8 April 1992

Doc. 6594

1403-8/4/92-1-E

Report

on North-South interdependence and solidarity

(Rapporteurs: Mr AARTS, Netherlands, Christian Democrat and

Mr HOLTZ, Germany, SPD)


The problem:

      The relationship between industrialised countries in the North and developing countries in the South is taking on a new character as the East-West confrontation has come to an end. Major power rivalries and ideological conflict can no longer be used either by the North or by the South as pretexts to avoid addressing the real issues affecting development and global survival, especially as the situation of many less developed countries is undergoing significant deterioration.

Proposed action:

      Development co-operation must become a more central political concern in the 1990s. Its goal should be to contribute to a development which ensures human dignity and an existence which is economically productive, socially just and environmentally sound. Development co-operation should be primarily be based on the poverty criterion, but should furthermore take into account four additional criteria as regards developing countries: their respect of human rights, their willingness to carry out economic and social reform, their preparedness to reduce military expenditure, and their efforts to preserve the environment. The Council of Europe's "North-South Centre" could make a valuable contribution toward enhancing European public awareness of global interdependence, and the need for North-South solidarity in conformity with the Council's aims and principles.

I. DRAFT RESOLUTION

on the new North-South relationship

1.       The relationship between industrialised countries in the North and developing countries in the South is taking on a new character now that the East-West confrontation has come to an end. Major power rivalries and ideological conflict can no longer be used either by the North or by the South as pretexts to avoid addressing the real issues affecting development and global survival.

2.       Furthermore, the very term South no longer denotes a homogenous group of countries as some, such as the so-called Newly Industrialised Countries (NICs), show impressive economic progress while others, in particular the Least Developed Countries (LDCs), face stagnation or even a fall in per capita income. At the same time some parts of the so-called "Second World" (the former Soviet Union and Central and Eastern Europe) encounter problems similar to those of developing countries.

3.       The vicious circle of underdevelopment, linking high population growth with poverty and environmental degradation, must be overcome by integrating the objectives and requirements of economic growth, and by ensuring broader democratic participation of all people, a more equitable sharing of the benefits of the economic system, and environmental sustainability.

4.       Development cannot be measured only in terms of economic growth, but must also be judged by progress in satisfying basic human needs, building democracy, respecting human rights, establishing social justice and the rule of law, and protecting natural resources.

5.       Development co-operation must become a more central political concern in the 1990s. Its goal should be to contribute to a development which ensures human dignity and an existence which is economically productive, socially just and environmentally sound. Generally speaking, the aim of development co-operation should be to improve living conditions of the broad masses of the population, and to contribute to human, sustainable development.

6.       Council of Europe member states in particular should commit themselves to reaching, as soon as possible, the goal of official development assistance amounting to 0,7% of GNP, and should use for this purpose the resources freed as a result of reduced East-West tension and diminished military outlays.

7.       The efforts of the Council of Europe member states should be concentrated on the following priority areas in North-South co-operation:

i.       investing in the human being in order to stimulate the productive energies of the people, paying special attention to the need to improve the situation of women and laying the greatest possible emphasis on education and training, as well as basic health care (notably the fight against AIDS);

ii.       promoting the giving of credit and advice to small farmers and entrepreneurs, including women, thereby assisting the development of the private sector of the economy;

iii.       fighting against poverty through "help to self-help" and enhancing productivity, including in the food sector;

iv.       reducing population pressure;

v.       contributing to an environmentally sustainable development;

vi.       improving the economic conditions of developing countries by combating protectionism in the North (trade barriers of all kinds, including those of a non-tariff nature), enhancing South-South co-operation, developing regional markets, ameliorating the commodity price situation of developing countries, and promoting a diversification of economies;

vii.       realising substantial debt reductions;

viii. ensuring a greater say on the part of developing countries in        international institutions and in the construction of a new world order;

ix.       helping to eliminate the causes behind the world refugee and migration problem, such as ethnic conflicts, wars, dictatorships and destitution.

8.       "Conditionality" in development co-operation should not be restricted to purely economic considerations, but should be supplemented by the concept of "additionality", which takes into account the preparedness to realise human rights and social justice, protect the environment and cut defence spending.

9.       More specifically, future development co-operation of Council of Europe member states, whether bilateral or multilateral, should be based primarily on the poverty criterion but should furthermore take into account the four additional criteria set out below. Together these criteria form a flexible "yardstick", influencing the volume, channels and modalities of official development assistance.

i.       The human rights criterion: official aid should in principle be reserved for countries which orient themselves toward democracy, the respect of human rights and the establishment of efficient and accountable administration ("good governance"). Dictatorships should no longer be supported. Official aid to countries where the democratic process has been halted should in principle be interrupted, save for humanitarian purposes in emergency situations.

ii.       The economic and social reforms criterion: assistance should promote the building of an efficient, environmentally sound and socially just market-oriented economy. It should be made conditional on such measures as social, including land, reform; a fair distribution of income; an improvement in the lot of women; health care and education; protection of the environment; and family planning.

iii.       The military expenditure criterion: development assistance should be reserved for countries whose military expenditure appears reasonable against the background of their security situation, or in relation to their domestic national product, expenditure for social, education and public health purposes etc. Consideration should also be given to whether the country's foreign policy is oriented toward peace, for instance through participation in regional security arrangements, international disarmament initiatives, or the renunciation of weapons of mass destruction.

iv.       The environmental criterion: development projects which directly protect the environment should be supported, whereas those which cause environmental destruction or the loss of scarce and irreplaceable natural resources, such as tropical forests, should not. Countries willing to engage in active protection of their environment should be given added support.

10.       The above criteria should also be considered in the shaping of foreign policy and trade policies. It is particularly important that the latter be open and fair to developing countries, permitting them to build up their economies and become full partners in the world economy.

11.       The Parliamentary Assembly of the Council of Europe recognises the need for closer parliamentary scrutiny over the activities of international financial and development institutions, so that the latter may focus more on a newly defined development concept, one more likely to lead to world-wide human, sustainable development.

12.       Developing countries for their part must undertake determined reform to render their economies more efficient and market-oriented, combat corruption and ensure that the broad masses of the populations can share in the fruits of economic development and live in dignity and freedom. Democracy will only have a future if it is accompanied by economic development. Similarly, the latter can only be realised in an equitable world economy, in which the industrialised countries do their utmost to abolish existing trade obstacles.

II. DRAFT RESOLUTION

on the follow-up to the 1988 European Public Campaign

on North-South Interdependence and Solidarity


1.       Three years have passed since the adoption of the "Madrid Appeal" marking the conclusion of the Parliamentary Assembly's European Public Campaign on North-South Interdependence and Solidarity. The Assembly notes with satisfaction that the campaign's central aim of enhancing awareness on the part of the European public as to North-South interdependence and the need for greater North-South solidarity has at least in part been realised.

2.       The Assembly in particular welcomes the creation, in November 1989, of a Council of Europe "European Centre for Global Interdependence and Solidarity", in Lisbon, whose aim is "to provide a framework for European co-operation for the purpose of increasing public awareness of global interdependence issues and to promote policies of solidarity in conformity with the aims and principles of the Council of Europe".

3.       The Assembly welcomes the fact that 15 member states of the Council of Europe, as well as the European Community, have already joined the Centre, and hopes that all the remaining member states will follow suit.

4.       The Assembly believes that the Centre should focus on its central and unique mission of promoting public awareness in Europe of North-South issues and of counteracting "Euro-egoism", and thus bring about a better climate and a stronger political will for constructive, equitable economic relations. It should in particular build on human rights and democracy, the pillars of the Council of Europe - strengthening the trend toward democracy in the developing world and working toward greater tolerance in Europe.

5.       The Centre should avoid duplication of efforts with other institutions and, where appropriate, co-operate with relevant bodies of the Council of Europe. It should not set up its own development projects, a fact which does not preclude it from occasionally serving

as a launching platform for initiatives to be undertaken by others.

6.       Apart from promoting the above ideals through the media and public events at local, national and international level, the Centre could serve as a catalyst for educational efforts as regards North-South relations. It should also facilitate contacts between non-governmental organisations active in the North-South field, for example by establishing a catalogue of organisations concerned with development education and increasing awareness of global interdependence, and by building up a documentation base on these issues.

7.       The Centre should also reflect on ways in which its own structure and decision-making process may be improved. This reflection should include the merits of the so-called "quadrilogue" composition of the Centre's bodies (parliamentarians, governments, non-governmental organisations, and local and regional authorities).

