Opinion of the European Economic and Social Committee on the EU-Africa Strategy
Date: 2008-09-18
Institutions: European Economic and Social Committee
Subjects: Africa, ESC opinion, cooperation policy, development aid, development policy, economic agreement, international affairs, international meeting

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Directive
on tax exemptions applicable to the permanent introduction from a Member State of the personal
property of individuals (Codified version)’

COM(2008) 376 final — 2008/0120 (COD)

(2009/C 77/31)

On 18 June 2008, the Council of the European Union decided to consult the European Economic and
Social Committee, under Article 262 of the Treaty establishing the European Community, on

Tax exemptions applicable to the permanent introduction from a Member State of the personal property of individuals
(Codified version).

Since the Committee unreservedly endorses the content of the proposal and feels that it requires no
comment on its part, it decided unanimously, at its 447th plenary session of 17 and 18 September 2008
(meeting of 17 September), to issue an opinion endorsing the proposed text.

Brussels, 17 September 2008.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

Opinion of the European Economic and Social Committee on the ‘EU-Africa Strategy’

(2009/C 77/32)

In a letter dated 11 July 2007, Commissioner Louis Michel, Commissioner for Development and Humani-
tarian Aid, asked the European Economic and Social Committee to draw up an exploratory opinion on

The EU-Africa Strategy.

The Section for External Relations, which was responsible for preparing the Committee's work on the
subject, adopted its opinion on 17 July 2008. The rapporteur was Mr Dantin.

At its 447th plenary session, held on 17 and 18 September 2008 (meeting of 18 September 2008), the
European Economic and Social Committee adopted the following opinion by 89 votes to none, with no
abstentions.

1. Conclusions and recommendations

1.2
The stakes are high, especially in terms of Africa's devel-
opment and stabilisation, but also in terms of Europe's security
and ability to achieve steady sustainable growth.

In the globalised context of this new century, there is a
1.1
need for considerable evolution in the relations between
Europe and Africa, by drawing on the lessons of the past,
in particular by working towards a partnership based on equal
rights and obligations. After decades of cooperation and devel-
opment aid, extreme poverty in Africa is worsening and
deepening: the fruits of misdirected growth, characterised by
low job creation, are unevenly distributed and therefore
entrench inequalities; over 55 % of the sub-Saharan population
lives on less than a dollar a day; over 70 % of the total number
of jobs are in the informal subsistence sector, and over 57 % of
them are in agriculture. The picture that emerges is one where
decent and productive jobs are dramatically scarce.

The development policies followed up to now by the
1.3
European Union pursuant to the various agreements (Lomé,
Yaoundé, Cotonou) and the funding devoted to them have not
achieved the desired results, especially as regards creating
decent jobs. That said, this state of affairs cannot continue,
and change being indispensable, the Committee welcomes the
success of the EU-Africa Summit held in Lisbon on 8-9 Decem-
ber 2007.

1.3.1
treated as a cross-sector issue.

It particularly welcomes the fact that employment is

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1.4
The EESC believes that developing decent employment is
central to reducing inequality and poverty, fostering social inte-
gration and living with dignity, which are vital for stemming
extremism and conflicts and achieving the stability required.

1.5.7
The involvement of non-state actors is indispen-
sable for creating decent jobs and should therefore be
central to the common EU-Africa strategy. They should
therefore be involved in drawing up national and regional indi-
cative programmes.

1.5
The Committee believes that in order to create decent
employment, measures geared to this essential objective must be
taken by acting on the parameters set out below, and which,
although intrinsically different, are linked by strong synergies
that generate interactive reactivity and form a single policy.

1.5.1
Growth is mainly natural-resource based and creates
little employment. It must be re-directed to the primary
processing and refinement of products. Investment should
be geared to this end, with emphasis on sectors with high added
value.

1.5.2
The private sector is of the utmost importance,
and through it, SMEs. The EU should make SME development
a pillar of its cooperation policy.

1.5.3
Current rises in raw material prices are an additional
reason for making the agricultural sector a strategic devel-
opment priority. Since agriculture accounts for a considerable
proportion of land use and rural employment, it should contri-
bute to self-sufficiency in food, the development of processing
industries, and to halting the rural exodus at the same time.

A short, medium and long-term agricultural policy must be
set up and priority given to ensuring that there is a budget
for its implementation. This policy should be drawn up and
implemented in coordination with agricultural organisations.

1.5.4
Developing human resources is an indispensable
factor in all development strategies. Thus, there is a need to
analyse employment needs and the labour market, make fore-
casts, and anticipate the major challenges involved in
adapting vocational training to employment.

