Posted on 20 Apr 2009

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Asia-Europe Meeting discusses sustainable development issues

The Philippines, 20-21 April 2009

ASIA is often seen as the world’s economic powerhouse. It’s an understandable view: the remarkable industrial and commercial output of countries such as China, India, Korea and Singapore presents a strong impression of confident affluence, corporate excellence and individual dynamism.

All these perceptions are true, yet they tell only half the story. Asia is a continent endowed with wealth, industriousness and an astonishing capacity for innovation, but it is also plagued by huge levels of poverty. Indeed, by some measures, the number of poor in the region is greater than the figure for sub-Saharan Africa.

This burning issue of living standards in Asia - and how to raise them - is set to be discussed at a major global conference taking place in Manila, capital of the Philippines, on April 20 and 21. The event will bring together more than 100 senior officials from member countries of the Asia-Europe Meeting (ASEM).

ASEM is a hugely important forum for dialogue. Its 45 members together represent half the world’s GDP, almost 60 per cent of its population and 60 per cent of global trade.

The Philippines conference follows on from an ASEM summit in China last October at which those present signed off the Beijing Declaration on Sustainable Development. In this, the leaders stressed the importance of working to maintain environmental quality alongside economic development and social progress.

There is an expectation that each ASEM member country will now actively drive this agenda forwards by implementing the declaration. But there are still some huge challenges to be faced, and delegates at Manila will be facing up to these through discussions on how to balance economic demands with commitments to sustainable development.

The conference takes place against a backdrop of global economic slowdown. This was addressed at the G20 meeting in London earlier this month and the ASEM meeting takes place in that context.

Asian countries have been badly affected by this recession. Having achieved export-led growth of between five and 14 per cent annually over the last five years, many are now facing a dramatic decline in exports leading to the closure of factories and growing unemployment. To make matters worse, private financial flows have almost dried up.

History shows that economic disruption in Asia hits poor households the hardest unless effective programmes are quickly put into place. There has been significant social progress in recent years, but this remains fragile and the downturn could cause significant damage.

The World Bank estimates poverty in the South Asia, East Asia and Pacific regions to already affect more than 900 million people - in other words, two thirds of the world’s poor. A large percentage cluster just around the poverty line.

To make matters worse, official development aid per individual is extremely low - as little as a sixth of that offered to other developing countries - and has actually been declining. There are worries it may now fall further.

One mitigating factor is that ASEM developing countries have a better than average record in exerting tight control over aid flows, recording them carefully, setting up public financial management systems, ensuring predictability and establishing mechanisms for mutual accountability and the co-ordination of technical assistance.

The whole question of aid effectiveness will be an important topic for discussion at Manila. One theme may well be whether aid should focus on Asian countries where it can have most impact such as Cambodia and Laos, rather than on bigger, better developed and more resilient economies such as China and India (though they, of course, have vast numbers of poor too).

Koos Richelle, the European Commission’s Director General of the EuropeAid Cooperation Office which manages EC external aid programmes, will deliver one of the keynote speeches at the event. He is expected to present a challenging view on the future of development cooperation.

During a recent visit to Vietnam he emphasized that "After more than 50 years of development cooperation not one poor country has come out of poverty on the basis of development assistance alone. The key factor in the development of a country has proved to be the quality of leadership and governance - or 'ownership'. Building transparent and efficient governance is the responsibility of the beneficiary countries and development cooperation should be based on respect for that real ownership by donors, both official donors and NGO's". Or, as he has said more colourfully: "donorland should not be Disneyland".

“To help this process donors are willing to put more money on the table. The European Commission has its budget on aid fixed until end 2013 and based on that we have €5.2 billion of support for countries in Asia. The Member States of the European Union remain committed to their target of providing aid equal to 0.7% of Gross National Income by 2015. 2008 saw the highest level of development aid ever".

Richelle is also known for his drive to improve results and sustainability of donor actions: "But more money is not the whole story. In the past much attention was given to the size of the budgets each donor made available, the input-side of cooperation. Although size still matters, we see nowadays a clear shift of attention towards results and the sustainability of activities".
"More money also means that Parliaments - and taxpayers in general - have become more and more interested in seeing tangible results. The introduction of the Millennium Development Goals has contributed to that shift and that is why they are so important in our cooperation. But also (Re) defining cooperation between donors on the one hand and emerging economies or middle-income countries on the other hand presents a challenge on both sides. The pressure on this process has increased under the present economic crisis.”

Important discussions will also take place at the conference over the progress of Millennium Development Goals (MDG). The Beijing Declaration reaffirmed that these underpin international co-operation, and there will be debate about how both developed and developing countries should respond to challenges, especially in the light of the current downturn.

There will also be a session on climate change. There is a strong belief that sustainable development can only be achieved if countries work together to combat this threat, and a panel discussion will examine how both developing and developed countries can develop successful strategies - once more, against the backdrop of the recession.

Many of these issues are sensitive ones for both Europe and Asia, and there will be a strong commitment to work in an atmosphere of mutual respect and understanding.

But there are hopes of some real successes in Manila - not least because the combined voice of Europe and Asia has the capacity to reach and influence the lives of hundreds of millions of people both in the developing world and across more mature economies.

The preparation of this text was financed by the European Commission for the purposes of providing information to interested parties; whilst the quotations are accurate, the comments made herein do not necessarily reflect the views of the European Commission.