8.       Additionally the Centre should submit, in due course and to the appropriate Parliamentary Assembly body, the outcome of such reflection, with particular reference to its view of the parliamentary role in the "quadrilogue".

III. EXPLANATORY MEMORANDUM

by Mr Aarts and Mr Holtz

TABLE OF CONTENTS

      Page

I.       INTRODUCTION: THE SOUTH IN A CHANGING WORLD       9

A.       A new world 9

B.       What do we mean by "South"?        9

C.       The Council of Europe and North-South relations        10

D.       The deteriorating situation of the LDCs        10

II.       AREAS FOR NORTH-SOUTH CO-OPERATION        11

A.       Investing in the human being       11

B.       Enhancing productivity, including food production        12

C.       Facilitating trade. The GATT Uruguay Round        13

D.       Reducing the South's debt burden while ensuring economic

      reform        15

E.       Protecting the environment. The United Nations Conference

      "Environment and Development", Rio de Janeiro, June 1992       16

F.       Reducing population pressure       17

G.       The world refugee assistance       17

H.       Emergency food assistance       19

III.       DEMOCRACY AND HUMAN RIGHTS: THE SINE QUA NON FOR       20

      LONG-TERM ECONOMIC DEVELOPMENT

IV.       COTE D'IVOIRE. THE POTENTIAL AND PROBLEMS OF AN        20

      AFRICAN DEVELOPMENT COUNTRY

A.       Introduction       20

B.       Excessive dependence on a few export crops. Efforts at

      diversification       21

C.       Excessive South-North, insufficient South-South, orientation

      of trade       22

D.       The end of the one-party era?       23

E.       A growing emphasis on the private sector. The role of women       24

F.       A staggering debt burden. The need for more, and more

      efficient, aid       24

G.       The need for closer parliamentary scrutiny of the

      activities of internationally financial institutions       25

V.       SUGGESTED CRITERIA FOR DEVELOPMENT ASSISTANCE.

      THE POVERTY CRITERION       25

A.       The human rights criterion       25

B.       The economic and social reforms criterion       26

C.       The military expenditure criterion       26

D.       The environment protection criterion       27

VI.       FOLLOW-UP TO THE EUROPEAN PUBLIC CAMPAIGN ON

      NORTH-SOUTH INTERDEPENDENCE AND SOLIDARITY        27

A. General considerations        27

B.       The "European Centre for Global Interdependence and

      Solidarity" (the "North-South Centre") in Lisbon        29

APPENDIX I:        Human Development Index as proposed by the

      United Nations Development Programme (UNDP;

      Source: Human Development Report 1991)       32

APPENDIX II:       Trends in Human Development as proposed by the

      United Nations Development Programme (UNDP;

      Source: Human Development Report 1991)       35

I.       INTRODUCTION: THE SOUTH IN A CHANGING WORLD

A.       A new world

1.       Only a few years ago the developing countries faced a relatively stable and predictable world political scene - dominated by the two super-powers the United States and the Soviet Union, with a divided Europe and a Japan still only emerging as an economic force.

2.       Today the Soviet Union exists no longer, and the United States, while still the militarily strongest nation on earth, is confronted with serious economic problems. Democracy is taking vast strides forward, albeit with some difficulties and setbacks, in Central and Eastern Europe and in the republics of the former Soviet Union. The countries of the European Community in Maastricht last December made significant progress toward the goal of monetary and political union by the end of the century, and only slightly earlier, in October 1991, they decided to create a European Economic Area (EEA) together with the seven member states of the European Free Trade Association (EFTA) by early 1993.

3.       In brief, then: a world of stability, but also of stagnation, has given way to one of instability - but also of change and new opportunities. No longer can certain countries in the South put processes like democratisation and the respect of human rights "on the backburner"; no longer can they play out East against West and vice versa, while doing nothing for the betterment of their populations. Increasingly, assistance will only be forthcoming as and when it can be assured that it will benefit the people, as opposed to just the rulers. There is a new assertiveness among Western donor countries in general, and Council of Europe member states in particular, when it comes to attaching requirements of the above type to development assistance. The Parliamentary Assembly, like the Council of Europe as a whole, has been in the forefront of this process and intends to remain so.

B.       What do we mean by "South"?

4.       The concept North-South leads easily to an over-simplified picture of a world divided into rich and industrialised countries on the one hand and poor and underdeveloped ones on the other. In reality, however, the countries of the North and those of the South are highly diverse even among themselves as regards levels of development and economic, social and political structures. This is also pointed out by the United Nations Development Programme (UNDP), which has developed a "Human Development Index" to permit a wider definition of development. (See paragraph 20 and Appendix I.)

5.       For example, the newly industrialised countries (NICs) of Asia -  such as Hong Kong, the Republic of Korea, Singapore, Thailand and Taiwan - have, over the last two decades, demonstrated impressive economic progress. By and large they have eliminated hunger and major diseases that afflict many countries in the South. In fact, the per capita incomes of for example, Hong Kong, the Republic of Korea and Singapore equal those of a number of countries in Western Europe, even though great inequalities of income prevail. (At the same time some parts of the so-called "Second World" (the former Soviet Union and Central and Eastern Europe) encounter problems similar to those of developing countries.)

6.       The progress of the NICs has not, however, been shared by the poorest countries of the South, the so-called least developed countries (LDCs), especially in sub-Saharan Africa but also in parts of Latin America. Over one billion people, one-fifth of the world's population, live in poverty in these countries (poverty being defined by the World Bank, in 1990, as signifying a yearly income of less than $ 370).

C.       The Council of Europe and North-South relations

7.       To the Council of Europe, and in particular its Parliamentary Assembly, the above situation has always been unacceptable. Even since the Assembly's first Conference in Lisbon in 1984 on the theme "North-South: Europe's Role", it has maintained that "this world is one", and that the fate of the South, that is the developing world, will sooner or later determine that of the North, the industrialised world, if it is not doing so already. The Assembly's European Public Campaign on North-South Interdependence and Solidarity, carried out in 1988 with hundreds of different manifestations in virtually all Council of Europe member states was a further proof of our commitment. The contents and results of that campaign have already been amply described in Recommendation 1095 (1989), and it is therefore not necessary to repeat them here. The question of the subsequent follow-up to the campaign in the three years that have since passed does, however, present itself, and will be dealt with in the last section of this report.

D.       The deteriorating situation of the LDCs

8.       The economic future of many LDCs, for instance in sub-Saharan Africa, looked comparatively promising in the 1960s as they gained independence. Yet with rapid population growth, real per capita incomes and living standards have declined, and much that was achieved in education and health has been eroded by the constantly increasing populations. With the LDCs falling ever deeper in despair, the 1980s can be rightly described as a "lost decade" for development for this group of developing countries.

9.       The economic hardships have rendered many LDCs considerably less stable. Social tension has increased, sometimes leading to civil war and large international migrations of refugees.

10.       Demographic pressures are at the root of many problems in LDCs. The latter have experienced continued high population growth during the last decade, and 95% of the global population increase over the next thirty-five years is expected to take place in the developing countries of Africa, Asia and Latin America. These are precisely the nations least equipped to cope with such strains.

11.       Population growth coupled with continued drought - and rising water use per capita due to industrialisation and enhanced irrigation could cause a severe strain on water supplies, expected to be the scarce natural resource of the 21st century.

12.       Food production in the countries concerned is not likely to keep up with population growth. Between 1979 and 1987 cereal production per person declined in 51 developing countries out of 94 for which Food and Agriculture Organisation (FAO) data are available. In the 1980s the number of hungry people increased considerably. The fragile nature of the world's food security system, rampant population growth and continued soil erosion combine to make a world food crisis more likely (cf. also Resolution 961 (1991) on Food Aid and Food Security Policies; Doc. 6404).

13.       Land is the main source of livelihood for 60% of people in the South. Soil erosion makes land suitable for cultivation even scarcer. Farmers are forced to exhaust the soil by excessive use, without being able to afford fertilisers or conservation measures. Thus, soil erosion in combination with other environmental damage could prove catastrophic for the South.

14.       Population growth and difficulties to earn one's living by farming, due to lack of arable land, has led to continued massive migration to the cities in the South. City populations are growing four and a half times faster than in the North. Growth is already by far outpacing the capacity of local and national governments to provide adequate city services.