1.5.5 While regional and sub-regional economic integra-
tion has progressed significantly, trade potential has yet to be
fully exploited. In particular, measures should be coordinated in
order to harmonise customs procedures, improve infrastructure
and guarantee the free movement of citizens. From this perspec-
tive,
the Committee regrets that regional negotiations on
economic partnership agreements, which include economic inte-
gration among their objectives, have not been concluded at the
time of writing.

Social dialogue should accompany and enhance all
1.5.6
development polices, especially through collective bargaining.
For this reason, there is a need to establish or foster strong
and independent employer and employee organisations.

‘Good governance’ is the key to investor confidence.
1.5.8
From this perspective alone it is essential for job creation. It
should be considered in its entirety and include respect for
human rights and workers' rights, including trade union free-
doms, labour standards and action to combat corruption. On
this last point, the EU and its Member States should make
financial aid contingent upon the traceability of aid flows
to the end-user.

2. Introduction

2.1
In a letter dated 11 July 2007, Commissioner Louis
Michel, Commissioner for Development and Humanitarian Aid,
asked the European Economic and Social Committee to draw up
an exploratory opinion on the diverse issues raised in the Communi-
cation entitled ‘From Cairo to Lisbon — The EU-Africa Strategic Part-
nership’, in particular the question of how to reduce the employ-
ment deficit in Africa.

2.2
The EESC welcomes this request which, whilst in keeping
with the spirit of the development policies applied in Africa for
many years, seeks to raise new questions as to the future situa-
tion,
the
in particular with reference to the decisions of
EU/Africa Summit, outlined in the declaration entitled The Stra-
tegic Partnership, which is accompanied by a First Action Plan
(2008-2010) for its implementation.

By requesting the opinion of the Economic and Social
2.3
Committee on employment, the Commission is making it clear
that it has identified employment as the primary objective of its
development policy and that economic and social stakeholders
have a role to play in eradicating poverty by creating decent
jobs. The EESC is delighted to note this.

After taking a brief look at the policies of the past and their
results and following an overview of the situation in Africa
today and its future policies, this opinion will highlight the key
areas where the Committee believes action needs to be taken to
help create decent jobs. This research will take into account the
guidelines and action plan which were adopted at the EU/Africa
summit held in Lisbon on 8 and 9 December 2007. Accord-
ingly,
in particular, on the EESC's previous
opinions on development in Africa (1).

it will be based,

(1) CESE 1205/2004 The role of women's organisations as non-state actors in
implementing the Cotonou Agreement Rapp. Ms Florio. September
2004.
CESE 1497/2005 How to integrate social aspects into the Economic Part-
nership Agreement Rapp. Mr Pezzini and Mr Dantin. December 2005.
CESE 753/2006 Prioritising Africa: European civil society's perspective
Rapp. Mr Bedossa. May 2006.
CESE 673/2007 Migration and Development: Opportunities and chal-
lenges Rapp. Mr Sharma. December 2007.
Reports by the EESC's EU-ACP Follow-up Committee: Human resources
for development Rapp. Ms King and Mr Akouete. May 2007.

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3. General comments

Africa is a continent of many faces. It is made up of
3.1
states that are often different in terms of history, culture, their
ethnic make-up, own resources (minerals, oil, diamonds …),
climate or indeed as regards democracy, good governance and
respect for human rights … This has led to a whole variety of
differing economic and social levels. It is therefore difficult to
understand or to view this continent in a general and uniform
manner. That being said,
its countries share a number of
common traits, most importantly their relations with Europe,
both past and future, or indeed a shared history which will give
rise to a common future as part of a joint movement for
change.

3.2
In the globalised context of this new century, there is a
need for considerable evolution in the relations between
Europe and Africa, by drawing on the lessons of the past. This
must be structured around an understanding of the need to
build a shared future which must be developed around common
challenges and common risks, an approach based on mutual
interest, rather than on a short-lived shared history, on compas-
sion or loyalty, at the risk of forcing certain partners, on both
continents, to confront their own conflicting positions.

3.3 Much is at stake. Only fifteen kilometres from Europe,
the African continent concentrates all of the ‘major risks’ of the
modern world on its territory: uncontrolled migration, emerging
epidemics, climatic and environmental disasters, the threat of
terrorism … But it also has the most potential, both in terms of
natural resources and in foreseeable consumer and investment
demands.

