Joint Assembly in Gabon

Lomartnership goes under the microscope again

For the third time in succession, the future of cooperation under the Lomonvention has taken centre stage in the deliberations of the ACP-EU Joint Assembly. With the LomV 'mid-term review' negotiations now formally under way, the Assembly, meeting in Libreville from 3 6 October, had what was probably its last opportunity to influence the outcome of the talks. With this in mind and following a lengthy debate, it adopted a comprehensive resolution on the subject which will be transmitted to all interested ACP, EU and joint institutions.

An indication of the importance which the Assembly attaches to the midterm review came during the formal opening session, in the addresses of the two co-Presidents.

From the European side, Lord Plumb (EPP-UK) expressed the hope that the report and recommendations the Assembly would go on to adopt would 'enable a new impetus to be injected into the current negotiations.' These, he said, were 'not proceeding as well as we would like.' He argued in particular that it was essential to maintain 'the fundamental principles of partnership and dialogue', insisting that these provided the 'foundations for the trust which exists between us.' He then went on to commend the Joint Assembly as the only institution in the ACP-EU system 'which can legitimately claim to be democratic.' His decision to emphasise this point was presumably not unrelated to the fact that there is a proposal on the table that scheduled meetings of the Joint Assembly be held once, rather than twice a year in future. He also spoke approvingly of plans to strengthen the commitment to democratic values in the revised Convention.

For his part, Dr Marcel-Eloi Chambrier (Gabon), the ACP Co-President, did not seek to 'pull his punches'. Cooperation with the EU went back a long way, he observed, and there had been many projects, conceptual parameters, promises, ideologies and so-called development policies. 'Today,' he continued, 'we note, with some bitterness, that none of these policies have succeeded.' He had some sharp criticisms of both sides in the development partnership, referring to 'tine economic and social lethargy of our countries' and the 'ruthless dumping' of agricultural products by the developed world. On the Lomonvention, he struck a more positive note, emphasising the reference in Article 5 to a people-centred approach and calling for greater stress to be laid on regional cooperation. Mr Chambrier was unhappy with the idea of reducing the frequency of Joint Assembly sessions, suggesting that this was a 'trend away from democracy' and was keen to stress the commitment on the ACP side to the principles of democracy, human rights and the rule of law.

In the actual debate on the LomV review, which took place later in the session, the focus was, not unnaturally, on those areas of the Convention which may be affected by the mid-term negotiations that are taking place. Five key themes, enumerated by the Rapporteur, John Corrie (EPP-UK), cropped up time and again in the discussion, which featured no fewer than 30 speakers. These were:

- the trade aspects,
- democracy and human rights,
- programming and procedures,
- the role of the Joint Assembly,
and,
- finance.

Trade

The trade aspects of the ACP-EU relationship are seen as a key area for the ACP side in the negotiations and this was reflected at the outset when the Chairman of the Working Group, Alain Yoda Bedouma of Burkina Faso, made his introductory presentation. He expressed surprise that, 'at a time when everybody is talking about trade liberalisation', more attention was not apparently being paid to this issue by the European negotiators.

There appear to have been two distinct elements to the discussion when the subject of trade was raised. On the one hand, there was general acknowledgement of the weakness of ACP (and particularly African) exports to the European Union, notwithstanding the preferential terms available for many years under successive Lomonventions. Various ideas aimed at improving ACP efficiency and competitiveness were mooted, reflecting a widely-held view that this was the key reason for these countries' declining share of world trade. But there were also suggestions that more could be done on the European side to facilitate access to its markets, for example, by 'Liberalising' the rules of origin. Echoing the earlier remarks of Mr Chambrier, the Zambian representative raised a sensitive issue which may well have struck one or two raw nerves. 'What is the point of developing grain projects,' he asked, 'if local production is being undercut by imports of subsidised EU wheat?' He went on to allege that such imports were entering his country, 'thinly disguised' as having an ACP origin.

The second 'trade' aspect raised by a number of members related to the impact of the new GATT arrangements. The Solomon Islands representative expressed concern in general terms about the erosion of preferences and this was taken a stage further by Paul Lannoye (Greens-B) and Dominique Souchet (EN-F) both of whom argued that the effect of the new world trade regime was to rob the Lomrade provisions of any substance. This extreme interpretation may not have been widely shared in the Assembly but there was no dispute about the fact that the trade advantages were gradually being whittled away. Speaking for the Commission, Director-General Peter Pooley gave a clear exposf how this was happening, pointing out that it was not because of any change in the ACP-EU relationship but because of the lowering of protective barriers at the global level. The reality, of course, is that this process has considerable momentum behind it and it is difficult to see how it could be stopped, even if such a course of action were desirable (which many would dispute).

The ACPs must, therefore, learn to run with the wind rather than trying to tack against it. This approach appeared to underpin the remarks of Mr Pooley and of Vice-President Mar(n, (who dealt with the point earlier during 'Question Time'). Both reiterated the need to raise ACP competitiveness. Mr Pooley also spoke of the importance of 'changing mindsets' and persuading ACP countries to look beyond the traditional bilateral link with the EU towards trading opportunities with third countries - opportunities which the latest GATT round should actually enhance.

In the resolution which was subsequently adopted, the following four measures were proposed with a view to improving ACP access to the EU market: - a deepening of preferences, in particular for those products considered too sensitive to be subject to generalised liberalisation;

- the elimination or reduction of non-tariff barriers such as quotas, particularly for agricultural products;

- the removal of internal taxes which have been excluded from harmonisation in the EC single market in the case of tropical beverages, and;

- assistance to ACP States in creating suitable trading structures with adequate quality control standards in order to enable them to compete in the Single Market.

The resolution also called for a relaxation of the terms of the rules of origin which, it was claimed, often hamper the development of trade diversification opportunities.

An amendment from the Green group demanding that the GATT treaty should not be ratified, and a less radical proposal from the Europe of Nations members favouring a delay until the effects of the agreement had been evaluated, were both rejected by the Assembly. As a result, the two groups decided to abstain in the final vote.

The Assembly did, however, agree to an amendment tabled by Jean-Francois Hory (F) and Allan Macartney (UK) of the European Radical Alliance 'deploring the fact that the concerns of the developing countries were insufficiently taken into account' in the GATT negotiations (point 60 of the resolution).

