NOTES ON THE EUROPEAN UNION AND AFRICA
by Róbinson Rojas Sandford(1997)
In the 1990s a tri-polar global economy consolidated around spheres of
influence clearly defined in different geographical areas. Three major
centres of economic activity:
United States
Japan, and
European Union
By and large, the spheres of influence were Latin America for United
States, South and East Asia for Japan, and Africa for the European
Union, with major inroads into Central and Eastern Europe (the former
central planned economies).
For a detailed account of the three spheres of influence, see
R. Rojas: The transnational corporate system in the late 1990s
THE CASE OF THE EUROPEAN UNION
Since the late 1950s, the European Community related to Third World
countries very much along the lines of colonial times. Africa, the
Caribbean and the Pacific were main targets for economic intercourse,
political influence and sources of raw material and cash crops.
History played a critical role in moulding the development posture
of the European Community and its members.
There was a focus on Africa, creating at least two zones of influence:
former British colonies and former French colonies.
There was also a notion "of natural partnership" with Africa, the
Caribbean and the Pacific.
EC's countries aims were:
a) securing a supply of raw materials
b) securing a market for European manufactured goods
c) "protect" the regions from the USSR and People's China efforts to
spread socialist regimes
Two main instruments were used by the European Community in its
development policy:
-trade preferences for African, Caribbean and
the Pacific former colonies, and
-direct aid
Asian and Latin American developing countries were never extended
trade preferences by the EC.
By and large, both tools became one big political instrument in the
hands of Britain and France to protect the interests of their national
big businesses in Africa.
Between 1958 (Treaty of Rome) and 1975, when the LOME Convention was
created in Lome (Togo), the European Community developed the main tenets
of its development policy.
The Lome Convention united the European Community and a group of
African, Caribbean an Pacific states (the ACP) in an agreement which
includes among its most notable features:
trade preferences,
aid, and
special facilities (*)
(*) notably the System for Stabilization of Export Earnings (STABEX)
totally financed by the EC then, the EU, now. And a Special
Facility for mining products -bauxite/aluminium, copper/cobalt,
iron, tin, phosphates, manganese and uranium- called SYSMIN.
When it first entered in effect in 1975, the Lome Convention was
"heralded as the only agreement that brought industrial countries and
developing countries together as 'equal partners' in mutual recognition
of their interdependence in seeking economic growth and development...
"..over the years some of the initial optimism has dissipated; indeed,
some ACP spokemen have claimed that the two sides now relate to each
other more as 'aid donors' and 'recipients' than as 'equal partners'...
"...available empirical evidence has tended to show that bilateral aid
from EC countries has been allocated among developing countries much
more on the basis of donor interests than on that of recipient country
needs " (A. Maizels and M. Nissanke, "Motivations for Aid to Developing
Countries", World Development, Vol. 12, No. 9, 1984 -the study covers
France, Germany, Great Britain, United States and Japan)
E. R. Grilli, "The European Community and the Developing Countries",
Cambridge University Press, 1993, argues that "the drafters of the
first Lome Convention were convinced that the extension of trade
preferences to the ACP countries would boost their export capacity and
hence encourage economic growth and development..."
"...this objective does not seem to have been achieved: although ACP
exports to the Community, excluding crude and refined petroleum products,
have increase in value by 51 percent between 1976 and 1983, their share
of total EC imports from outside the community during this period fell
from 6.3 percent to 4.5 percent.."
The official point of view of the EC has been that "ACP states have
limited themselves to traditional exports...they have failed to match
the productivity and quality advances of Asian and Latin American
competitors..."
But the ACP point of view is totally different. They say that "some
elements of the Convention, in fact, hinder the growth of their exports
...the Convention's safeguard clause tends to inhibit growth in areas
where they could enjoy the greatest dynamic comparative advantage and
provides a powerful disincentive to their industrial development".
In 1993 the Lome Convention accepted Eritrea as a member, increasing to
70 the number of African, Caribbean and Pacific states linked to the 15
members of the European Union.
DEVELOPING COUNTRIES SHARE OF EUROPEAN UNION IMPORTS.
(percentage of total imports)
1976 1980 1985 1990 1992 1994
ACP 6.7 7.2 6.7 4.7 3.7 2.8
Asia 4.2 5.9 6.5 11.0 13.6 13.1
Latin America 5.3 5.1 6.5 4.6 5.1 5.4
Mediterranean 6.1 6.1 8.1 6.5 6.2 6.1
---------------------------------------------------------
All developing states 44.8 42.4 34.7 31.2 29.2 34.2
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source; EUROSTAT
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Parallel to the above trend, total aid conceeded by the EU to Africa
is consistently decreasing in real terms:
EU.- TOTAL AID.-AFRICA.- (ECU per capita)
1958 9.7
1964 7.7
1971 5.8
1976 4.1
1981 2.6
1986 2.9
1990 2.8
European Union trade and aid concessions have been always tied to
one another. Several factors and tendencies have been shaping the
pace of adjustment in EC (then EU) development policies:
-Africa is not anymore the "natural complement" of Europe, rather
is of little direct economic value and has become a quasi-permanent
political burden.
