut emissions as the global economic crisis bites. Equally problematic has been issues of governance. Fiji is perhaps a better known example of political instability and turmoil, with indigenous and Indian populations often pitted against each other, with regular military intrusions. The lack of democracy in Fiji has unbalanced EU relations not only with that country but throughout the region, as Fiji plays a key role in many regional organizations (Singh, 2008). But other islands, such as Solomon Islands, have had bitter internal problems, requiring the outside intervention of Australian or New Zealand peacekeeping forces, a sign of their increasing leverage and willingness to use it across the region 6

7 A Regional Strategy Paper for EU-Pacific Region was published in 2008 covering the plans in place up to This sets out policy around four pillars, notably economic growth, sustainable development, governance, and security. Economic growth sets out to increase trade and development, improve infrastructure, and help stimulate the role of the private sector. Sustainable development includes support for the key elements of the MDGs, notably poverty reduction, health, gender equality, and education. Governance encompasses areas such as transparency and efficiency, and security aims to promote overall political and social stability. Under this Regional Strategy and the 10 th European Development Fund (EDF), the EU has earmarked 95 million in aid for the period , including funds to promote regional economic integration, sustainability and environmental programs, particularly linked to the fishing industry. Pacific Islands EU Relations Although the EU tends to wax lyrically about its commitment to its ACP partners in the Pacific, there is often a less than positive appreciation of the relationship emanating from the region itself. Some of this links to a history of colonization, and an ongoing sense of exploitation. This was arguably behind the development of the concept of the Pacific Way, launched in Fiji in 1970, as an indigenous unifying principle and basis for peaceful exchange between Island states (Lawson, 1996). This appreciation of the need for consensus was couched in opposition to the pattern of European (colonial) relationships, but has not been without difficulties for Islanders themselves as they often struggle to conclude such consensus. Simmering resentment remains at the arrogance and cynicism of France at continuing its nuclear testing program in the region until as late as 1996, when a nuclear free zone was eventually agreed upon. Between 1946 and 1996, there were some 250 peaceful nuclear explosions in the Pacific between France, the UK, and the US, and the atmosphere remains poisoned both in a real sense and in a diplomatic sense as Islanders struggle to press their claims for compensation. Part of this is also a realization that the EU is on the other side of the world, and other more regional partners are beginning to displace them: Australia, China, New Zealand, and the US in the premier league, but with an increasing presence from countries such as Japan, Taiwan, and even India. A common complaint from Pacific Island fora is that their ideas and interests are not particularly respected or listened to by the EU (Pacific Lessons, 2008). As Lister (1999: 150) had remarked earlier, the EU claims it wants a partnership, but often gets annoyed by ACP bargaining and really wants more effusive agreement with its policies. Admittedly, the EU- Pacific Troika established in 2008 pays some lip service to this concept of partnership, but it is evident that in negotiations over the EPAs, the viewpoints of the region were given scant attention. Part of this problem hinges upon the different capacities of the two sides. The Pacific Islands have very few resources, in terms of people and money, to maintain representation in Brussels and to negotiate over periods of months, if not years. They are simply outmuscled 7

8 death by a thousand Eurocrats, as it has been labeled. A similar issue regards the Pacific Islands relations with the WTO, where they are normally disregarded in negotiations, even if they manage to have a delegation present (WTO, 2003). Partly in response to these issues, the ACP Pacific group has opened a small office in Geneva, in an attempt to avoid what they call obligation without representation, but with little firm result to date. Where is the level playing field? The Wider Regional Context If there is some doubt concerning the ongoing level of EU commitment to the region, rhetoric apart, then it is clear that other countries are paying much more serious attention to the region. Probably the most important of these is Australia, for obvious geographical reasons, though we should not forget that Australia also has a colonial record in this region. As the EU is maintaining what we might politely call a modest relationship in the Pacific, Australia is increasing its aid and political leverage. Active in peacekeeping, such as with Regional Assistance Mission to Solomon Islands (RAMSI), and influential in many other aid and trade settings, the EU has chosen to partner rather than compete with Australia in this arena. The US also continues to have economic and strategic interests in the region, partly from its national base in Hawaii, but also through its island possessions, such as Guam. The US is rapidly becoming concerned by China s expansion of interest into the Pacific, and is likely to become even further involved in the Pacific region. Japan s desire to expand its fishing rights shapes the country s desire to follow with keen interest the development of policies over EEZs and a global fishing regime. As we have seen in other parts of the world, notably in Africa, the fasting growing influence in the Pacific is from China, with intense interest in key resources, but also a diplomatic agenda of winning over friends in the diplomat offensive against Taiwan. This is also a strategic endeavor for China, as its growing military forces, particularly its navy, seek to expand their influence in the country s own backyard. China has already concluded defense cooperation agreements with Fiji, PNG and Tonga, and is guaranteed to continue to increase those linkages. As the technology develops to take advantage of mining the ocean bed for minerals (aided by the opening up of the Arctic region due to global warming), it is evident that there will be increasing and potentially hostile competition in this region from a variety of countries. It is unlikely that the Pacific Islands will stand to benefit too much from such rivalry. Conclusion The EU s relationship with the Pacific Islands is entering a new phase with the EPAs and the efforts to promote the Millennium Development Goals, and it is probably accurate to conclude that this relationship appears to have paradoxical tendencies. Although a part of the ACP, the Pacific Islands cannot carry anywhere near the level of interest for the EU as the Sub- Saharan Africa ACP does. Besides the individual interests and attentions of France, few capitals 8