3.4
Undoubtedly, the European Union remains Africa's prin-
cipal economic partner and its most important donor. Yet this
historical monopoly is now being broken up by an offensive
from the ‘emerging backers’ — firstly China, but also India, the
larger Latin American nations and the Gulf Kingdoms, even
Iran, as well as by the return of the USA, which is keen to main-
tain the security of its energy supplies, to combat the threat of
terrorism, to extend Christian values and democracy into new
territory, and to counter the ‘entry into the game’ of
the
Chinese, something they see as a worrying development (2).

Yet it is also clear that the future security of the Euro-
3.5
pean continent, such as its capacity to maintain steady sustain-
able growth, will be closely and immediately dependent on Afri-
ca's development and stability. Europe cannot continue to exist
as an island of prosperity over the medium and the long term
being located only fifteen kilometres away from a continent
whose defining characteristic is misery. At stake is the sustain-
able development of the European Union, which must realise
that now it is Africa which is its border.

unilateral vision of our interests. This antiquated, unrealistic
vision has been extremely damaging. There is a need to turn a
new page and establish a new form of partnership, between
partners who are equal both in terms of rights and responsibil-
ities, who share an approach based on such factors as sustain-
able development, good economic, fiscal and social governance
and the transfer of technology …’ (3).

3.6.1
This strategy, based on an unequal ‘donor-recipient’ or
‘financial backer-recipient’ which has been given a concrete
form through the contents of the various agreements that have
governed or govern relations between the EU and Africa can
only be termed a ‘failure’ (4), given the economic and social
situation in Africa today. Clearly, this state of affairs needs
changing.

It has reduced the African countries to a state of dependence,
particularly in terms of financing, leading them to mortgage the
dynamism needed for successful access to the world's economy.

After decades of development aid as practised by the
3.6.1.1
European Union, by numerous Member States (often former
colonial powers), and by international organisations such as the
World Bank,
the extreme poverty of Africa is only getting
worse.

3.6.1.2 Whereas emerging economies or regions such as
China,
India, South-East Asia or Brazil are developing into
economic powers, and taking their share of international trade,
Africa has, bar a few exceptions, yet to take off economically.

3.6.1.3 Why has a country like South Korea which, only a
few years ago, lived ‘for rice and on rice’ managed to become
one of the world leaders in electronics, shipbuilding, IT services
and car manufacturing … and not Africa?

Europe still remains the first

3.6.1.4
importer of African
products. However, despite nearly twenty-five years of favour-
able customs tariffs, the volume of exports from Africa to the
EU has more than halved, falling from 8 % in 1975 to 2.8 % in
2000, in relation to the volume of trade worldwide. This prefer-
ential customs treatment has not been sufficient.
is the
uncompetitive nature of African goods which has compromised
the continent's ability to export its goods to Europe.

It

3.6.1.5
The fruits of Africa's growth, primarily derived from
the exploitation of its natural resources, have been unevenly
distributed, widening inequalities still further, making the poor
as poor or even poorer than they were, while the rich become
even richer. All of which is a long way from good economic
governance, raising a whole host of ethical concerns. Numerous
Africans have spoken out against this state of affairs:

— ‘(We must) repatriate the funds illegally obtained in the
countries of origin and stored away in foreign bank
accounts’ (5).

3.6
‘Europe's strategy towards Africa has long been charac-
terised by an unequal donor-recipient relationship, coupled
with an ideologically misguided clean conscience, and a

(2) Union Européenne/Afrique: Le partenariat stratégique Nathalie Dela-
palme, Elise Colette. Notes de la Fondation Robert SCHUMANN
December 2007.

(3) Speech by Commissioner Louis Michel at the EU-China-Africa confer-
ence organised by the European Commission in Brussels on 28 June
2007.

(4) Response from Commissioner Michel to a speaker at the Joint Parlia-

mentary Assembly at Kigali. 18, 19, 20, 21, 22 November 2007.

(5) African Union Extraordinary Summit on Employment and Poverty
Reduction in Africa. From 3 to 9 September 2004 in Ouagadougou.
Final Declaration (Article 16).

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— ‘We are ill with poor governance …. some countries are
even poorer than they were before oil or diamond mining
began…others are ruled by leaders whose personal assets
outstrip their countries' national debt! This evil hasn't come
from outside but from within, from ourselves’ (6).

4. From Cairo to Lisbon: a new EU-Africa strategy

4.1
Policies implemented to date, and the funding they
receive, have not always delivered the desired results, especially
where creating decent jobs is concerned. That said, and changes
being indispensable, the Committee is delighted with the success
of the Lisbon Summit on 8 and 9 December 2007. It takes plea-
sure in the political will which has made it possible to extend
cooperation or even to redesign it through a change of direc-
tion, and to thus develop both trade and political relations
between the two continents.

