The effects of the global financial and economic crisis on developing countries and on development cooperation (short presentation) 
President
The next item is a short presentation of the report by Enrique Guerrero Salom, on behalf of the Committee on Development, on the effects of the global financial and economic crisis on developing countries and on development cooperation -
Enrique Guerrero Salom
Mr President, Commissioner, the financial and economic crisis is producing the bitterest, severest effects on emerging and developing countries, especially on the lower income ones. This crisis has slowed down the sustained growth that has been occurring in many of these countries over the last decade: economic growth that was creating jobs, helping to straighten out their public accounts, making it possible to bring down their foreign debt, encouraging the expansion of their business activity and, in addition, helping them to obtain more official development aid.
These countries had already been suffering in the years prior to the crisis, however: firstly, the food crisis, which endangered the survival of hundreds of millions of people; then, the energy crisis, which used up many of the resources of those that did not produce oil or gas; finally, the climate crisis, the effects of which on harvests and infrastructure harm the poorest countries most of all.
The financial crisis added to this fragile situation in which these countries found themselves. As the European Commission itself points out, having affected the developing countries and emerging countries, the third wave of the financial crisis damaged the poorest countries, turning this crisis, in theory an economic one, into a development, social and humanitarian crisis.
In fact, all areas of activity in these countries have been damaged. Economic growth, which will be much lower in 2009 than in previous years, has been damaged. Trade has decreased, which will weaken these countries' current account balances. There is less foreign investment and little access by these countries to international funding, and we are seeing a growing protectionist reaction from the developed countries.
At the same time, emigrant remittances have fallen and Official Development Assistance has also been reduced. As a result, hundreds of millions of people have been added to the list of the poorest and hundreds of thousands of children will die at an earlier age on continents such as Africa.
In the face of this reality, the European voice must make itself heard by requiring us to uphold the Official Development Assistance undertakings made; by requiring new sources of additional resources to help these countries; by requiring charges and taxes on emigrants to be lightened; by requiring that attempts at protectionism should be resisted and support for a Doha Development Round to be held; by requiring action against tax havens and tax evasion; and also by working for a debt moratorium or debt cancellation for the poorest countries.
As rapporteur for this report, I wanted to obtain the greatest possible consensus and I agreed, in negotiation, to amendments by all the parliamentary groups, but I am still willing to submit an oral amendment to Section 34 of this report tomorrow, with the aim of adding further votes. This would be further authority for something I believe to be vital: that the European voice should be united and strong as regards aid to developing countries.
John Dalli
Member of the Commission. - Mr President, I would like first of all to congratulate the rapporteur for this very comprehensive report.
As rightly emphasised in this report, developing countries have been affected by the crisis much harder than initially expected. In fact, they have been hit through several transmission channels, such as volatile commodity prices, declining export revenues and tourism earnings, as well as falling capital flows and remittances. One common feature is the increase in the financing needs of many countries.
Many developing countries were often obliged to cut social expenditure (notably in nutrition, health and education), entailing severe social and political consequences and threatening not only the achievement of the MDGs by 2015, but also undermining past progress observed in recent years. Despite some first signs of global recovery, developing countries, particularly in sub-Saharan Africa, will certainly lag behind.
The EU has shown leadership and unity through a joint EU response to the crisis framed within the global response, namely within the United Nations, the G20 and G8. We have acted quickly and efficiently to translate pledges into concrete commitments to help developing countries cope with the crisis.
Last spring, the EU adopted a set of comprehensive, timely, targeted and coordinated measures to cushion the human impact of the crisis, boost economic growth in developing countries and protect the most vulnerable.
The EU response comprises not only the Community response but also the EU Member States' response (their respective bilateral responses as well as their contributions to the resources of the international financial institutions as called upon by the G20). Moreover, close collaboration with the World Bank and the IMF has enabled us to ensure the consistency of our respective analyses and the complementarity of our assistance.
As highlighted in the report, the Commission has set up and is currently implementing a very concrete and short-term ad hoc mechanism, named the Vulnerability FLEX, to support the most vulnerable countries with poor resilience capacity, with a view to enabling them to maintain priority spending, notably in the social sectors.
Other measures include reallocations following ad hoc country reviews and the advanced Mid-Term Review of the 10th European Development Fund, which is currently ongoing, support under the traditional FLEX instrument, frontloading of aid where feasible, etc.
Official Development Assistance (ODA) has played, and will continue to play, a critical role in supporting our partners' efforts in coping with the crisis. In this context, the Commission welcomes your support in urging Member States to stay committed to achieving by 2015 the 0.7% ODA/GNI target. Other donors should take similar ambitious targets for ODA increases, and we must call upon the entire donor community to live up to their commitments in terms of aid volumes and effectiveness.