Democracy and human rights

Turning to the linked issues of democracy and human rights, there appears to be broad acceptance on both sides that these concepts are part of the development equation and are therefore legitimate elements in the dialogue about cooperation. Clearly, attitudes to this have changed markedly over the life of the four Lomonventions but there are still concerns about the way in which any new provisions introduced for the second half of LomV might be applied in practice. The rapporteur, Mr Corrie, was the first to raise such concerns when he referred to the proposed clause allowing for suspension of cooperation where human rights or democratic principles had been infringed. In this regard, he insisted on consistency on the EU side, referring pointedly to the Union's relations with China which, purportedly, did not involve the same keen attention to such issues. Michael McGowan (PES-UK) chose to focus on the 'myth that human rights abuses only take place in ACP countries' and suggested that the subject, together with criticisms about a lack of democracy, were often raised as a pretext when the real problem lay in a lack of funding. He also suggested that his ACP colleagues 'should be given an opportunity to observe elections in the European Union.' The speaker from the Central African Republic stressed the positive progress that had been made on the democray front over the life of the Lomonventions while the representative of Papua New Guinea saw human rights in particular as one of the 'vital elements' in the development process. For Jan Bertens (ELDR-NI), however, the wording of the human rights provisions in the draft resolution under discussion did not go far enough. Indeed, it was this factor that ultimately swung both Mr Bertens and his Liberal Group colleague Yves Galland (F) against the resolution when the vote was taken later in the session.

The final resolution included a recognition 'that there is no established model of democracy' (point 14), a demand for the establishment of 'clear and transparent provisions' before any decision is made to suspend cooperation on human rights or democracy grounds (point 16), and a call that any such decision should be accompanied by 'positive actions aimed at promoting the restoration of democracy and respect for human rights in the country concerned' (point 18).

Programming and procedures

The view that implementation of the Lomonvention is hampered by bureaucracy - on both the European and the ACP side - was aired once again at the Joint Assembly. In a question to the Commission, the representative of Chad focused on the low level of disbursements in most ACP countries and, in his reply, Commissioner Marin pledged that practical efforts would be made to speed up methods of payment. John Corrie also emphasised this subject in his presentation during the main debate, urging that a special effort should be made to target countries with low implementation rates. The strongest criticism, however, came from Maartje Van Putten (PES-NI) who attacked EU 'red tape' in particular. She argued that training centres needed to be set up in ACP countries to publicise the opportunities available under the Convention and provide practical guidance on the procedures to be followed. She also put in a plea for training manuals to be issued to help facilitate implementation.

The concerns expressed on previous occasions about an alteration in the balance of responsibilities between the Commission and the ACP country authorities were much more muted this time. However, Mr Sotutu from Fiji did seek a reassurance from the Commission that 'the failure of a handful of ACP States should not be used as a pretext for punishing the rest' - presumably a reference to the proposals on programming which the European negotiators argue are necessary to make the system more responsive.

On the specific proposal to introduce a two-tranche system in place of the current five-year indicative programme to which a fixed sum is allocated, the European negotiating position was supported by Jan Bertens of the Liberal Group.

The representatives of both the Council and the Commission argued strongly in favour of the proposed change to the programming arrangements. For the former, the German Minister Ursula Seiler-Albring rejected the suggestion that the aim was to concentrate decision-making at the centre. The real purpose, she insisted, was to improve the workings of the Convention by making the system more flexible. This view was echoed by Peter Pooley, who said that the present arrangement - with its five-year plans - 'harked back to the Marxist-Leninist approach'. He also pointed out that there was a need for a trade-off in this area. The flexibility that was essential could not be achieved 'while maintaining the certainty of the existing system.'

In the final resolution, the Joint Assembly chose a nuanced approach suggesting a concern about the possible implications of changes in implementation rather than outright opposition to such changes. It emphasised the better use of existing instruments as opposed to the adoption of new ones (point 22) and spoke of the need for practical measures to improve the whole process from contract awarding to conflict resolution (point 23). Perhaps most significantly, it maintained 'that an overhaul of the NIP concept as a whole is unnecessary and disruptive.' Those responsible for negotiating on the European side would presumably argue that there is no conflict here since the NIP concept has been maintained and the 'tranche' idea is merely a practical adjustment designed to make the system more efficient - and hence to comply with the Assembly's demand for a more speedy utilisation of resources.

The role of the Joint Assembly

While nuanced criticism may have been the order of the day as far as the programming and other aspects of the Lomeview were concerned, the EU proposal to reduce the regular sessions of the Joint Assembly from two to one each year drew outright and near unanimous opposition from the members who spoke on the issue. The scene was set at the outset by the two Co-Presidents whose concerns were mentioned earlier in this article. John Corrie then relayed the views of the Working Group in 'totally rejecting' the idea of just one meeting annually. The speaker from the Central African Republic, expressed the same sentiment, although the length of his speech (which far exceeded the five minutes notionally allowed to him) suggested that he might have been happier for the Assembly to meet in permanent session! The only dissenting voice, and even then, only partly, came from Terence Wynne, who has a particular interest in the budgetary aspects. He suggested that the Assembly should ask itself why it met and whether it was giving 'value for money'. He was also critical of turnout on the European side, and of attendance while debates were taking place. The strength of this latter argument must be open to question, however. To an outside observer, attendance at the Joint Assembly would appear to compare very favourably with that of other Parliamentary bodies, including the plenary sessions of the EP itself.

The view that ACP representatives should all be parliamentarians, by contrast, seemed to be supported in principle by most of those who mentioned it although Dominique Souchet (EN-F), citing financial reasons, argued for the maintenance of the status quo until all ACP countries were in a position to send elected members.

Replying to these points, Peter Pooley said that the aim was to improve the role of the Joint Assembly. He argued that it was difficult to undertake the appropriate preparatory work for two sessions a year, and it was unrealistic to expect members to set aside a full month, given all their other responsibilities. He also cited the cost aspect, noting that resources were limited. Despite his eloquence in defending the 'one session a year' proposal (which would not preclude the holding of 'extraordinary' meetings when the occasion demands), the Assembly voted to reject the idea (point 77 of the resolution). The resolution made no recommendation on limiting membership to elected members but it did call for 'en examination of an increased legislative role for the Joint Assembly'. Given the present stage of institutional development, this is probably an unrealistic demand, but even if it were feasible, it is difficult to imagine it happening so long as votes on the ACP side are being cast by ambassadors.