II.       AREAS FOR NORTH-SOUTH CO-OPERATION

15. In order to avoid having a large number of developing countries sink deeper and deeper into economic despair, and further widening of the gap between the North and South, priorities for co-operation must first of all be agreed on. Your Rapporteurs believe that the following points comprise the main areas on which North-South co-operation should focus in the coming years.

A.       Investing in the human being

16.       It is becoming increasingly clear that lasting economic development can only take place if the human being - that is to say the broad masses in the developing countries - is made the centre of attention. The Parliamentary Assembly has long recognised this, which is all the more natural since the Council of Europe is built on that idea. Education, the struggle against illiteracy, vocational training but also economic systems that respond to and reward human aspirations form part of this.

17.       The Parliamentary Assembly's series of "Strasbourg Conferences on Democracy"1, of which the last was held in September 1991, have continuously stressed the above principles. Furthermore, a colloquy organised in the framework of the Strasbourg Democracy Conferences was held in Dakar, Senegal, in March 1991 on the theme: "Democracy and Development in Africa: The Experience of African ACP countries".

18.       More and more countries and international organisations active in development assistance seem to recognise the importance of individual dignity, liberty and initiative. Thus, the United Nations Development Programme (UNDP) Annual Report for 1990, for example, argues that grassroots participation is at the core of "people-centred development. People themselves should be given the means to take care of their future. It is the role of governments to shape a framework

which actively promotes participatory development. Development springs from, and takes its strength from, individuals, from their desires and aspirations. Decision-making must be decentralised so as to respond to

local needs. Development is not a one-time effort but a daily, perpetual pursuit whose success can only be ensured if it rests upon the motivation, enthusiasm and economic self-interest of thousands of entrepreneurs and employees, from the cities to the smallest villages.

development". The need to improve the situation of women has been stressed repeatedly by the Parliamentary Assembly, and also by the Committee on Economic Affairs and Development during the preparation of this report. In many developing countries women do the bulk of the work, yet are relegated to a second-class status and often do not stand to benefit at all from economic assistance. This is something which has to be changed, in the interest both of fairness and of economic development as such.

19.       We note with satisfaction that also in the South these ideas are gaining ground. The South Commission report "The Challenge to the South" (1990), - one of whose co-authors, Mr L. Yaker, came before the committee in June 1991 - equally calls for people-centred development and links development to popular participation, democracy, public accountability and respect for human rights. The South Report maintains that "development must be conceived as a process which enables human beings to realize their potential, build self-confidence and lead lives of dignity and fulfilment".

20.       This is also recognised in the "Human Development Report 1991" drawn up by the United Nations Development Programme (UNDP). The first publication of its kind, the report, which will serve as a reference for all United Nations work on the subject, states inter alia that "just as economic growth is necessary for human development, human development is critical to economic growth". It also asserts that "high levels of human development tend to be achieved within the framework of high levels of human freedom", and that "the main task is to invest in people, liberating their initiative". This kind of thinking is very much in line with what the Parliamentary Assembly has put forward for years. The emphasis of the UNDP on the human being has led the organisation to employ, in the above-mentioned report; a "Human Development Index" for all countries, rich and poor. The components in this index include life expectancy at birth, adult literacy rate, mean years of schooling, educational attainment and per capita income. The country listings for 1991 are given in Appendix I, while Appendix II shows trends in human development in the above respects between 1960 and 1990.

21.       Finally, the experiences gained by North-South assistance agencies as regards the development of human resources should also be put to use in East-West co-operation, for the similarities between developing countries and those of Central and Eastern Europe are there. Again, without the motivation and adequate training of the individual -so long neglected in the midst of five-year plans and suppression of individual initiative - no economic development is conceivable.

B.       Enhancing productivity, including food production

22.       For decades, economic development in many countries of the South has been hampered by a combination of factors, such as:

-       trade barriers imposed by a North fearing competition, such as in agriculture, textiles and certain manufacturing industries (a subject we shall return to in Section II C below);

-       ill-conceived nationalisations of industries, leading to stagnation, poor use of resources and an inability to compete internationally;

-       a parallel suppression of the private sector, which is only now beginning to receive appropriate support and encouragement (see also Chapter IV on the potential of the "unofficial economy" in a country like Côte d'Ivoire).

All this is, then, beginning to change in the new world setting described in the introduction, and the North must do everything in its power to assist the process.

23.       One important area is food production. In many developing countries agricultural output has lagged behind population growth, reducing food safety. Often food shortages have been met by emergency aid from the industrialised countries, even though the shipment of food has frequently been hindered by civil wars or limited port and transport capacity in the recipient nations. It cannot, however, be guaranteed that the North will be able to compensate for similar deficiencies in the future, especially if needs in certain parts of Eastern Europe should increase.

24.       For instance, at the end of the 1980s international food prices rose considerably, and world stocks of cereals were reduced. The lower volumes of food aid that followed had serious consequences for many Southern countries, especially in Africa.

25.       The land still provides the livelihood for a majority of the populations in developing countries, even though that will change early in the next century if present migration rates to cities continue. Population growth coupled with degradation of arable land have reduced the ability of local agriculture to provide sufficient food. In order to avoid even greater dependence on the North for its supply of food, the South must find ways to counter this trend.

26.       The FAO has listed as essential areas of reform: greater incentives to farmers; better supply of inputs; a better-functioning administration; and improved infrastructure.

27.       Agricultural exports to industrialised countries may - to the extent that they are restricted to just a few crops and a country orients its entire economy toward them - do the South more harm than good. In many countries almost the entire agricultural production consists of exports to the North, neglecting domestic needs. Some exports have become clearly unprofitable as demand has declined, sugar, cocoa and coffee being some examples.

28.       In short, the South should be encouraged to stimulate food production for domestic use, also because this could give rise to a number of economic activities related to farming. Such policies will also, however, require increased investment to develop transportation infrastructure. Also, the private sector of the economy (often in the past referred to as the "unofficial" economy) must be made the main vehicle for economic growth, instead of the often vastly oversized and inefficient public sector.

C.       Facilitating trade. The GATT Uruguay Round

29.       The feeling of exclusion on the part of countries of the South is perhaps nowhere greater than in the area of trade. The North is the centre of world economic activity and power, and dominates international trade and markets. Many policies followed by several industrial countries run counter to the efforts to create a new North-South relationship, and to helping the South develop economically. The North often pursues trade policies which, especially in agriculture, hinder development in the South in the only area where they may be able to compete. Northern subsidised food exports in turn undercut domestic production in the South, so that, paradoxically, European taxpayers help drive Southern peasant farmers off the land.

30.       Agricultural exports from the OECD area to developing countries at present account for some 40% of the OECD total production! Commodities involve cereals, processed dairy products, natural fibres and processed food. The composition of exports has changed during the 1980s, with declining shares of cereals and sugar and a greater weight for meat and dairy products. The South exports less agricultural products to the OECD countries than previously. Thus, there has been a substantial reduction in the share of sugar and some decline in cereals, oilseeds, oils and fats, as well as many tropical agricultural products, particularly coffee, cocoa and tea. In part this is due to changing consumption patterns, the start-up of domestic production in the North of the same or similar products, and protectionism, for example, in agriculture.

31.       The shortage of foreign exchange in the South, due to reduced exports, has had negative consequences for investments in the transport sector, and the supply of intermediate products and energy to industry, leading to a decline in production capacity.

32.       Industrialised countries are aware of the adverse effects which their protectionist policies have on the South. This was shown as during the mid-term review of the GATT Uruguay Round in 1988 a commitment was made to liberalise trade in tropical products. In 1989 a framework for liberalising agricultural trade was established, recognising that "a special and differential treatment to developing countries is an integral element of the negotiations". As these lines are written, the GATT Uruguay Round enters its long-delayed final stage, and it must be ensured that the interests of the South are not forgotten or sacrificed in the midst of North-North trade squabbles, in particular those opposing Europe, the United States and Japan. It is worth recalling in this context the Assembly's Resolution 948 (1990) on "The Uruguay Round - Prospects and Obstacles", in which the Council of Europe member states are called on to "work strenuously and generously towards integrating into the world trading community the two groups of countries that have so far remained largely outside it - the less developed countries and the reformist nations of Central and Eastern Europe - in particular by alleviating their debt burden and granting them greater access to markets".