On 21 April, the Commission will publish its yearly spring development package of proposals to Member States. This year, the focus will be on the actions that remain necessary to achieve the MDGs. The package will adopt a comprehensive approach and define an action plan for accelerated progress towards the MDGs. It will also provide an opportunity to make an ambitious EU contribution to the forthcoming UN High-Level MDG Review in September. In doing so, the EU will remain credible about its commitments and continue to play a leading role in international development.
Elena Băsescu
(RO) The economic and financial crisis has also hit Moldova, a developing country, very hard. This country's economy declined by 9% last year according to IMF estimates, and the unemployment rate has passed the 6% mark. Direct investment needs to be encouraged.
I should point out that Moldova has employed for a period of one year nine senior European advisers who will provide assistance to the main ministries in Chişinău.
Bearing in mind that we speak the same language, our neighbours from across the River Prut can benefit from Romania's expertise in absolutely every area.
The cost of money transfers made by emigrants from the countries they work in must be reduced. The commitment made by the G8 leaders to cut these costs from 10% to 5% in the next five years is a first step in this direction.
I would like to welcome today the record financial support amounting to USD 2.6 billion which has been granted to Moldova for the 2011-2013 period. The agreement was reached today by Prime Minister Vlad Filat during the Donor conference.
Antolín Sánchez Presedo
(ES) Mr President, although the epicentre of the crisis is not located in the developing countries, they are the ones that have been seriously and deeply affected by its huge wave.
The credit crunch, the uncertainty produced by the depression and the fall in international trade, investment flows and remittances from emigrant workers have been the main channels for the spread of a crisis preceded by a great deal of volatility in the prices of basic products and foodstuffs, and generated in circumstances of massive global imbalances.
A concerted response to the crisis must take the developing countries into account and their agenda must form an essential component of global economic cooperation.
Through the Committee on Economic and Monetary Affairs, we have asked that the International Monetary Fund consider the burden that the crisis has produced on the public finances of the developing countries in the report it is to prepare for the forthcoming G20 meeting, and that the Commission issue a communication in which an assessment is made as to how a tax on financial transactions might help to achieve the Millennium Development Goals, correct the global imbalances and promote sustainable development.
I am glad that Mr Guerrero has taken up these proposals and I congratulate him on his splendid report.
Olle Schmidt
(SV) Mr President, I would like to thank the rapporteur for his important report.
I am convinced that the best way to counter the crisis is with more free trade and globalisation, not with protectionism. Europe must therefore keep its markets open in order to combat the recession, stimulate growth, both in Europe and worldwide and, in so doing, combat poverty.
In a few days' time, the ACP-EU Joint Parliamentary Assembly will meet in Tenerife. My colleagues from the ACP countries always tend to point out the problems that the EU's subsidised agricultural products create on their markets. They need trade, but our policy counteracts the establishment of healthy markets for agricultural products in developing countries.
The EU has shown leadership says the Commissioner, but we can do much better. It is a matter of fair trade, Commissioner.
João Ferreira
(PT) The food, energy, climate, financial, economic and social crises referred to in the report are nothing more than different incarnations of the same structural crisis that has been dragging on for decades. In some regions, such as sub-Saharan Africa, wealth per capita has been continuously diverging from that of other regions in the world over decades. Despite the disparities that exist at present, developing countries tend to have certain characteristics in common: dependence on exports of a few raw materials, a lack of economic diversification, a strong focus on agriculture, the energy and extractive industries or tourism, and a strong field of foreign capital.
A progressive export and liberalisation model for trade has been pushed on these countries, if necessary, by resorting to blackmail. As shown by the negotiation process for economic partnership agreements, this leads to the exacerbation of the dependency of these countries, thwarting any possible indigenous development. Yet it is foreign debt that continues to be the principal drain on the resources of developing countries. It is paid many times over, yet as it is always growing, the debt has reached a colossal amount and self-perpetuates the overexploitation of these countries, thus maintaining the tenor of their relationship with the countries of the northern hemisphere. Cancelling the debt is simply a matter of justice.
President
Keeping to the speaking time, too, is a matter of fairness.
Andreas Mölzer
(DE) The biggest financial and economic crisis since the 1930s has, as we know, not only hit Europe hard. The developing countries are suffering particularly badly from the effects of the crisis, and they are least able to do anything about it. Irresponsible speculation, greed for quick profits which are completely unrelated to the real economy, particularly in the Anglo-Saxon countries, and a financial system that is coming apart at the seams have brought the world to the brink of a financial abyss.