Finance

For those who have been following the Assembly's debates on the LomV review since the outset, a curious feature has been the almost monastic silence about the one thing that must be decided in the negotiations, namely the financing for the second phase of the Convention. The current financial protocol makes the sum of ECU 12 billion available under the various 'budget' headings (EDF, Stabex, Sysmin, Structural Adjustment, EIB etc.) with each EU Member State contributing an agreed percentage share of the total.

Will the resources go up or down in comparison with this figure? If there is an increase, will this be in real terms or merely nominal, to take account of inflation? What effect will the enlargement of the EU have on the final numbers? These are all questions which must be in the minds of Joint Assembly members, but until recently there was little point in raising them. The EU countries have to reach agreement among themselves on this highly sensitive area and even if such an agreement had been concluded at an early stage (which appears not to have been the case), it is hardly likely that the information would be made public while the negotiations are still under way. Similarly, to pick figures out of the blue and present them to the Member States as recommendations would be an exercise of doubtful utility. And so, until recently, discussions at the Joint Assembly about the 'bottom line' were confined to the corridors. In Libreville, this changed, although there still appears to have been a reluctance to talk about specific amounts. With the negotiations now under way - and the possibility that everything will be wrapped up before the Assembly next meets - rapporteur John Corrie spoke of his 'greet concern' about the issue. He said that although the decision on financing would not be made until January 1995, early indications from a number of Member States indicated 'bleak prospects' for the ACPs. He singled out three countries in particular that were allegedly aiming to reduce the size of their contributions. Since individual Member States have no official representation at the Assembly (the President in Office is obliged to speak for the Council of Ministers as an institution), there was no-one there to confirm or rebut this claim. Mr Corrie also implied that the funding issue was not unrelated to the Member States' push for other changes to the Convention, suggesting that 'this is not democracy but a dictat'. For the Commission, Peter Pooley was particularly anxious to reassure the rapporteur on this point. 'There is no question of a dicta",' he insisted. 'A settlement made on this basis could not endure. Indeed, we are not professionally capable of working on a mandate designed to ruin the Lomonvention - it is the core of our work.' It is worth recalling here that the negotiations are handled by the Commission although the negotiating mandate is set by the Council.

Mr Corrie, when he replied to the debate, appeared somewhat reassured by the 'transparency' of the Commission but the Assembly, nonetheless, went on to agree a text which laid strong emphasis on the need for resource increases to 'take full cognisance of the magnitude of the needs facing the ACP States' (point 84).

Dissenting voices

When it came to the vote, the Corrie Resolution was agreed without significant amendment. Consensus was not achieved on the European side, however, with Liberal members voting against and members of both the Green and Europe of Nations groups abstaining for reasons enumerated earlier. Unless the mid-term negotiations become completely bogged down this is likely to be the Joint Assembly's last bite at this particular cherry, although the Bureau did agree to maintain a watching brief on the talks. Doubtless the Assembly will have more to say on the subject, ex post facto, once it is in a position to judge how far it was able to influence the process.

Simon Homer

Adjustment and development: the experience of the ACP States

by Patrick Guillaumont and Sylviane Guillaumont-Jeanneney

Do 15 years of adjustment mean a return to development? That is the vital question posed by the authors of this article who have coordinated a survey (to be published in book form), at *e request of *e European Community, on 'Adjustment and development: the experience of ACP countries'

The book reviews the present state of structural adjustment in all the ACP States, Four features stand out: it is a European survey; it is based on a comparative method which is innovative in several respects; it provides an overall interpretation of developments without complacency or disparagement; and it concludes with several economic policy recommendations.

A European survey

The study is a European survey in several respects. Firstly, the book is based on research carried out at the request of the European Commission and in close cooperation with it, especially with the Support for Structural Adjustment and Planning Division, Directorate-General for Development.

Secondly, the research was conducted by a European team based at CERDI, University of the Auvergne, and work with Oxford and Brescia Universities. This team is at the heart of a European network of economic research into development.

The survey is also primarily European in spirit. It steers clear of inappropriate simplifications and the assessment is finely tuned. Confidence in market forces does not stop the authors looking at the most appropriate means of government intervention. Recognition of the need for flexibility, which is at the heart of structural adjustment, is paralleled by an interest in a degree of stability, including that of relative prices.

And the survey is European in the sense of the geographical area it covers, that of the ACP States which have signed the Lomonventions with the European Community.

A relative method

There are many assessments of adjustment policies, like this one, covering a wide sample of developing countries. Apart from the territory it covers, the ACP States, this assessment has several characteristics which, in combination, give it its specific nature.

It is, firstly, a 'comparative' assessment, not only because it considers the countries in relation to one another, which is the distinctive feature of a cross-sector analysis, but also primarily because the attempt is constantly made to assess the policies against the environment in which they have been implemented, i.e. the conditions at the outset and the impact of exogenous, external or internal factors.

Next, it is an assessment of policies rather than of the programmes adopted in agreement with the IMF or the World Bank. The effect of these programmes in fact merges into that of the accompanying external resources and in the end it is the nature of the economic policies implemented which is important.

Thirdly, the assessment is set out in stages in the sense that the following are analysed in turn:

- the economic policy instruments used;

- the impact of the use of these instruments on 'intermediate variables' of economic policy in the main areas of adjustment, i.e. the control of aggregate demand, the correction of relative price distortions and the allocation of resources;

- the effects of shifts in these variables in terms of achieving the major objectives of adjustment, in other words narrowing the external trade gap and recovery in growth;

- the implications of the previous trends for poverty and political stability.

Fourthly, the authors have tried to give a 'transparent' assessment. Not only, of course, are the sources of the information used indicated and where appropriate discussed, but the statistical methods and econometric models are systematically set out: the significance of the differences between sub-sets is tested, the theories underlying the models are discussed, and so on. In short, although the assessment is at times technical, it is never, it is hoped, technocratic.

Lastly, the assessment as presented has a permanency about it. By establishing a base of economic policy indicators and their effects in the ACP States, it is in fact self-perpetuating. CERDI is currently updating this base and expects to produce a first supplementary report before the end of 1994. The name given to it is a piece of invented Latin or an English acronym which expresses its dynamic nature: PRODEM, Policy Reform for Development: European Monitoring.