33.       The development of "South-South" trade becomes increasingly important, as a counterweight to what is often an excessive North-South bias. In brief, why should a Southern country in, say, Africa trade much more with a distant North than with its next-door neighbours? Here Northern countries are partially to blame for having geared the world trade system toward its present state. But the South also has to assume its share of responsibility for present difficulties - making it impossible for, say, a company in Africa to sell its products outside national borders. Free trade areas have been created in various regions in the South, but only a few, such as in Latin America, have lived up to expectations. And it is here we must seek one of the conditions for lasting economic development in the South. Much can be learned, for instance, from Mexico's partnership in the North American Free Trade Association (NAFTA).

D.       Reducing the South's debt burden while ensuring economic reform

34.       The debt burden of the South remains a major obstacle to social and economic development. According to recent figures of the OECD (Press Release of 5 September 1991) the total external debt (official and private) of developing countries stood at $ 1 450 billion at the end of 1990. Some African nations, especially south of the Sahara, have to use close to half their exports earnings just to service their debt and the situation is also serious for some middle-income Latin American countries. High international interest rates have aggravated the situation.

35.       Northern efforts to fight inflation, for example through higher interest rates, have undoubtedly hurt many southern countries, both by making debt servicing more expensive and because industrialised markets in recession mean less imports from the Third World. High interest rates - reflecting a general scarcity of capital in a world plagued by high budget deficits and busy assisting Central and Eastern Europe - also mean reduced capital flows to the South.

36.       On the whole, however, the indebtedness of developing countries seems to be stabilising. The total external debt at the end of 1990 was only 6% higher than in 1987, and for the developing countries in the Western hemisphere it had gone down by 3% during the same period. Similarly, total debt service payments declined slightly in 1990 to some $ 162 billion, even though they remained high for Sub-Saharan Africa. 1990 was in fact characterised by a steady flow of bilateral official aid (DAC), a surge in Arab flows, and continued increases in direct investment and new forms of private portfolio flows. The flow, and debt relief, have been particularly strong towards countries which have tried to reform their economies, such as Mexico, or where a crisis has been pronounced, such as in Egypt in 1990. This would point to the virtue for developing countries to "adjust" their economies; increased official and private capital seems to be the reward.

37.       Donor countries recognise the seriousness of the situation, and the obstacle to economic development in the South presented by the debt burden. Various proposals have been made. The Assembly in 1990 adopted Resolution 952 calling on OECD member countries "to cancel entirely or partially the official development assistance loans of the poorer developing countries" and "to reschedule or consolidate the remaining foreign debt of the Third World, for instance through longer repayment periods, upper limits on interest rates, a limitation of debt servicing to a certain percentage of incomes from exports, or 'debt-against-nature' swaps".

38.       "Debt-against-nature" has been hailed as one possible way out. Here an indebted country promises to establish, in exchange for cancellation of a portion of its foreign debt, local currency funds to finance nature conservation programmes. "Conditionality" in development co-operation, essentially meaning conditions attached for the granting of loans, can take many forms. It can usefully be supplemented, however, by "additionality", which should take into account the preparedness to realise human rights and social justice, protect the environment and cut defense spending.

39.       The North has been criticised for forcing debtor countries to give primacy to debt service, at the expense of urgent domestic needs. In some cases developing countries have had to reshape their economic policies according to conditions set by the North, in particular the International Monetary Fund. It is a matter of debate whether such conditions are socially tolerable. It seems, however, that where they involve protection of the environment and further progress towards sustained development and democracy, then this serves the interests of both North and South and will increase solidarity between them.

40.       Some members of the Committee on Economic Affairs and Development asked that the present report also take up the issue of why certain developing countries seem to have fared much better than others in the last few years. Mexico, which only a short time ago was mired in debt and stagnation but which is now showing a remarkable rebound, is one example that springs to mind. It seems that a number of countries have taken major steps to introduce more of a market economy, reduce their excessively large public sectors, open themselves up to international competition and, at least in some instances, become more democratic and respectful of human rights.

41.       A kind of "Third World perestroika" similar to that in Central and Eastern Europe is thus under way, but it must be recognised that the economic suffering of large portions of the populations is considerable. Those who advocate the measures maintain that if no reforms are made, the entire society will sink into despair, whereas with reform even the poorest will ultimately stand to gain. This depends, however, on the social policies adopted, an on the general distribution of wealth. Economic growth, in order to be lasting, must benefit all, not just the few already rich.

E.       Protecting the environment. The United Nations Conference on        Environment and Development, Rio de Janeiro, June 1992

42.       The continued destruction of our environment has reached global proportions and even calls in question the survival of mankind itself. Global warming, the reduction of the ozone layer in the atmosphere, the destruction of tropical and other forests, soil erosion, pollution and scarcity of water are all inter-related and present grave threats.

43.       A second United Nations conference on the environment - the United Nations Conference on Environment and Development (UNCED) - will be held in Rio de Janeiro from 1 to 12 June 1992. As the Assembly is drawing up a special report on this subject, it is not necessary to deal with it in detail in this report. Suffice it to say that the Rio de Janeiro Conference must establish standards for the industrialised nations as regards their environmental policies, not least in so far as they affect the climate. Furthermore, the world economy needs to be similarly reoriented, for instance through the laying down of social and environmental standards for GATT, the International Monetary Fund and multilateral developments banks. Industrialised countries should also compensate developing countries for the environmental destruction (eg through the burning of fossil fuel) which are caused mainly by the North, but from which the South is the main party to suffer.

44.       It would, moreover, be important to conclude a World Climate Convention, including stringent protection of tropical forests. A determined struggle against poverty should be initiated at the Conference, and the work of non-governmental organisations in development matters furthered, in particular as they involve rural populations and women.

45.       On a more general score, it is important to strengthen the United Nations in its operational role in the field of development, including in emergency relief and ad hoc operations. This should be done by giving a greater role to the specialised agencies of the organisation, in particular the United Nations Development Programme (UNDP), using the UN's global membership as a means for collecting and disseminating information. If the United Nations is to assume these new functions - as recommended by the so-called Nordic United Nations project in a "Stockholm Initiative" published in April 1991 - it must, however, receive proper funding from member states.

F.       Reducing population pressure

46.       A grave world food crisis is looming as a damaged environment, and population growth in the South, will send more and more people competing for increasingly scarce food. The United Nations Population Fund (UNFPA) predicts that the world population will at least double in the course of the next century.

47.       As population growth will mainly take place in developing countries the number of poor, illiterate, malnourished and homeless will continue to rise. Migration to cities and attempts to move to industrialised countries will intensify.

48.       Although much progress has been made in improving the access of people in developing countries to family planning, resources are still insufficient. Information to women is particularly important for controlling birth rates. Countries with the highest female literacy rate are also those with lower fertility. Educated women tend to marry later and have fewer children than those without schooling.

49.       The subject of family planning is controversial, partly for reasons of religion and even in our own Parliamentary Assembly. The Rapporteurs mention it, however, as it seems to them impossible to eschew the issue any longer.

50.       There are those who maintain that more people in the world bring about more economic activity and trade, and hence greater wealth. As per capita wealth rises, they maintain, birth rates will come down, if only because more well-to-do people will need to have fewer offsprings to support them, as indeed has been shown in the industrialised world.

51.       The problem is to lift per capita incomes to the "magic level" for this to happen. And per capita incomes in the LDCs have fallen, not risen in recent years. In addition, increased population pressure "eats at" the environment, erodes the soil, bares the land of precious wood - and in the process make impossible any future productive use of the land in question. Thus, family planning ought to be an integral part of any long-term strategy for economic development in the less developed countries concerned.

G.       The world refugee and migration problem

52.       The increasingly urgent refugee problem in the world forces the international community to attack its root causes. More and more asylum seekers come to Council of Europe member states, and the trend can only be reversed if the fundamental reasons for the flow in the countries of origin are remedied. Changes are necessary not only in the developing countries themselves and in the North-South relationship, but also on the part of industrialised countries and specialised international organisations.

53.       The population flows from South to North are above all a consequence of the growing economic and social gap between the two sides. Hence the North must introduce policies which reduce this cleavage. Destitution, hunger, wars, civil strife, ethnic conflict, environmental damage, catastrophes, population growth, human rights violations and dictatorships will only lead to more refugees. At the same time, the industrialised North offers better living conditions, human rights, democracy, better education and peace.