Another cause of the crisis is a globalisation concept that has made complete deregulation its highest priority. The countries of Europe are getting themselves ever deeper into debt in order to restart their economies. However, in many cases, it is not possible for developing countries to do this because of their poor financial situation. Therefore, they must be given the opportunity to protect their own national economies more effectively against imported goods which are sold at dumping prices and which destroy local markets and local people's livelihoods.
We must give the developing countries the chance to emerge from the crisis under their own steam. Traditional development aid can probably be considered to have largely failed in its purpose. Ultimately, we have to tackle the root of the problem and impose strict regulations on the financial markets, prohibit speculative practices and quickly introduce a tax on financial transactions.
President
The debate is closed.
The vote will take place on Thursday, 25 March 2010.
Written statements (Rule 149)
Vilija Blinkevičiūt 
The EU has a duty to help developing countries overcome difficulties linked to the global economic crisis and poverty, which came about through no fault of their own.
It is very important that the European Commission determinedly strives for the implementation of international development cooperation reform and that together with the Council, it improves the coordination of bilateral and multilateral development cooperation, since gaps in this area are the main reason why the effectiveness of aid for development may suffer.
Developing countries need aid to reduce poverty and isolation, measures that contribute to development and measures necessary to exit the crisis, especially in this difficult period.
We will be able to implement the broad commitments adopted by generally having better coordination and action that is administered more effectively and transparently, striving for broad agreement between the main aid providers, partner countries, financial institutions and civil society.
By implementing these actions, the European Union must be the leader and act more resolutely. To that end, all European Union institutions must make greater commitments and on this matter, Parliament has undoubtedly made its opinion very clear.
Sebastian Valentin Bodu  
The developing countries have ended up the main victims of the financial crisis, in spite of the initial predictions which maintained that the developed countries would be hit hardest. The theory suggesting that developing countries are not tied in strongly enough to the global economy to be seriously affected by the crisis on the financial markets has been disproved by reality. We are seeing the crisis deepening in many developing countries, with unprecedented unemployment rates and exponential growth in government debt and budget deficits. While all this is going on, developed countries which have not felt the impact of the crisis very strongly or have had available effective instruments for mitigating its impact have experienced economic growth, albeit tentative. The economic crisis is already affecting the population directly, while unemployment is on the rise in developing countries. The efforts being made to bring about economic recovery by the states which continue to feel the effects of the crisis could affect whole social groups, as the recovery measures can only have a painful impact. EU funding programmes are the most comprehensive and inclusive among the financial aid schemes available globally. The Member States affected must benefit as appropriately as possible from the money allocated for tackling situations which restrict economic activity and have social ramifications.
Proinsias De Rossa  
in writing. - The global financial and economic crisis has hit the developed world so deeply that we are now struggling with a social and unemployment crisis. But in the least developed countries, such problems, for which they are not responsible, are compounded by the consequences of food and climate crises, with dramatic implications for a sixth of the world's population who suffer from hunger. As the largest combined aid donors, the EU Member States must fulfil their Official Development Assistance (ODA) commitments, improve aid effectiveness and coordination and strengthen their efforts to achieve the Millennium Development Goals by 2015. The extent of the damage caused by speculation in the financial sector highlights the importance of preventive measures such as taxation of financial transactions and warrants considering compensation from the sector for the costs of the crisis. As tax havens and off-shores deprive developing countries of multiples of the amounts raised through ODA, inaction in this field is unacceptable.
Siiri Oviir  
Although today we can already speak of an improvement in the economic and financial crisis in some EU Member States, we should recognise that for the developing countries, this crisis, with all its cruel effects, is still in full swing. Without a doubt, we should consider economic development to be the key phrase for resolving the current global crisis. However, while undertaking the revitalisation of our own economy, we should not forget that the continuation of the crisis in the developing countries also hinders global economic growth very significantly, and therefore also hinders our own development. I think that the Member States of the European Union must continue to give aid to reduce poverty and exclusion in the developing countries, continually adapting this to new circumstances and conditions. Considering the severe effects of the global crisis on the developing countries in particular, I support those who say that, despite the crisis, all the EU Member States could increase their collective development aid by 0.7% of their GNI by 2015. It is important to take measures to promote development and to get us out of the crisis today - in 2010. Therefore, I support those who say that, in the current situation, highly-developed countries both within and outside the EU should take steps to reform international development cooperation. We cannot allow a lack of intervention on our part to cancel out previous achievements in the areas of poverty and exclusion, and we cannot allow a situation to arise in which, instead of the current hundred million people living in extreme poverty, we have a billion people in such a position.