A comprehensive interpretation

At the start of the 1980s, economic conditions on average were less favourable in the ACP States than in the other developing countries. Growth was significantly slower and their current account deficit higher, while their competitiveness in relation to the outside world was adversely affected by the appreciation in the real value of their currencies. As a result, the adjustment policy reform was essential for the majority of ACP States.

The results achieved by the ACP States from 1980 to 1989 seem disappointing when set against the targets set for adjustment policies, i.e. restoring the macroeconomic balances, creating a recovery in growth and relieving poverty. Growth remained slow, sometimes negative, the reduction in imbalances was temporary and poverty persisted. But for all that, if, we look at the economic policy indicators - the intermediate variables mentioned above - it can be seen that the ACP States have in fact put the adjustment policies into practice - to more or less the same extent as many other developing countries.

At the start of the decade, the need for adjustment and, still more, recourse to a strategy based on market mechanisms and openness to the rest of the world, met with a certain hostility in many ACP States. This hostility gradually diminished, but this did not end the debate on adjustment: it shifted from the objectif (making the economies more competitive) to the instruments and their effectiveness.

It is true, of course that the history and macroeconomic development of each country merit a proper explanation. Accumulating of case studies was not the purpose of the research undertaken. But on the basis of the cross-sector or comparative statistical analysis and the various authors' in some cases long and in-depth experience of the economic policy reforms in a certain number of ACP States, it was possible to put forward an overall interpretation of the reasons why adjustment has been a disappointing experience in the ACP States.

This interpretation is an attempt to answer four questions. The first question is whether the apparently mediocre results accurately reflect what happened. It is maintained that growth was partly underestimated, on account of the growing proportion of economic activity carried out by the informal sector in many ACP States and the insufficient account taken of this: on the whole, the adjustment was partly informal.

Although, however, the results are still mediocre, which is acknowledged, the question arises as to whether this is due to the environment or to economic policy. Analysis shows that the adverse effect of the environment, especially the terms of trade and the start-up conditions, is a vital factor in the explanation. In short, adjustment was 'thwarted'.

Nevertheless, it is not argued that economic policy was in no way to blame for the mediocre results. The question is whether the policy was badly deigned. The book shows that the use the ACP States made of the various economic policy instruments gave too high a priority firstly to macroeconomic stabilisation as opposed to correcting price distortions (especially in the use made of fiscal policy and devaluation), then to the correction of price distortions at the expense of the quest for productivity increases - in a nutshell, to the short term over the long term. The consequences of this choice are especially serious in low-income countries, which the vast majority of ACP States are. In a word, the adjustment was shortsighted.

Adjustment policy should therefore, in future, assign greater importance to long-term objectives. Endeavours should be made to balance the budget by reforming the role of the public sector, reducing it to its essential functions. This usually means cutting down the civil service workforce, rather than cutting the pay of increasingly demotivated civil servants.

This would allow one to avoid imposing taxes or similar levies at the expense of activities which generate growth and to increase public expenditure on human resources and public investment in infrastructure.

But the policy has not always been badly designed. Where it was well deigned, the question is how far it was actually applied. The survey examines the possible reasons for hesitation on the part of officials with regard to 'good policies' and the way in which 'false pretences' developed in relations between lenders and the officials responsible for economic policy in the ACP States: countries would pretend to agree to the proposed reforms with no intention of carrying them out, as they had not 'internalised' them; lenders pretended to believe that they had in fact been carried out, in the teeth of the evidence, simply so that they could claim that their own action had had some effect. In short, the practice of granting aid to reform economic policies on certain conditions meant that adjustment became 'borrowed adjustment' in several respects.

Having thus diagnosed adjustment as non-formal, thwarted, shortsighted and borrowed, the authors go on to set out a number of recommendations for reforming adjustment aid, leaving aside those which relate to programme guidelines.

Towards a reform of conditionality

The crisis in conditionality lies largely in a mutual loss of confidence between the developing countries and the donors and lenders, and this is why it is difficult to overcome. Suggestions for reforming it set out to avoid false pretences and ensure that adjustment programmes really are the concern of the countries themselves.

The conditions attached to adjustment aid should be less rigid and more demanding than at present. They should no longer be based on specific measures, such as devaluation, raising the prices of certain goods, or changes in particular categories of tax revenue or public expenditure. Adjustment aid should go hand in hand with an economic policy programme defined by the country. The amount given should be reviewed each year depending on the policy actually followed and the aggregate results achieved as assessed ex post by the donors and lenders.

Attaching conditions to a programme in this way would mean that adjustment aid (or counterpart funds) would no longer be allocated to any particular item of expenditure. Allocating aid in this way, which at the moment is clearly just a stopgap, for want of any better approach to conditionality, is a sign of distrust in the ability of the states to carry out the fiscal policy they have defined and it creates rigidity in the expenditure structure, which makes it difficult to adapt it to developments in the economic situation.

This new pattern of conditionality would obviate abrupt breaks between the ACP Stat" and the international community (or the policy of all or nothing) which in past years were a source of macroeconomic instability in the ACP countries. It would be consistent with the desire of the international community to see the ACP States becoming more democratic. It is in fact extraordinary that in countries which are busy equipping themselves with democratic institutions, almost every aspect of economic policy is decided through negotiations with the representatives of international institutions and bilateral donors and lenders. The democratisation of these countries only enhances the need to internalise their adjustment policies.

P.G. and S. G.-J.

Rwanda: the new European commitment

International Conference in the Hague

The 'International Conference on Rwanda in its regional context', held on 16 and 17 September in The Hague (Netherlands), was the first high level meeting on this country since the start of the most recent crisis. In the unfolding tragedy that is Rwanda, unspeakable horrors have been visited upon the population and continue to be experienced by those who become refugees. The trauma of having loved ones snatched away, or daily staring death in the face, mingles with the fear of reprisals which is felt by the guilty and innocent alike.

Organised by the North-South Centre (Lisbon, Portugal) and the National Committee for Development Education (Amsterdam, The Netherlands), under the patronage of the Council of Europe and the Organisation of African Unity (OAU), the Conference brought together politicians, NGO representatives, researchers and witnesses to the tragedy. The person whose arrival was most eagerly awaited was the new President of Rwanda, on his first visit abroad.

Following the initial 'paralysis' induced by the revelations about events in Rwanda, there was a need to pick up the threads quickly. The events were so harrowing to all who witnessed them, whether close at hand or from a safe distance, that many must have wondered how they would have reacted if they had been caught up on one or other side (if indeed, there are only two sides). Above all, why had such a terrible situation arisen?