54.       Developing countries are the ones mainly affected by the refugee problem. According to the Office of the United Nations High Commissioner for Refugees (UNHCR), there were, by August 1991, 17 million refugees worldwide. This represents an increase of 2 million people since 1990. To this should be added another 2,42 million

Palestinian and 0,35 million Cambodian refugees who fall under the responsibility of other United Nations agencies. Around 90% of all refugees go to other developing countries, while the rest try to move to Europe and North America.

55.       Against this background it is necessary to start long-term programmes to eliminate the causes behind migration, while at the same time strengthening our ability to help in emergency situations. We need forward-looking international co-operation to solve this problem, and to bridge the gap in wealth between the North and the South, and between the West and the East.

56.       The following measures should be taken:

-       A coherent human rights policy which should be one of the main criteria guiding foreign relations. Dictatorships must no longer be supported directly or indirectly, even if certain exports suffer as a result. For countries which are not democratic, development aid and other forms of co-operation should be offered only if progress is made in the human rights field. In the case of flagrant violations of human rights aid to the victims of these violations should be channelled through NGOs. Moreover, strategies permitting the resolution of ethnic conflicts should be worked out;

-       Greater means should be placed at the disposal of agencies helping refugees. Refugees should be given better help immediately after their arrival in the new country, so as to ensure their survival, secure their existence in a country of haven, or facilitate their return. Contributions to the UNHCR should be increased;

-       The North should provide adequate financial, scientific and technological resources to prevent, or reduce, the effects of catastrophes. Human lives can then be saved, migratory movements reduced, and the material losses in the countries concerned mitigated;

-       A "preventive" development policy should be pursued with the aim of reducing, over the longer-term, new and even larger refugee flows. The goal of development policies should be to contribute to a development in the Third World which ensures human dignity and an existence which is economically productive, socially just and protective of the environment;

-       Dictatorships, oppression, corrupt elites, inefficient administrations, out-moded concepts of management, unfair and inefficient methods of production and grossly unfair distribution of wealth and income should no longer be tolerated. All this will require more resources from the North. Both the World Bank and the UNDP (cf for example its 1991 Human Development Report) stress that many developing countries have to reduce their military budget considerably. The UNDP points out that military expenditure absorbs 5,5% of the GNP of the developing world. In some of the poorest countries - such as Angola, Chad, Pakistan, Peru, Syria, Uganda and Zaire - this spending is at least twice that on health and education;

-       The situation of the Third World within the world economic system must be improved, for instance through a solution of the debt crisis and better trading conditions for developing countries within the GATT;

-       A more active peace-promoting policy, including restrictions on the exportation of arms.

H.       Emergency food assistance

57.       Although the world at present produces enough food to feed everyone, some 550 million people in developing countries suffer from malnutrition. The total number of poor has grown despite so many conferences and programmes envisaged to alleviate their plight.

58.       The situation is extremely serious in sub-Saharan Africa, particulary the Sudan, Ethiopia, Somalia and Mozambique - countries which have been torn apart by civil war and other man-made disasters. In Sudan, for example, one-third of the population is starving (approximately 8 million out of a population of 24 million). Besides hunger, these populations suffer from the effects of war, as well as natural catastrophes such as droughts and floods, which frequently strike the continent. Small wonder, then, that the populations concerned are not in a position to pursue organised work leading to economic development.

59.       In order to be able to combat famine and to construct its essential political and social infrastructure, the South needs immediate as well as long-term aid.

60.       The aid to the developing countries must also include the public health dimension and, of increasing importance, a strategy to fight the spread of AIDS. In Sub-Saharan Africa alone around six million adults are estimated to be HIV-positive. In some urban centres AIDS is the leading cause of mortality among adults and one of the main determinants of infant mortality. Some predict that in the worst-affected cities, some 20-30% of the population are HIV-positive.

61.       AIDS is a disease which affects all layers of the population, both the poor and the best educated, that is those who most immediately could contribute to the economic development of the countries concerned. Apart from this, social security and health care will come under increasing strain. Since the ways of contracting and preventing AIDS are mainly known, more efficient communication of information and education projects could slow its spread.

62.       Long-term co-operation with the South ought to concentrate also on non-material aid, such as the building of democratic and human rights institutions, privatisation of state-owned companies, technical assistance and, generally, the adoption of a more market-oriented economy. As many developing countries have pursued dogmatic and often highly damaging economic policies in the past, such as large-scale collectivisation programmes and ill-conceived nationalisations of industry, experiences in the North gained both from its own domestic reforms and the effort to reform the economies of Central and Eastern Europe could benefit the South, and vice versa.

63.       Even though the South must be given the means to help itself, the main responsibility for its development rests in its own hands. Northern assistance should be based on this principle. Irrespective of the kind of aid, better dialogue between donor and recipient is necessary at local level in order to allow both sides a better perspective of the assistance needed.

III.       DEMOCRACY AND HUMAN RIGHTS: THE SINE QUA NON FOR LONG-TERM        ECONOMIC DEVELOPMENT

64.       Recent years have seen a growing discussion of a possible link between democracy and the respect of human rights on the one hand, and economic development on the other. Like many countries in Central and Eastern Europe, several developing countries have started to dismantle their system of central planning and state ownership of industry in favour of privatisation and a market-oriented economy.

65.       Autocratic or dictatorial governments in the South have been challenged as more and more people realise the limits on development posed by the one-party state, especially when accompanied by mismanagement of the economy and violations of human rights. Over-centralisation of economic and political decision-making stifles human initiative and change, and hinder economic growth.

66.       Development cannot be seen only in terms of economic growth, important though it is, but must include a democratic form of government, freedom of speech, association and information, and known and publicly accepted laws and systems of justice. We will return to practical recommendation in this area in Chapter V.

IV.       COTE D'IVOIRE: THE POTENTIAL AND PROBLEMS OF AN AFRICAN        DEVELOPMENT COUNTRY

A.       Introduction

67.       From 11 to 13 September 1991 the Sub-Committee on International Economic Relations (of the Committee on Economic Affairs and Development) met in Abidjan, the major city in Côte d'Ivoire (formerly the Ivory Coast).

68.       The reasons for the sub-committee's visit were several:

-       to experience "on the spot" the particular difficulties of a developing country in Sub-Saharan Africa, generally considered to be one of the most seriously underdeveloped regions in the world;

-       to examine the progress in the region towards democracy and respect of human rights, believed by the Council of Europe, and increasingly the world as a whole, to be a necessary concomitant to lasting social and economic development;

-       to hold exchanges of views with international development agencies - in the case of Abidjan the Regional Mission of the World Bank for West Africa and the headquarters of the African Development Bank - so as to better supervise their activities. It will be recalled that the Assembly's Resolution 952 (1990) on OECD activities, called for "equipping the World Bank and the International Monetary Fund with parliamentary observer institutions which can monitor their activities and ensure that their policies (1) promote sustainable, socially just and environmentally sound development in the third world, with particular emphasis on human rights, democracy and reduced defence spending and (2) involve recipient countries and in particular the populations concerned, at all stages in the planning and implementation of projects, thus ensuring their essential "human dimension";

-       to take the information gathered during the visit into account in the preparation of the present report on North-South interdependence and solidarity.

69.       The problems of Côte d'Ivoire in many ways typify those of the poorer developing countries in Africa and Latin America, even though the country's average per capita income (740 dollars/year) is considerably higher than say that of neighbouring Burkina Faso (190 dollars/year) or Mali (210 dollars/year). Illiteracy is considerable (57% of the population); the country depends excessively on the exportation of just a few dominant crops, mainly to industrialised countries; and the one party rule is only hesitatingly being abandoned in favour of a more democratic system respectful of human rights.

70.       The sub-committee's choice of country was thus well-considered, and its schedule of meetings hectic. In the course of three days, extensive consultations were held with the World Bank Regional Mission for Western Africa, the African Development Bank and with Air Afrique, the only regionally owned airline in the developing world. The sub-committee also met with the President of the Côte d'Ivoire National Assembly, the country's Prime Minister and - in memorable session - at the German and Swedish Embassies - a large number of representatives of the Côte d'Ivoire political opposition. Finally, the sub-committee had the opportunity of visiting a number of operations in the field managed by the institutions indicated.