-Since 1985 aid is given only if structural adjustment programmes are
implemented (rolling back the state, devaluation, deregulation,
liberalization, extremely favourable conditions for foreign investment
and production for the European markets, and free-trade)
-Closing links with Asian and the Central and Eastern European states
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EUROPEAN COMMUNITY.PRODUCT STRUCTURE OF TRADE WITH DEVELOPING COUNTRIES.
(percentages)
EXPORTS TO LATIN AMERICA AFRICA SOUTH AND S.EAST ASIA
1955 1985 1955 1985 1955 1985
Food 6.8 8.4 14.3 15.7 10.3 5.1
Fuels 1.9 1.8 6.6 3.0 2.0 0.1
Manfactures 72.3 83.4 64.6 72.0 72.6 87.7
IMPORTS FROM
Food 50.7 42.0 58.9 12.8 26.9 14.3
Ores, metals 15.1 15.8 19.5 3.1 8.1 5.0
Fuels 12.7 24.0 0.3 72.6 3.8 1.4
Manufactures 1.7 14.3 3.8 6.0 4.4 71.8
________________________________________________________________________
source: UNCTAD, "Handbook of International Trade and Development
Statistics", United Nations, 1988
________________________________________________________________________
HIGH RATES OF PROFITS ON FOREIGN CAPITAL
There has been, though, a consistent trend in the African continent
relations not only with the EC/EU, but with the US and Japan. The
rate of profits reaped by transnational corporations from industrial
societies have been extremely high.
________________________________________________________________________
Average 1971-1991 in US$ millions.- 1991 prices.
Country/ Factor Payments
Region to abroad Gross Domestic Product
Sahelian and Coastal Western Africa:
Benin -16.3 1,886
Burkina Faso 11.7 2,669
Cape Verde -3.7 331
Cote d'Ivoire -886.1 7,283
Gambia -17.1 229
Ghana -79.7 6,413
Guinea Bissau -4.0 211
Guinea -42.1 2,937
Liberia -41.7 1,030
Mali -23.1 2,451
Mauritania -67.1 1,030
Niger -70.3 2,284
Nigeria -3,057.6 34,124
Senegal -175.3 5,774
Sierra Leone -32.5 743
Tchad -34.9 1,236
Togo -41.2 1,633
-------------------------------------------------------------
Total -4,574.7 69,595 (6.6%)
Central Africa:
Cameroon -588.6 11,666
Central African Republic -12.1 1,202
Congo -185.7 2,909
Equatorial Guinea -1.4 136
Gabon -360.3 4,863
Sao Tome and Principe -0.3 47
Zaire -518.0 8,117
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Total -1,666.4 28,940 (5.8%)
Eastern Africa and Horn of Africa:
Burundi -22.0 1,035
Djibouti - 217
Eritrea - ..
Ethiopia -36.5 5,982
Kenya -350.2 7,125
Rwanda -3.8 1,579
Somalia -24.6 1,035
Sudan -156.9 10,094
Tanzania -71.9 2,223
Uganda -40.4 2,527
Zambia -360.6 3,831
-------------------------------------------------------------
Total -1,066.9 35,431 (3.0%)
Southern Africa:
Angola .. 6,010
Botswana -119.7 3,644
Lesotho +349.9 578
Malawi -54.6 1,986
Mozambique -102.5 1,219
Namibia -73.7 1,600
Swaziland -10.3 645
Zimbabwe -227.9 5,543
-------------------------------------------------------------
Total -588.7 14,637 (4.0%)
South Africa -4,043.4 91,167
Total 102 developing countries -69,594.6 3,526,029 (1.97%)
Total Africa -11,940.1 239,770 (5.00%)
OFFICIAL DEVELOPMENT ASSISTANCE FROM OECD AND OPEC COUNTRIES
(1992 PRICES.-MILLIONS OF US DOLLARS)
1970 35,000
1975 41,000
1980 47,200
1985 55,000
1989 55,900
1990 59,800
1991 62,100
1992 62,700
1993 57,100
Average official development assistance 1970-1991 in US$ 1991
47.6 US$ billion
Average Factor Payments to Abroad 1971-1991 in US$ 1991
69.6 US$ billion
Memorandum item: AID is financed with taxes paid by all industrial
societies citizens
FPA go directly to the pockets of the owners of
transnational corporations
Therefore: the population of industrial societies
finance the survival of the societies bled by
international capital
________________________________________________________________________
(source: World Bank Indicators 1995, World Development Report 1993)
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