4.2
Seven years after the Cairo summit, the Lisbon summit
has laid the foundations for a new strategic partnership of
equals between Africa and the European Union, based on a set
of common values, principles and interests which will enable
them to address the global challenges on the international scene
together: peace and security, governance and human rights,
migration, energy and climate change, trade, infrastructure and
development.

4.3
Its contents aside, what makes this strategy original and
ground-breaking is the implementation, alongside the declara-
tion of an operational phase, of eight priority action plans (cf.
Appendix 1 to this opinion), a type of roadmap or working
plan which will translate into concrete terms the implementa-
tion of strategic priorities and choices identified by the two
continents. The progress made in achieving these eight action
plans, which like the Cotonou Agreement are extremely ambi-
tious, will be assessed at the next summit in 2012.

4.4
The EESC views as positive the fact that, in addition to
the declarations which are undoubtedly important, a whole
working framework has been set up, which will make these
declarations an operational
in particular, allow
evaluation of their implementation in 2010.

reality and,

4.5
The EESC emphasises that each of the eight partnerships,
set out as action plans, can contribute to the development of
decent jobs once the necessary political decisions have been
taken and provided that it is accompanied by specific employ-
ment policies (See Chapter 7).

However, despite these achievements,

4.6
the good will
demonstrated by those at the summit was nonetheless unable to
conceal a number of difficulties and potential dangers raised by
certain African leaders. They felt that while the new strategy
was indeed innovative through its creation of a balanced part-
nership, it would not lead to a rapid improvement in relations
which were even today still seen very much in terms of domi-
nant and dominated partners:

— There was harsh criticism of the EU's bureaucracy whereas
‘with China, it is so easy to obtain the tractors that we need
straight away …’

— The EU was expected to either compensate Africa for its
colonisation and despoiling or to accept Africa's immi-
grants …

— Doubts were expressed as to whether it would be possible to
conclude the economic partnership agreements in a true
spirit of partnership …

— There was condemnation of

the divergent views on the

Zimbabwe crisis …

A long and winding road still lies ahead of the two sides if they
are to achieve their aims in a spirit of renewed confidence.

In this context, the EESC believes that it is primarily
4.6.1
the responsibility of
the African governments themselves to
assume, within the framework of a balanced partnership,
the responsibility for good governance, the fight against
corruption and to attract direct or foreign investment to reduce
poverty in their countries. This assumption of responsibility, a
concomitant of their sovereignty, is indispensable for a renewed
partnership. This means that adhesion to the cause of
the
balanced partnership between Africa and the European Union
will be a vital principle from now on and will find its full
expression and move towards the creation of decent jobs.

4.7
The EESC notes with satisfaction the role given to civil
society, not only in the institutional sense (relations between the
EESC, and the UN's ECOSOC) (7) but also with regard to the
non-state actors who make up organised civil society (8). From
this point of view, if the political will which has been expressed
the difficulties
is to take shape and be turned into action,
encountered in the implementation of
these issues in the
Cotonou Agreement must be taken into account, even at the
risk of failure.

in all, the Committee approves of

All
the general direction
towards progress which the EU-Strategy brings to the continent
as a whole.

5. Decent employment, a vital objective for an effective

EU-Africa Strategy

Article 55 of

5.1
the EU-Africa Strategy stipulates that:
Employment issues, notably social protection, the shortage of employ-
ment opportunities and the promotion of decent work in Africa, will be
jointly addressed, with priority being given to creating productive jobs
in the formal economy, improving poor living and working conditions
in line with the UN decent work agenda and integrating the informal
economy into the formal.

5.2
The Committee is delighted that the employment ques-
tion has been formally taken into account in the EU-Africa
Strategy and believes that developing this issue lies at the heart
of all efforts, both in terms of quality and quantity, to tackle
inequality, poverty and social integration, which are necessary to
absorb extremism and conflicts and are therefore necessary for
the stability of the countries of Africa.

(6) Statement by the President of an ESC from a Francophone country of
West Africa at the general assembly of the UCESA (Union of African
ESCs) 13 and 14 November 2007 in Ouagadougou.

(7) See Articles 104 and 105 of the declaration.
(8) See Articles 106-110 of the declaration.