B.       Excessive dependence on a few export crops. Efforts at        diversification.

71.       Partly through colonial legacy, partly due to its own misguided policies in recent years, Côte d'Ivoire today finds itself caught in what might be called a "trade trap". In the 1970s and early 1980s, the prices of cocoa and coffee, the country's major crops, rose rapidly, and the Côte d'Ivoire economy grew at an impressive yearly pace of about 7% and the per capita income rose briefly to 1 200 dollars per year. The country in this situation started an ambitious expansion of its production of these two commodities - not realising that others, such as nations in South-East Asia and Latin America, quickly followed their example (often, as it happens, thus helped by institutions such as the World Bank). The result, manifesting itself as from the mid-1980s, was a collapse in the prices of, in particular, cocoa (by about 40%). However, with so much invested in plantations of these crops, can a country like Côte d'Ivoire afford not to produce and sell them, hoping to reduce losses by selling in larger quantities? On the other hand, by doing so, do not Côte d'Ivoire and other countries in similar situations simply deflate world prices further - ensuring, as it were, permanent poverty (African countries have lost an estimated $ 50 thousand million in the last five years because of the fall in world prices for their export commodities.) And are not we, the consumer countries, the big winners? Have we even, in one tropical export commodity after another, sought to achieve this state of affairs? Or is it only "the law of the market place" at work, John Adam Smith's famous "invisible hand"?

72.       However this may be, this situation clearly preoccupied members of our sub-committee, regardless of their political affiliation. What can we do in our countries, they asked, to remedy it? Open up your markets, was one answer from our Côte d'Ivoire interlocutors, open them to the things our countries can produce better and cheaper than you - sugar being one example where Northern countries have chosen heavily to subsidise domestic production instead. Try to uphold a minimum price for commodities, others argued, but that has been tried before with only limited success, for market forces are stronger than any human artifact. Cushion the effects by compensatory payments, was a third advice. Perhaps, but how ensure that they reach those who suffer the most from price falls, ie the ordinary people? At any rate, this is an area of vital importance to numerous developing countries, and one which the Committee on Economic Affairs and Development will have to consider seriously in the months to come.

73.       This being said, efforts to diversify the nation's economic life are being undertaken, through increased production of cotton, bananas, palm oil, rice and corn and the Sub-Committee was able to give them its strong support in the course of its visit. (Indeed, Air Afrique is helping in this process, as it offers advantageous conditions for shipping perishable products such as shrimps to European markets.) However, more could and should be done, also in order to supply urban populations in the country itself with locally produced food, instead of relying solely in imports.

C.       Excessive South-North, insufficient South-South, orientation of        trade

74.       The problem of a skewed world trade system concerns not only the crop dependency referred to above, but also the almost complete lack of intra-regional trade among the countries of Sub-Saharan Africa. Yet it is here that - for reasons of geographical proximity, economic complementarity among nations and similarity of economic development - the trade potential would appear to be the greatest. The problem extends even to air connections, where - as the sub-committee learnt in the course of its discussions with Air Afrique - it is almost impossible to travel from French- to English-speaking Africa, or from the Western to the Eastern part of the continent. The same holds for trade, which normally faces high tariffs and bureaucratic complications. Thus, stimulating regional trade and co-operation among developing countries must be a priority. Air Afrique itself, which is jointly owned by ten African states, and the common currency agreement (the so-called CFA-zone) among several French-speaking African countries show that such collaboration is possible.

D.       The end of the one-party era?

75.       The Côte d'Ivoire is governed since 1960 by the ageing Félix Houphouet-Boigny, Leader of the only party admitted for decades, the Parti Démocratique de la Côte d'Ivoire - Section du Rassemblement Démocratique Africain (PDCI-RDA). Only in 1990 could elections bearing a semblance of democracy take place. It is worth stressing the word "semblance", for in the sub-committee's discussions with representatives of various fledgling opposition parties, complaints were numerous - ranging from insufficient time to form parties prior to the suddenly announced elections, to outright tampering with ballot boxes and to impossible working conditions for opposition members in the newly formed parliament.

76.       It was, of course, not possible for our sub-committee to check into all these allegations. However, it is fair to say that Côte d'Ivoire, like so many other African countries, has a long way to go before it can be said to have realised democracy, respect of human rights and institutions fully accountable to the people.

77.       At the same time it would be wrong to overlook what modest improvements there have been. After all, there are now several official parties in Côte d'Ivoire, and the opposition was no doubt strongly encouraged also by the sub-committee's demonstrative insistence upon meeting them in the German and Swedish Embassies and in statements before the press and national television. And the present period is, for the first time in many decades, singularly propitious for the spread of democracy. Firstly, in the past dictatorships could court either of the two super-powers and receive assistance (sometimes from both!) while retaining one-party oppressive systems. Today, however, when the rivalry between East and West is a thing of the past, this is no longer possible.

78.       Furthermore, the largesse of industrialised countries as regards development aid is gradually being replaced by a much stronger insistence on checking how such aid is used. More and more Council of Europe member states, for instance, are declaring that receiving countries must introduce democracy and start respecting human rights if they want to continue to benefit from co-operation programmes. One of the sub-committee's interlocutors even spoke of a "Helsinki Process" transcending Africa. Let us hope that he is right.

79.       By the same token, only if accountable government, a free opposition and a free press are firmly established will there be any hope of curbing corruption, in Côte d'Ivoire as elsewhere: "kick-backs" in the awarding of public contracts (often realised with development aid); an inflated but largely idle public sector; or profits from exports landing in the pockets of the few, rather than on the dinner tables of the many. Even here there are welcome signs of African countries slimming down their public pay-rolls and clamping down on corruption, which, it must be remembered, only scares away investors and hurts the entire economy.       

80.       Closely linked to the above is the need to decentralise decision-making down to the regional or local level, and also to let fiscal revenues be kept by the provinces instead of syphoned off to a distant capital. Abidjan itself has an impressive skyline and an even more imposing basilica at Yamassoukro (Félix Houphouet's birth place, as it happens), but presumably the riches gathered during the boom period of the 1970s could have been put to better use, for instance in public health, sanitation or roads. This was, in fact, one of the main points raised by the opposition representatives we met.

E.       A growing emphasis on the private sector. The role of women

81.       The wind of change sweeping across Africa has also brought with it greater attention vis-à-vis the potential contribution to be made by the private sector (sometimes referred to as the "unofficial" economy). In fact, it was said, Africans have predominantly been traders and craftsmen, and small- scale industry, so vital to economic development, could easily take hold if given the right stimulus. New political leaders are likely to be less doctrinaire and more pragmatic than their predecessors in this regard. A representative of the World Bank even spoke about a new "entrepreneurial" generation coming to the fore in Africa. It is worthwhile in this context, to point to the contribution which modern technology, in particular satellite television and video, could make to education in remote areas of Africa. Not only reading and writing could be taught in this way, but also ways of creating small- scale businesses, we were told.

82.       The sub-committee enquired about the situation of women in Côte d'Ivoire and in Africa in general. Not only are women responsible for the bulk of African domestic work, including the carrying of goods; but they also perform most of the farming and trading. It would seem that, even though the submission of women forms part of African culture, their emancipation and greater involvement in their countries' affairs are a prerequisite for further development. This is something which our countries must increasingly require in their aid projects.

F.       A staggering debt burden. The need for more, and more efficient,        aid

83.       Côte d'Ivoire's foreign debt amounts to about $US 10 thousand million, a sum higher than the country's annual GNP, and it presents a formidable burden and obstacle to development. Efforts to negotiate partial debt relief or a moratorium with the World Bank and the International Monetary Fund have forced Côte d'Ivoire to undertake a radical, and hurtful, reform programme to be concluded by the mid-1990s. It includes a sharp reduction in the size of the public sector, privatisation of state enterprises, improved legislation especially in the commercial field, and reforms of the agricultural and banking sectors. Thus, a return of GNP growth is foreseen for 1992, rising to an expected 5% per annum by 1995.

84.       However, there is a risk that, for countries in the same situation as Côte d'Ivoire, "the operation succeeds, but the patient dies". The Parliamentary Assembly has repeatedly urged international financial institutions also to consider the effects of painful reform programmes on the poorer parts of the populations. The sub-committee saw much poverty in Côte d'Ivoire (even though there are far poorer countries in the region), and it is highly questionable whether the poorer people can stand additional hardship.

85.       Indeed, poverty is increasing in Sub-Saharan Africa, partly as a result of rapidly swelling populations (3,5-4% annually) and insufficient gains in agricultural production (only 2% per year) or GNPs (about 2,7% annually). At the same time, the environment undergoes constant degradation, in particular through a dramatic decrease in the area covered by forests.