The fact that the Hague Conference was organised by two study centres from countries which have never been involved in the history of Rwanda (Portugal and The Netherlands) helped to give the event the stamp of neutrality which was essential to its effective functioning. During the initial plenary session, speeches were delivered by Rwandan President, Pasteur Bizimungu (who was accompanied by three of his government ministers), as well as by ministers of the former government which has been accused of involvement in the tragic events. A representative of the Twa community, know as the Pygmies of Rwanda, who are very much in the minority compared to the Hutu and Tutsi, was also present. In his speech, he demanded protection for the Twa people, stressing the fact that his community had suffered most in the massacres of spring 1994 (20 000 out of a total Twa population of 29 000 are thought to have perished).

In addition to hearing from prominent Rwandans, the conference was addressed by the Dutch Foreign Minister (Hans Van Mierlo), who opened the session, his ministerial colleague in charge of cooperation and development (Jan Pronk), the Secretary-General of the Council of Europe (Daniel Raschys), the Foreign Minister of Tunisia (Habib Ben Yahia) on behalf of the President-in-offfice of the OAU, the President of Tunisia (Zinc El Abidine Ben Ali), the Director-General responsible for international relations at the European Commission (Ivo Dubois), the Deputy Secretary-General of the United Nations who heads the Economic Commission for Africa (Layashi Yaker) and many other prominent people.

The plenary session was followed by three workshops on the following subjects:

- Building confidence and working towards reconciliation in Rwanda: democracy and the protection of the rights of the individual;
- Rehabilitation strategy and preventive diplomacy in a regional context;
- Images of Africa: public awareness, education and information.

As well as the prominent people already mentioned, members of European and African governments and representatives of many international bodies, including the United Nations, the Red Cross, the EU institutions and non-governmental organisations, also participated in the working sessions.

For a new Europe-Africa partnership

The resolutions, drawn up on the basis of the workshops and the forum of governments and NGOs held at the end of the Conference, took the form of an appeal in favour of continuous support from the international community for the Rwandan refugees and displaced persons within the country, on the one hand, and the effective establishment of an international tribunal to bring to trial the perpetrators of what the participants consider to be a planned genocide, on the other. To do this, the final press release considers the organisation of an international conference of the United Nations, the OAU, inter-governmental organisations and NGOs on humanitarian aid to be a matter of urgency. It invites these bodies to support the efforts of the new Rwandan government to forestall acts of vengeance and reprisals, and also to provide appropriate aid for the rehabilitation of the country, stressing the special needs, such as 'professionalisation' of the local press, to prevent excesses similar to those of the former Radio des Milles Collines, accused of having encouraged the massacres. In exchange for this support, the new leaders of the country should undertake to respect the principles of democracy, human rights and those of the press, and to promote reconciliation and dialogue. To ensure lasting peace, the Conference also calls for financial and material aid for Rwanda and its neighbouring countries and the establishment of a 'long-term observatory' to forestall conflicts, together with limitation and transparent control of arms supplies to the countries of the region. And, to conclude, the Conference urges strengthening of the structures of the OAU, especially the African Commission on Human Rights and the Rights of Peoples, and the creation of an African Court to ensure respect for these rights. This appeal to the international community is addressed more specifically to the European Union, the Council of Europe and the OAU, in respect of the urgent definition of a true partnership between Europe and Africa, based on equity and aiming for lasting socio-economic development.

European Commission, supportive, but cautious

Already, prior to the Conference of The Hague, one of the European institutions, the European Parliament, had taken the initiative of sending an important mission to Rwanda, from 21 to 31 July, led by Lord Plumb, Co-President of the ACP-EU Joint Assembly. On their return, its members presented their preliminary confusions to the Council of the European Union. They recommended recognition by the countries of the Union of the new Rwandan government and called for significant Community aid in many fields, such as technical assistance for the judicial system, government administration, the banking system and the police force. They also requested significant aid for rehabilitation of infrastructures, as well as medical assistance and food aid, for both the refugees outside the country and the local population. They advised that the European Community Humanitarian Office (ECHO) should be sent to the spot as a matter of urgency to coordinate the activity of NGOs. These recommendations by participants in the mission were taken up in the form of a resolution, on 15 September, the eve of the International Conference on Rwanda, by the Parliament meeting in plenary session in Brussels.

The European Parliament mission was followed by another by the 'troika' (the three Ministers for Foreign Affairs, of the country holding the rotating presidency of the European Union, the country preceding it and the country which is to take the next turn) from 28 August to 3 September to Rwanda and neighbouring countries.

Following this mission, the European Commission decided to grant humanitarian aid of ECU 5 million to Rwanda, which is to be used primarily in the electricity and water distribution sector. ECHO has already allocated ECU 200 million to the victims of the Rwandan and Burundian crisis since October 1993, to which are added ECU 60 million in food aid. The European Commission is currently examining a plan for ECU 100 million for a programme to rehabilitate the Rwandan economy. It also declares itself to be ready, in liaison with the Member Stat" of the Union, to give assistance in setting up an International Tribunal to judge the serious crimes committed in the spring of 1994.

But the promises made by the European Commission representative in The Hague were made on the basis of the 'good democratic intentions' shown by the new Rwandan government. He specified that this 'consideration is not exclusive of a certain vigilance as to the legal guarantees offered to the population'. There are worrying reports, drawn up recently by human rights organisations, of bloody revenge perpetrated by partisans of the new Rwandan regime. It is true that these are not believed to be on anything like the same scale as the earlier mass killings, but the international solidarity from which the new regime benefits could well be undermined, if it does not manage to control the situation and keep to its promises. On the other hand, the claims of people close to the former government about the formation of a guerilla movement aimed at destabilising the Kigali authorities, strengthen the argument of delegates to the Hague Conference concerning the urgency of involvement by the international community in order to avoid a repeat of the horror.

Hl Goutier

Collaboration between banks in Portuguese-speaking countries

by Dr Luis Ritto

In December 1990, a group of savings and development banks from the world's Portuguese-speaking countries and territories (including Angola, Mozambique, Cape Verde, Guinea-Bissau, STomamp; Principe and Portugal) founded the 'Grupo de Coopera de Lingua Portuguesa' (GCLP). The objective of the association is to encourage collaboration among the institutions concerned, with a focus, among other things, on helping the African banks to reform their financial systems in accordance with modem international standards of operation, and to adapt to prevailing market conditions.