9 of Europe follow the Pacific with intense interest. There is no equivalent of Tony Blair s Commission for Africa in the Pacific; there are no cheerleaders for the Pacific, such as Bono or Sir Bob Geldof. The intensity of the Islands concern for global warming is recognized in Brussels, though their looming fate appears to have little impact upon decision-makers in Europe over immediate action on climate change issues. One of the most important issues for the EU in the region is fishing rights. The Pacific is one of the largest and least tapped fishing zones in the world. Here would be an opportunity to help develop a strong regionally integrated policy on fishing rights. But the EU has not pursued this option, and instead chooses to pursue individually negotiated, national agreements. Likewise, mineral exploration in the region is of almost infinite proportions, but the EU appears reluctant to get heavily involved in this arena, appearing to cede ground to other players. The EU s greatest energies appear to be placed in the short term in promoting governance and sustainability, and in the longer term, greater regional cooperation. These are certainly laudable goals, and we should not deny that there is also significant interest in hoping the Pacific Islands can make some economic gains. However, it seems fair to conclude that the EU has relatively limited aspirations in the Pacific, and seems ready to cede the region to others in terms of doing good, and doing business (though in some respects with the exception of France). The EU pinpointed its own shortcomings in the region in terms of: (1) a limited role played in the Pacific, despite being the second largest donor to the region; (2) a limited visibility, or near invisibility, for the Pacific Islands in the EU; (3) the limited impact of EU-Pacific policy within both the regions; and (4) too little time spent by the EU on Pacific affairs (European Commission, 2006). With these ideas in mind, preliminary conclusions to our core questions would be that the EU relationship with the Pacific Islands is changing post-lomé, and is diminishing in importance. It is difficult to be certain whether this is fully by design, or whether other actors within the region are simply more assertive in their policies probably a combination of the two. It also appears as though the significance of the region in terms of resources and minerals is not sufficient to overcome the relative lack of trade and keep the EU fully engaged, and that emphasis on sustainability and governance has become a default mantra (though with some validity). While there are logical explanations for this strategy by the EU, an case could and perhaps should be made for a more activist, yet benevolent, policy agenda to match the rhetoric from Brussels about the region. Such an increased agenda would arguably help both the EU and the peoples of the Pacific Islands more in the longer term. Bibliography AusAID, Australian Agency for International Development (2008) Pacific Economic Survey 08: Connecting the Region AusAID: Canberra. 9

10 Bourguignon, F. et al (2008) Millennium Development Goals at Midpoint: Where do we stand and where do we need to go? European Report on Development. Cosgrove-Sacks, C. (2001) (Ed.) Europe, Diplomacy and Development: New Issues in EU Relations with Developing Countries Palgrave: Houndmills. Council of the European Union (2008) Inaugural European Union Pacific Islands Forum Ministerial Troika Final Communiqué Brussels, 16 September. Declaration on Climate Change (2008) Declaration by the Pacific Islands Forum States and the European Union on Climate Change. European Commission (2006) EU Relations with the Pacific Islands A Strategy for a Strengthened Partnership Brussels, 29 May. European Commission (2008a) The EU A Global Partner for Development: Speeding to Progress towards the Millennium Development Goals. European Commission (2008b) European Community Pacific Region: Regional Strategy Paper and Regional Indicative Programme Strasbourg, November. European Commission (2009) Millennium Development Goals Impact of the Financial Crisis on Developing Countries Brussels, April. Fischer, S. (2002) A History of the Pacific Islands Palgrave: Houndmills Holland, M. (2002) The European Union and the Third World Palgrave: Houndmills. Knodt, M. and Princen, S. (2003) (Eds.) Understanding the European Union s External Relations Routledge: London. Lawson, S. (1996) Tradition Versus Democracy in the South Pacific Cambridge University Press: Cambridge. Lister, M. (1999) New Perspectives on European Union Development Cooperation Westview Press: Boulder. Mack, A. and Ravenhill, J. (1995) Pacific Cooperation: Building Economic and Security Regimes in the Asia-Pacific Region Westview Press: Boulder. Nathan Associates (2007) Pacific Regional Trade and Economic Cooperation: Joint Baseline and Gap Analysis Report to the Pacific Islands Forum Secretariat, December. Pacific Lessons from the Economic Partnership Agreement (2008) Pacific Institute of Public Policy, Briefing Paper 01, June. 10

11 Singh, D. (2008) When is the Pacific UN-Pacific (2008), The Courier, June-July, 24. Small can be beautiful: The Particular needs of micro states in trade policy (2008) Pacific Institute of Public Policy, Briefing Paper 04, August. Tsunami and the Solomon Islands (2008) The Courier, January-February, UNESCAP (2007) The Millennium Development Goals: Progress in Asia and the Pacific 2007 The United Nations Economic and Social Commission for Asia and the Pacific: Bangkok World Bank (2008) Global Monitoring Report World Bank: Washington DC. World Trade Organization (2001) Pacific Islands Forum Statement Ministerial Conference, Doha, November. World Trade Organization (2003) Pacific Islands Forum Statement Ministerial Conference, Cancun, September. 11