An inclusive future demands political courage

Inclusive Economy19 Jun 2013Evert-jan Quak

The European Report on Development (ERD) embraces inclusive development. But to achieve this, the European Union (EU) needs to reframe its economic policy and reconsider politically sensitive issues, such as labour migration.

This week, The Broker co-organized the Dutch launch of the ERD 2013, together with the ECDPM (European Centre for Development Policy Management) and the Dutch Ministry of Foreign Affairs. The report, Post-2015: Global action for an inclusive and sustainable future, argues that the successor to the Millennium Development Goals (MDGs) should be comprehensive and contribute to a new global agenda on development and effective multilateral action. The ERD’s agenda pursues a broader and more transformative approach to development. Key to the agenda is economic transformation that creates employment, addresses inequality and social inclusion, and finds sustainable solutions.

Much of this has been written many times in different ways in other reports, such the recently published UN High Level Panel (HLP) report for Post-2015. But the ERD 2013 – jointly written by the British Overseas Development Institute (ODI), the German-based Deutsche Institut für Entwicklungspolitik (DIE), and the ECDPM and published by the European Commission – goes further. It does not only mention what goals are needed, but it also tries to seek answers as to how they can be achieved. It states that a new global development framework needs to highlight the instruments to be used and that accompanying targets should also be set.

It is clear that this new agenda goes beyond aid and beyond the current MDGs. Policies in areas, such as trade and investment, international finance, and migration have significant effects on development outcomes and therefore need to be included in the development framework. This is the policy coherence challenge that has been on the agenda for many years but still lacks proper instruments to fulfil its purpose. The ERD’s aim is to recognize that development cooperation should be connected with other important policy instruments and, where possible, specified with goals and targets within the post-2015 framework.

Take, for example, the trade and investment policies. The policies are still based on the idea of the trickle-down effect and do not focus on major challenges regarding marginalized and vulnerable groups. Just attracting foreign investments and increasing trade is not enough, if the focus is on sustainable and inclusive growth. The policies have to be fine-tuned rather than written out as a blueprint for deregulation, which is currently the case and also promoted by the European member states and Commission in trade and investment negotiations. However, the ERD concludes, ‘a new framework should make explicit the need to complement investments in the social sectors (health, education, social protection) with investments in key infrastructure and the productive sectors, in order to bring about essential structural changes.’

The EU should give extra attention to the tariff and non-tariff barriers in trade negotiations, as Paul Engel, Director of the ECDPM, emphasized in his presentation. The European Commission (EC) should also be much more flexible in the negotiations, especially towards the demands of the poorest countries, such as in the European Partnership Agreements EPA negotiations between the EU and African countries. In addition, Engel mentioned the lack of transparency in current foreign direct investment (FDI) deals.

Why is this all important? The ERD emphasizes that the aim of development should not be narrowed down to a debate only on Overseas Development Assistance (ODA) and absolute poverty rates. The ERD suggests that creating productive employment, providing support to marginalized and vulnerable groups to move up global value chains, reducing their vulnerabilities to external shocks, and enhancing productive investments and improving global coordination on investment policies, should also be effectively addressed. Only then can a sustainable and inclusive transformation of societies become reality.

Such transformation means EU member states have to look beyond their own trade and business interests. Currently this is not the case, as the ERD shows (read the blog post In search of EU ambition).

Interestingly, the ERD 2013 also bravely tackles the European debate on migration. If our politicians really want to embrace inclusive development, as one of the researchers Niels Keijzer of DIE said, then they should also reframe the debate on migration. They should not only focus on the highly-skilled labour for the service sector (read: financial and ICT industry), but also focus on improving low-skilled labour access through managing labour migration and enforcing migrants’ rights.

The EU has improved its policy on migration in the Global Approach to Migration and Mobility and in the new communication, ‘Maximising Development Impact of Migration’. However, the member states maintain restrictive policies and they give a lot of resistance to improving EU legislation.

In this sense, the ERD may not be very new content-wise. Yet, it is unique that an important European report is published, igniting a debate on all these issues by showing their inter-relationship and calling for a shift in the European political agenda.