This initiative has resulted in a number of specific actions in favour of African savings banks, carried out under the aegis of Portugal's largest savings and credit institution, the Caixa Geral de Depositos. Thus, for example, 40 head-office and branch managers of the Banco Popular de Desenvolvimento de Mobique are undergoing a training programme which began in 1991 and is due to be completed at the end of this year. The final stage will be a course in Lisbon for the 'top ten' managers identified on the programme. The Caixa Economica de Cabo Verde has also received technical and training assistance including considerable legal support and help in diversifying the range of financial products available, while the Caixa Popular de Sao Tomamp; Principe has benefited from a training programme as well as technical assistance in modernising its statutes and services.

In addition to these main programmes, a number of other projects have been developed by Portuguese savings banks in Angola and Guinea-Bissau. These cover such diverse fields as institutional reform, legal and training assistance and the design of financial instruments for the private sector (especially geared to small and medium-sized enterprises).

At a general meeting of all GCLP institutions held in Lisbon in May, the African banks praised the 'tailor-made' assistance they had received from their Portuguese counterparts. They also stressed a desire for the example to be followed by other EU Member Stat=. There is a distinct shortage of banks operating efficiently in sub-Saharan Africa, especially when it comes to attracting the savings of ordinary people for on-lending to investment (as opposed to commercial) schemes. The support of the Portuguese institutions was recognised as a step in the right direction which could help African banks to become more efficient and better oriented towards the development needs of their local communities and countries.

The Lisbon meeting was attended by the author of this article (from the European Commission) and by a representative of the World Bank. The idea behind this was for participants to learn about the projects that these two organisations are developing in Africa and to examine the possibilities offered by the Commission and the Bank in helping financial institutions in Portuguese-speaking Africa to obtain technical assistance and credit lines for private-sector-oriented projects.

In fact, the African members of the GCLP have already recognised the importance of private-sector promotion for the sustainable development of their countries and they are keen to take the lead in providing support for the productive sectors of their economies. To do this, however, they need technical and financial assistance from the EU and the World Bank. A point of particular concern that arose during the discussions was the view that the EC's 'PALOP' Regional Programme' does not fully take account of their needs. In addition, at this stage the indicative programmes of most countries under LomV's first financial protocol are almost fully utilised, obliging them, until new indicative programmes are approved, to look for alternative sources of funding.

On the latter subject, the GCLP members decided to continue their discussions with the European Commission and other international donors. For this purpose, new meetings of the GCLP group with the European Commission were set up for Cape Verde in September 1994 and Angola in January 1995. The hope is that, in the meantime, the different governments of Portuguese-speaking Africa will have been sensitised to the needs of their banking and private sectors and that this will be reflected in the forthcoming PALOP regional and country programmes, to be negotiated with the European Commission during 1995.

L.R.

An interview with OECS Director-General, Dr Vaughan Lewis

The OECS: making 'small is beautiful' come true

Ask any politician in the smaller Caribbean island states what is the most effective regional organisation and you will discover that, without hesitation, they all mention the OECS. The Organisation of Eastern Caribbean States certainly seems to live up to Schumadher's famous adage that 'small is beautiful'. Set up under the 1981 Treaty of Basseterre, its membership today consists of eight small island states and territories - Antigua & Barbuda, the British Virgin Islands, Dominica, Grenada, Montserrat, St Kitts & Nevis, St Lucia and St Vincent & the Grenadines. Over the past 13 years it has succeeded in forming a solid and active sub region within the wider Caribbean. Dr Lewis from St Lucia has been the widely respected Director-General of this body since 1982. In an interview with The Courier at his headquarters near Castries, he puts into perspective the many challenges which have suddenly emerged to confront the OECS Member States. Political union may be off the agenda for the time being but, in his view, enhanced domestic harmonisation, going hand in hand with closer cooperation in the international arena, are vital for survival at a time when protection has fallen away.

· Dr. Lewis, most politicians here seem to agree that, among all the Caribbean regional organisations, the OECS is one of the most effective. What are the specific reasons behind the relative success of OECS regional integration? Is it because the countries are smaller, because they are more or less at the same [eve/, that they find it easier to work together or what?

- Well, part of it has to do with the fact that the OECS was founded on the basis of a certain defensiveness, if I can put it that way. It was organised originally as the West Indies Associated States Council of Ministers after the Federation of 1958 was dissolved. The dissolution of that Federation left us with a number of functional organisations, in particular our Supreme Court, our monetary system - what was then the Eastern Caribbean Currency Authority - which included Barbados, and the Directorate of Civil Aviation, which is responsible for the management of civil aviation, telecommunications and navigation activities in the region. When the Federation broke up, and as the other countries - Barbados in particular - became independent, it was necessary to hold together the assets which I have just mentioned. And so, in a sense, the foundations of the OECS are our bank, our judicial system and our Directorate of Civil Aviation to which, over the years we have added a number of other institutions. In addition, it was necessary to preserve our external economic relations system, particularly the protection of our agricultural commodities - sugar and then bananas. To do this, we established a number of trade commissioner-ships. When the OECS was formally established, these became high commissonerships - in other words, we established embassies in the UK and Canada, countries with which we had a preferential relationship at the time.

We also had to try to ensure that we had some counterbalance to the larger Caribbean countries. Once the Caribbean Free Trade Area had been formed, our governments felt it necessary to organise the Eastern Caribbean Common Market system. This was in order to protect the interests of what were then seen as the less-developed countries of the English speaking Caribbean and to strengthen our capacity to operate within CARICOM. It was a way of giving us viability within the larger system.

From that essentially defensive starting point, and particularly since the organisation of the OECS in 1981, we have moved towards a more positive, activist approach. We have substantially widened the sphere of functional cooperation in areas such as education, health, fisheries, export development and agricultural diversification. And we have also given ourselves a more significant profile in international relations. The West Indies Associated States Council of Ministers, the institution that was the forerunner to the OECS, did not have international personality but the OECS does. The governments found it necessary to give greater prominence to the sphere of external economic relations. This, of course, was reinforced when we joined the ACP Group. The OECS secretariat had the job of dealing with the regional allocations under the various Lomonventions. And we are taking a very active role in that today. We have projects under Lomelating, in particular, to export development, agriculture and education. So the OECS has moved from a defensive to a more active stance.