86.       Some might argue that, in this situation, further aid is pointless, since poverty seems to be gaining ground anyway. (Indeed, as was pointed out during our visit, the net capital resources at Africa's disposal have actually declined during the 1980s, in spite of rapidly increasing needs). However, the sub-committee reached the opposite conclusion. We must give more - many members recalled the often stated goal of official development assistance reaching 0,7% of the GNP of donor nations - while at the same time doing more to ensure that what is given is used efficiently and benefits all layers of the population.

G.       The need for closer parliamentary scrutiny of the activities of

      international financial institutions

87.       The Assembly has repeatedly called for greater parliamentary influence over the aid policies of major financial institutions such as the World Bank or the International Monetary Fund. As was pointed out in the introduction, the visit to the African Development Bank and the World Bank headquarters in Abidjan should be seen as a first step in this direction, as indeed it was the very first visit there ever by a European parliamentary delegation! It is highly unsatisfactory that parliaments vote large development assistance budgets, part of which go to international financial institutions, only to find that they have little control over their use afterwards.

88.       The sub-committee demonstrated, through its visit to Abidjan, its intention to work in favour of such closer parliamentary scrutiny. The visit of course did not permit a detailed analysis of all the operations of the World Bank or the African Development Bank. But we were able to learn of the main orientations of these institutions and to impress upon them our own concerns and priorities, and encourage the Côte d'Ivoire government, parliament and opposition to pursue not only economic reform and adjustment but, equally important, parliamentary democracy and human rights. For all these reasons, the visit to Côte d'Ivoire was of great significance.

V.       SUGGESTED CRITERIA FOR DEVELOPMENT ASSISTANCE

89.       On the basis of the preceding, we are now in a position to formulate a number of criteria that should govern development co-operation between Council of Europe member States on the one hand, and developing nations on the other. In mentioning them, however, it should be stressed that a main criterion - the one which in a way supersedes all others - are the absolute needs, the poverty, of the ordinary people in the countries concerned.

90.       A. The human rights criterion:

-       Countries which are democratically oriented, and which respect and try to implement universal human rights should receive generous support;

-       Countries which open themselves up to democracy and human rights should also be supported through projects serving the realisation of these goals, for instance technical assistance in organising elections, institution-building and the encouragement of human rights associations;

-       Dictatorships should not be supported. In countries where the democratic process has been halted, development assistance should in principle be interrupted. In emergency situations, however, humanitarian assistance may still take place;

-       In countries showing shortcomings as regards democracy and human rights, assistance should be made conditional on clear progress in these areas.

      Generally speaking, donor countries should in their assistance promote what has been called "good governance" - that is, the building of institutions and rules which further human rights and democracy, and which create an efficient and accountable administration under the rule of law.

91.       B.       The economic and social reforms criterion:

      Here it is a matter of encouraging economic reforms which create a framework for an efficient, environmentally and socially sustainable market economy. Market competition, price stability, budgetary discipline and realistic exchange rates form essential parts.

      Furthermore, it must be asked whether social reforms are being implemented, for instance as regards the distribution of land, wealth and income.

      Moreover, is the fiscal system being reformed in order to combat corruption and the flight of capital, and to build up a domestic capital market?

      Finally, do governmental policies try to eliminate absolute poverty? What is done to improve the lot of women, establish a social security system, promote health care and education, protect the environment and natural resources, or control excessive population growth?

      All the above considerations should be used to determine whether this second criterion is being met.

92.       C.       The military expenditure criterion:

      Under this criterion, donor nations should ask themselves whether military expenditure appear reasonable given the security situation of the country. Of particular importance is the proportion of military expenditure to the domestic national product, to expenditure for social purposes, to education and public health etc.

-       To what extent is the country's foreign policy oriented toward peace - for instance through participation in regional security arrangements, international disarmament efforts and the renunciation of weapons of mass destruction?

93.       D.       The environment protection criterion:

      Projects that cause environmental destruction or irreversible losses of natural resources should not be supported in future. Instead, those which directly protect the environment should be promoted. Developing countries prepared to involve themselves actively in the protection of their environment should be given added support.

94.       Common to all the above four criteria is the idea that development assistance can only succeed if it encourages structural and political reform, also in the social and the environmental field. Development over the longer term can only succeed if it enhances the human and social potential of a country. The criteria are intended more to stimulate positive developments than to punish negative ones - that is the "carrot" is more important than the "stick", even though both are there. Together these criteria form a flexible instrument to promote development. However, it is important that these criteria be judged together with the degree of poverty of a given country. Thus even if a country loses international economic support because of a lack of progress towards the criteria mentioned, the poor will be the first to lose out. Ways must therefore be found to help the poor, if necessary outside government channels, for instance non-governmental organisations. Otherwise they are "punished" twice - first by a government that does little to help them, and then by an international community which abandons them. This is why your Rapporteurs reiterate the call made in several previous reports, namely for official development assistance by the richer countries to reach 0,7% of their GNP. Resources freed as a result of reduced East-West tension and diminished military outlays should be used for this purpose.

VI.       FOLLOW-UP TO THE EUROPEAN PUBLIC CAMPAIGN ON NORTH-SOUTH INTERDEPENDENCE AND SOLIDARITY

A.       General considerations

95.       Three years after the conclusion of the European Public Campaign on North-South Interdependence and Solidarity, it is worth inquiring about the follow-up given to it. It will be recalled that one of the main objectives of the campaign was to enhance the awareness of the European public as regards North-South issues, and in particular, as regards the fact that the world is one.

96.       True, the Madrid Appeal adopted at the end of the concluding Madrid Conference in June also made a series of specific recommendations as regards world trade, agriculture, environment protection, the debt crisis, development assistance, employment and socio-cultural relations. However, the focus of the Campaign was in essence a moral one, namely to change the mentality of the North.

97.       In the Parliamentary Assembly's Recommendation 1095 (1989), it unanimously "endorsed the aims and proposals of the Madrid Appeal to achieve a fair sharing of the earth's resources, to promote more just social and economic policies, and to make a much more serious and sustained effort to give all persons a real chance for an acceptable and dignified existence free from hunger, oppression and discrimination, and to promote democratic freedoms in the world" and it recommended to governments of member states, through the Committee of Ministers of the Council of Europe, to ensure that these aims be realised in national policy and international co-operation.

98.       In the African city of Porto Novo, Benin, a follow-up conference was held in early autumn 1989 with the participation of the Organisation of African Unity and the Council of Europe. The approximately 150 participants discussed four main themes: environment protection, the movement of refugees and social progress, science and research, and the mobilisation of the economic resources of the countries in question. The Porto Novo Declaration adopted at the end of the Encounter calls for a new solidarity treaty, signifying the end to national egoism and domination, equality between the South and the North and real solidarity among peoples. In the wake of the era of decolonisation, that of solidarity must follow, the meeting concluded.

99.       Another important result of the North-South Campaign was that in many member States of the Council of Europe new forms of co-operation between governments, parliamentarians, non-governmental organisations and regional and local authorities were established, the so-called "quadrilogue". National committees were set up along "quadrilogue" lines. This was so not only at national but also at European level. In September 1989 a "European Consultative Committee for Global Interdependence and Solidarity" was created in Strasbourg, as one of the organs of the "North-South Centre" in Lisbon to be dealt with below. The Consultative Committee sees it as its task to ensure that the Madrid Appeal gives rise to concrete actions and programmes. Another proposal was a Europe-wide "One World Week" to be carried out with the assistance of several television stations in the various member states of the Council of Europe. A first such "Week" was held in May 1990, and another one is foreseen for 1992.

100.       Furthermore, a conference similar to the one held in Benin took place in Santiago de Chile in March 1991. It was a so-called Latin America-Caribbean/Europe Encounter: on the theme "Democracy, Human Rights, Development and Co-operation". The meeting explored the connection between the basic conditions for development and the special needs of Latin American countries. Practical proposals were made as regards measures to help Latin America out of its present difficult situation. Participants agreed that the respect of human rights was an essential condition for lasting social and economic development. Democracy, human rights and development were thus seen as closely dependent on each other, and neglect of any one of them would have serious consequences for the other two.