Finally, I agree that the fact we are smaller, and have a greater sense of cohesion than one might expect in a larger grouping, gives us some degree of strength. Unlike CARICOM, the OECS has a strong political component. It is not a system based on political integration or unification, but there is a certain basis of political understanding that underpins the organisation and allows us to function perhaps in a more direct way than some other regional organisations.

· One of the weaknesses of CARICOM that is frequently identified is the difficulty in translating political decisions into concrete action. It appears that the OECS suffers less from this problem than the larger organisations.

- Of course, that difficulty faces all regional organisations to some extent but I think perhaps the difference in our case, which has meant that it is less of a problem, is that in the areas of functional cooperation that we deal with, the governments have felt that there was more at stake. There was a very direct interest in working together to acquire new assets or to preserve those that we had. There was more at stake for us, for example, in trying to undertake major education projects under the Lomonvention. The same is true of export development. We do not have the substantial infrastructure for promoting investment and exports that the larger Caribbean countries have. So there was a greater material interest in ensuring that we could undertake something on a regional basis that worked. It was a question of ensuring our viability. To illustrate the point, our Export Development Agency is currently staging an exhibition in Grenada entitled OECS EXPO-1994. This is designed to demonstrate what the OECS can do collectively, what volumes it can produce, the quality of the goods on offer and so on.

· Continuing on this theme of translating good intentions into deeds, what are your views on the fate of the famous cruiseship tax? It was agreed by everyone but it appears that on/y St Lucia implemented it That doesn't seem to be a very good advertisement for Caribbean solidarity.

- As I said, that sort of thing is not peculiar in economic integration systems. Countries break ranks and are more prone to do so at a time like this when they are searching for new business and struggling to adapt their structures.

Having said that, there is a belief that, in the longer term, revenue has to be generated to help repay the loans that have been taken out for investment in tourism facilities (notably the ports) and to protect the marine environment, which is our key tourism asset. It is only right that the resources should come from the enterprises which benefit from these assets. It is not yet clear that all the cruiseship companies understand this. But we believe that progress is being made and that we will eventually find common ground as to what should be expected of the industry. The OECS countries are currently discussing a project with the World Bank on solid waste management, which relates to the disposal of cruiseship wastes. We don't want our Caribbean Sea to end up like the Mediterranean. A project like this, which would involve a contribution from the cruise companies, makes great sense and I think they will come to understand the importance of what we are trying to do.

· You stressed earlier the political role of the OECS. Is political union, as such, still an official objective?

- We may as well speak frankly. I think that political union has run aground to some extent. Many people, myself included, felt that there was a window of opportunity in the 1980s for closer integration. We went through a process of in-depth consultation, in particular through the so-called regional constituent assemblies which were composed of all the interest groups and political parties in our sub-region. Although we pushed it fairly hard, I think some of the momentum was lost when we reached the point of having to stage referendums. Referendums are a good thing in democratic systems but they can also pose problems, as you know only too well in Europe. Our political leadership came to realise the difficulties involved, particularly given the form of political organisation that we currently have. There would have to be a referendum in each country for the people to decide whether they wanted political integration. There would also need to be a referendum to decide on the nature of the new constitution. Each element would have to be approved - by a weighted majority of two-thirds, three-fifths or three-quarters in both houses (House of Assembly and Senate) of every national parliament before the process was completed. With so many elements in our constitutions needing to be changed in order to achieve unification, the process was bound to be extremely prolonged and I think this caused some of the political leadership to hesitate. There was also the fact, of course, that with six to eight countries involved, there was always an election coming up in one or other of them. As you know, elections get top priority in democratic systems and political union ended up on the back-burner.

· You seem to be talking here of a top-down process. Isn't political union a subject that should be driven from the bottom-up?

- That isn't really the way it happened. The first initiative taken by the countries was the establishment of the regional constituent assemblies - there were four, one in each of the Windward Islands - but that was preceded by a series of consultations on the issue in the various countries. And the assemblies brought together all the interest groups as well as the political parties. They were given free reign and their proceedings were broadcast on television for a whole week.

· Now you seem to be talking about the four Wind ward Islands and not the OECS as a whole.

- That is because there was a point at which Antigua and St Kitts decided that they could not go forward with political union and the four Windward Islands chose to take it further. There was a certain logic in that - they were all islands that were deeply concerned about the future of the banana industry which largely dominates their economies. What I would say is this: There is still a realisation that it is only through some form of closer integration and policy harmonisation that we can create a viable basis for economic activity in the modem world, particularly given the changes in the international environment. The approach governments are now taking is to place more emphasis on achieving what is called the OECS single market. In other words to rid the subregion of the remaining tariff and non-tariff barriers, to allow greater freedom of movement of people and to create a system including, for example, a stock exchange, which will allow for the free movement of capital.

· In other words, along the lines being followed by the European Union, although you already have a common curreny.

- Yes. The slight difference is that we have a common currency and that has enabled us to take initiatives in respect of the banking system for example; a home mortgage banking system throughout the area. It also further enhances the possibilities for free movement of capital and allows us to move on to estabilishing a stock exchange. These are the kinds of issues that are being emphasised, although there is also the perception that to pursue them effectively we need a greater degree of policy harmonisation and political commitment.

· What do you say to the criticism, often voiced by politicians in the smaller islands, that the burden of servicing all the regional and international organisations they belong to is too heavy? After all, in addition to the OECS, you also have CARICOM, the ACS, the OAS and indeed the ACP Group. Very often, it is the same problems that are discussed in all these groupings and it is only the number of participants that varies.

- It is certainly true that the limited human and financial resources at our disposal do not allow for very active participation in the various regional institutions, not to mention international bodies, to which we are committed. Nonetheless, I think there is the feeling that a number of them - certainly the OECS, CARICOM and the Commonwealth - are crucial to our viability and to our activity in international affairs.

There is also a degree of uncertainty stemming from the fact that we are having to prepare for a kind of economic adjustment. We have the development of the European single market, the changes that are taking place in the banana industry, the estabilishment of NAFTA and the general liberalisation of trade to contend with. We are witnessing the removal of the protectionism under which we have functioned for so many years. It is understood that we have to prepare for that and there is a view that resources have to be conserved for investment in activities related to economic adjustment, without our having to borrow too extensively. And so l think our countries are beginning to look again at the kinds of institutions that they ought to belong to. Priority is given to the regional institutions but, at the same time, it is understood that we derive benefits from organisations like the Commonwealth, and that we need to preserve our membership of them. There are institutions now coming on to the scene like the proposed Association of Caribbean Stat" which the governments are looking at closely. There are institutions like SAILOR, the Latin American Economic System. Most OECS countries are not members of this but we obviously have some interest in the wider sphere of Latin American cooperation.

It is clearly the case that many countries have difficulties in functioning effectively in all the different organisations. They have to decide which ones should be given priority - and I think it is fair to say that the OECS ranks quite highly, especially if one looks at it in terms of the personnel they allow us to have.

· Looking at it from the level of the OECS sub-region, are you going to be able to survive in the changing global environment without some form of protection? One hears from many quarters, for example, that the private sector, with its mercantile as opposed to production-oriented mentality, is lacking in entrepreneurship and is not geared towards taking risks.

- In a sense, the changes that are happening have come upon us quite suddenly. The OECS countries have never really had a substantial manufacturing system. We did start, within the framework of CARICOM, on some forms of industrial development, mainly with a view to exporting to the larger CARICOM states. Up until the early 1980s, that process was going quite well. Countries like Antigua, St Kitts and St Lucia, for example, began to develop an industrial infrastructure and to export goods to Trinidad, Jamaica and, to a lesser extent, Barbados.

Then the economies of the larger countries - Trinidad, Jamaica and Guyana - went into decline and the markets started to disappear. There were two reasons for this. First, in order to protect themselves, some of the larger countries put up protective barriers - quotas, licensing systems and so on. Second, they simply did not have the resources to purchase the goods. And so the whole basis on which CARICOM was built as far as we were concerned, which was to provide a market for our exports, while the larger countries themselves increasingly exported to the rest of the world, began to disappear in the 1980s. And the infrastructure for industrialisation that we had begun to develop was damaged in the process. That set us back and left us unprepared for the largely unforeseen events of more recent times - that is to say, the substantial liberalisation of international economic relations. Whether we like it or not, that process is going ahead, particularly here in the westerm hemisphere. We see it in the NAFTA agreement between the USA, Canada and Mexico, and it is happening increasingly in South America as well. America is effectively forcing our own protective systems out of existence. As you know, the tariffs in CARICOM are progressively being reduced. And we are doing this at a time when the circumstances are not particularly favourable to us - when our agricultural commodities, which have always had international or, to be more accurate, 'metropolitan' protection, are themselves under attack. So the climate in general is not very good for the kind of economic adjustment that we, and in particular our private sectors, need to undertake to survive in the future. This has inevitably caused anxiety but I think there is a realisation that the progressive liberalisation of global economic relations is inevitable, that that process obviously includes the Caribbean, and that we will therefore have to find a way of dealing with it.

· Time and again in the Caribbean you seem to stumble upon the problem of management at all levels. With this in mind, what are your feelings about the banana industry and about its prospects for survival in a commercial setting?

- What the governments have tried to do here is to tackle a future problem before it actually arises. Earlier discussions about the management and commercialisation of the banana industry really began in anticipation of the changes brought about by the European Single Market. I believe that there is sufficient capacity within the Windward Islands and certainly within the wider Caribbean for the proper commercial management of the banana industry. The people of the Windward Islands have tremendous experience in bananas and I am sure that we have a sufficient human resource base to manage the industry. The key thing is to put greater emphasis on the commercial environment - the importance of the market in determining policy. Up to now, the preferential system has been the key policy determinant but that has now to be adjusted. In some respects, the industry's main problem is not the commercial management or marketing aspect, although that needs to be dealt with, but rather the domestic management. To some extent, the banana sector suffers from the same problem that affects all other industries and systems in these islands, namely the shortage of capable middle management. This is a crucial element in keeping the systems running. Some emphasis is being put on that now in the OECS generally in our educational systems. Of course, there also has to be a proper understanding of what the international market requires. For many years we have been operating, not just under commercial protection, but also under a form of institutionalised British protection. Now it is recognised that, with increasing liberalisation, we need independent producers to have a more profound understanding of the commercial aspects. Our market is no longer restricted to the UK - it is Europe as well - and that means we need a greater degree of participation in the marketing and promotion of our bananas, and even in the shipping arrangements. Discussions about this are currently under way. We need to develop new skills in this area because, even though the industry is nearly 50 years old, we have never really been involved in the international marketing side of it.

· To conclude, how optimistic are you about the future of the region, given what you say about the ending of the benefits of the protectionist era?

- I believe there are substantial problems ahead of us. These are both domestic and, of course, international in character. The fact that our economies have always been open means that all the trends in the international economic arena have a speedy impact on our domestic systems. Although we have had formal protection in certain sectors, overall our economies feel the effects of changes in the international system very quickly. But we have not developed the instruments for dealing with the international economy. As I said earlier, we have relied on the institutional protection of the United Kingdom but that has now gone and we need to develop our own instruments instead. What this points to, of course, is a greater degree of collaboration. I say this particularly for the OECS but I believe it is important for CARICOM as well.

There must be closer collaboration between countries in the whole business of international negotiations, international marketing, international exports and international investment. We need to have a more collective use of the human resources at our disposal and this is hard to organise. The countries are sovereign. They believe themselves to have particular interests which need protection. But more and more we find, as we are confronted with NAFTA, the European single market and so on, that the problems facing us are largely the same ones. So l think a greater degree of collaboration in the international sphere is what our governments need to concentrate on right now.

They also need to focus on closer harmonisation at the domestic level, particularly in the areas of monetary and general macro-economic policy. When we were colonies, we had a greater degree of macro-economic harmony - because the British ran us - than we have today. We need to work together to build up our capacity to supply quality products in sufficient volume. That means, for example, coordinating the development of our human resource base. We need a greater emphasis on creating region-wide companies producing goods of a consistent high standard, so that we can make our impact on the international system.

The challenge is, therefore, twofold: domestic harmonisation and working much more closely together in the international sphere. I believe those two approaches should take us through the foreseeable future. Our problem today is in finding ways to create institutions that will allow us to achieve this. There is a sense that our established integration systems are not completely up to the task. They have not moved with developments in the international economy. That was something that emerged from the report of the West Indian Commission with which you may be familiar.

So we need new instruments. What I am not sure about is whether our governments have come to terms with what is required to create these new instruments and to have them work properly.

Interview by Roger De Backer