101.       The Colloquy concentrated on the progress of democracy in Africa, and the need for international co-operation in strengthening it. Again the link between human rights and development was stressed, as was the fulfilment of basic needs of the populations concerned. The Colloquy also stressed the moral duty of industrialised countries to ensure a world-wide economic environment more favourable to democracy, for instance by alleviating the debt burden of developing countries, and improving the access to Northern markets for their exports.

102.       An East-West-South Encounter "The Effects of Europe's Transformation on North-South Co-operation" was organised in Budapest in December 1990. The Encounter focused on the implications of East-West detente on North-South co-operation.

103.       The South understandably fears that the industrialised nations will concentrate their aid and co-operation efforts on Central and Eastern Europe, to the detriment of the South, also in respect of trade and investment. The Encounter wanted to reaffirm Europe's commitment to North-South co-operation, and to underline that aid to Central and Eastern Europe should not come at the cost of assistance to the South. The Encounter also encouraged a "North-East-South" triangular co-operation, permitting the partners to build on the experiences in one area when assisting another.

104.       It is probably too early to carry out an evaluation of the follow-up given by Council of Europe member States to the concrete calls for action contained in Recommendation 1095. However, certain encouraging trends can be noticed. Thus, more and more member states, and the European Community, speak of the need for "sustainable development", that is a long-term development built on respect for the environment and a minimum of social solidarity. In the agreement between the European Community and the ACP countries (African, Caribbean and Pacific) concluded in December 1989, new emphasis was placed on the struggle against environmental destruction and on the need for South-South co-operation. However, it would be too much to talk about a "break-through" in the North-South relations. For instance, the financial aid to be given by the European Development Fund was less than the developing countries concerned, and the European Parliament itself, had expected. Furthermore, forward-looking solutions to the trade and debt problems were largely absent.

105.       On the other hand, there is now a wider recognition of the need for debt relief. During the past two years, there has been a significant expansion in the forgiveness of ODA debt by official bilateral creditors. In 1989, Belgium, France, Germany, the United States and the Netherlands forgave about $ 6 billion in claims held on some low-income countries of sub-Saharan Africa. In 1990, France reduced interest rates for a number of middle-income African countries: Canada forgave ODA-related claims on many Caribbean countries; and the United States extended partial debt relief to countries in the Western Hemisphere. Finally, in October 1991 the United Kingdom announced that it would unilaterally write off 775 million dollars of Third World debt. Countries in sub-Saharan Africa benefitted from official debt cancellations by creditor nations totalling 7,6 thousand million dollars in 1990; in accordance with the so-called "Toronto Terms" agreed on by the "G7" group of major industrial nations in 1988. This is the "carrot" part of the current North-South financial trade-off; the "stick" is the often stringent requirements for economic reform in recipient countries posed by the International Monetary Fund and the World Bank, to which should be added those increasingly voiced in favour of "democratic and human rights" reform.

106.       On the whole, the industrialised world seems not yet willing to take any major measures to overcome the sharp inequalities characterising the North-South relationship, if one excludes occasional debt relief for the poorest developing countries and the conclusion of a much too cautious convention against the depositing of waste in developing countries.

B.       The "European Centre for Global Interdependence and Solidarity"        (the "North-South Centre") in Lisbon

107.       The "European Centre for Global Interdependence and Solidarity" also known as the "North-South Centre", was set up in November 1989 on the initiative of the Portuguese Government and with the strong support of the Parliamentary Assembly. It can be expected to play a special role when it comes to realising the Madrid Appeal. 15 countries - Cyprus, Finland, France, Italy, Liechtenstein, Luxembourg, Malta, the Netherlands, Norway, Portugal, San Marino, Spain, Sweden, Switzerland and Turkey - have already joined the Centre, and Austria and Hungary have announced their intention to do so in the near future. In addition, the European Community helps in financing the Centre's activities and participates closely in its work.

108.       This Council of Europe institution, with its seat in Lisbon, serves as a forum and instrument for European co-operation in enhancing awareness of subjects relating to global interdependence and solidarity, in agreement with the goals and principles of the Council of Europe. It permits the previously mentioned quadrilogue (that is involving governments, parliaments, non-governmental organisations, and local and regional authorities), including contacts between North and South. It works to develop relations with the United Nations family, the OECD and other competent international bodies. It receives and transmits new ideas and proposals for constructive relations, a kind of "think tank" for problems relating to interdependence.

109.       The Sub-Committee "North-South: Europe's Role" visited the Centre at its Lisbon headquarters in November 1991. It came away believing that the Centre should focus on its central, and unique, mission of promoting public awareness in Europe of North-South issues and of counteracting "Euro-egoism", so as to bring about a better climate and a stronger political will for constructive, equitable economic relations. It should in particular build on human rights and democracy, the pillars of the Council of Europe - strengthening the trend toward democracy in the developing world and working toward greater tolerance in Europe.

110.       It also thought that the Centre should avoid duplication of efforts with other institutions and, where appropriate, cooperate with

relevant bodies of the Council of Europe. It should not set up its own development projects, a fact which does not preclude that it may occasionally serve as a launching platform for initiatives to be undertaken by others.

111.       Apart from promoting the above ideals through the media and public events at local, national and international level, the Centre could serve as a catalyst for educational efforts as regards North-South relations. It should also facilitate contacts between non-governmental organisations active in the North-South field, for example by establishing a catalogue of such organisations, and by building up a documentation based on these issues.

112.       The Centre should also reflect on ways in which the structure and decision-making process of the Centre may be improved. This reflection should include the merits of the so-called "quadrilogue" composition of the Centre's bodies (parliamentarians, governments, non-governmental organisations, and local and regional authorities). In addition,

"conditionality" in development co-operation should not be restricted to purely economic considerations, but should be supplemented by the concept of "additionality", which takes into account the preparedness to realise human rights and social justice, protect the environment and cut defence spending;

113.       Finally, the sub-committee welcomed the fact that fifteen member states, as well as the European Community, of the Council of Europe have already joined the Centre, and hoped that all the remaining states would follow suit.

114.       Rome was not built in one day, and the Council of Europe's North-South Campaign was only the beginning of a long process to reform North-South relations. Now that the East-West conflict is over, we can concentrate all our resources on the real problems of this world: climate change, the environmental destruction, the growing poverty in the Third World, human rights violations and the lack of democracy. The North-South conflict becomes our central challenge.

115.       Of course, we must free money, machines and technological know-how for the reformist countries in Central and Eastern Europe. However, it would be wrong for this reason to forget about the Third World and the efforts to create an equitable North-South relationship. The rich countries of Western Europe have a special duty to close this gap. With the end of East-West hostility, the North (including the East) and the South must find a way toward economic and social equality.

APPENDIX I: Human Development Index as proposed by the United Nations

Development Programme (UNDP; Source: Human Development Report 1991)

APPENDIX II: Trends in Human Development as proposed by the United Nations Development Programme (UNDP; Source: Human Development Report 1991)

Reporting committee: Committee on Economic Affairs and Development.

Budgetary implications for the Assembly: None.

Reference to committee: Recommendation 1095 (1989).

Draft resolutions: Unanimously adopted by the committee on 25 March 1992.

Members of the committee: MM Valleix (Chairman), Flückiger, Svensson (Vice-Chairmen), Aarts, Aylward (Alternate: O'Brien), Gudmundur Bjarnason, Mrs Bohlin, MM Brach, Capanna, Croze, Demiralp, Efraimoglou, Ewing (Alternate: Lord Kirkhill) MM Fabra, Dame Peggy Fenner, MM Frendo, Gandalovic, Garcia Sanchez, Gasperoni, Gassner, Gemesi, Goerens, Holtz, Jessel, Kempinaire, Kiliç, Kittelmann, Albrecht Konecny, Koritzinsky, Kovacs, Le Grand, Lewandowski, Lotz, Mesoraca, Miville, Pinto, Rehn (Alternate: Särkijärvi), Rodrigues, Rokofyllos, Schwimmer, Sinesio, Erik Smith, Mrs von Teichman, Mrs Verspaget, Mr Wintgens.

NB: The names of those members who were present at the meeting are underlined.

Secretary to the committee: Mr Torbiörn.


1 1       The organisers of these encounters are the Parliamentary Assembly of the Council of Europe (the "Twenty-Six", plus the Central and East European countries enjoying special guest status), the European Parliament (the "Twelve") and the parliaments of the five OECD countries not belonging to the Council of Europe: Australia, Canada, Japan, New Zealand and the United States.