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6. The employment situation in Africa

The participation rate is high (68.6 %). While the unemploy-
ment rate is also high (10.3 %), it is the shortage of decent
and productive jobs that presents the gravest problem:
46.2 % of the population, of which 55.4 % are in sub-
Saharan Africa, live on less than a dollar a day. In other
the active population is
words, a substantial proportion of
employed in informal, mostly subsistence,
jobs. The informal
economy accounts for 68 % of total employment, 57.2 % of
which is in the primary agricultural sector. These jobs are
mostly filled by young people and women; since the latter play
a decisive role, being at the heart of their economic commu-
nities and families, they constitute the woof and warp of Africa's
economic and social organisation (cf. Appendix II
to this
opinion).

7. Creating decent and productive jobs

In view of the foregoing, the priority for Africa is to create
decent and productive freely chosen jobs. Nothing else will
contribute effectively to eradicating poverty,
living in dignity
and setting up effective social protection for all, while incorpor-
ating the gender aspect at all levels, as well as youth issues since
young people are Africa's future and to ensure solidarity among
generations.

Indeed, without productive employment, decent
living stan-
dards, economic and social development and personal develop-
ment will remain elusive. These objectives come before anything
else for the development of human resources and private sector
businesses. To reach its full potential this process must form
part of a facilitating framework that includes democracy, rule of
law, good governance, and respect
for human and social
rights …

The EU-Africa strategy adopted at the Lisbon summit addresses
employment as a horizontal issue. The purpose of this chapter
is to take an in-depth view of this central question through
analysis and proposals for guidelines by discussing the key
levers liable to contribute to the objective's approach: This is
essentially a macroeconomic strategy. However, in order to deal
with the diversity of actions required, it would be useful to draw
up, at a later stage, an inventory of the development aid activ-
ities carried out by European NGOs in Africa, highlighting the
range of
these
programmes
implemented in cooperation with local
communities and/or groups (cooperatives, market gardeners,
educational or health facilities) and contribute to creating jobs.

successful programmes,

especially where

are

Nevertheless, and in addition to the foregoing, the Committee
emphasises with force that the development of Africa, and
hence the creation of decent and productive employment
can only be achieved through greater stability in the coun-
tries that make up the continent. A considerable number of
these countries are still plunged in interminable conflicts. Over
the last ten years, conflicts in Guinea, Liberia, and Sierra Leone,
resource-rich countries, mainly in diamonds and wood, have
plunged the region into severe crisis, generating a large outflow
of refugees. And this is not to mention the conflict in Darfur
crippling Sudan, the ‘forgotten war’ in North Uganda, persistent

insecurity in the east and west of the Central African Republic,
and instability in the Congo … Given the situation, the Euro-
pean Union and, more generally, the international community
have an important role to play when faced with such a decisive
issue for the continent's future because, compounding the atro-
cities committed, there lies a fact that nobody seems able to
ignore or accept, namely that whereas employment can contri-
bute to the stability of States, the instability of States prevents
their development and hence job creation.

7.1 Job-creating growth

7.1.1
In terms of economic growth, 2006 was a boom year
for Africa, with rates of 6.3 % in North Africa and 4.8 % in
sub-Saharan Africa, though with contrasts between one country
and another.

are

These

figures

considerable,

especially when
7.1.2
compared with results in the European Union. However, due to
stagnating, not to say regressing, productivity, badly targeted
investments, low added value on essential industrial and agri-
cultural production, the population explosion and a massive
shortfall in decent employment, growth would have to be in
double figures in order to generate a quantitative and quali-
tative improvement in the employment situation. According
to estimates, a minimum growth rate of 9 % is required if we
are to begin to have a more positive understanding of
the
Millennium Goals, which in any case, regrettably, do not include
employment objectives.

7.1.3
Growth is creating few jobs because it is badly targeted.
It is usually fuelled by stepping up the exploitation of natural
resources, often characterised by working conditions bordering
on the unacceptable, the viability of which has recently soared,
especially in oil-producing countries, mainly due to the rise in
the per barrel price of crude oil. In addition to being unstable,
since it depends on fluctuating rates, this situation does not
create additional
jobs. This is equally true of other natural
resources insofar as they are usually exported unrefined. More-
over, when the middle classes reap the benefits of renewed
activity, they generally consume imported products. This type of
consumption also does nothing to generate employment locally.

7.1.4
The profits from extracting crude oil (it is not always
clear where and how they are used) have to be invested in
manufacturing processed products with high added value, which
would lead to growth and employment. The same applies to
other natural resources and agricultural produce, which could
themselves foster the development of an agri-food industry as
part of a structured, financed and prioritised agricultural policy
(cf. Point 7.4 and Appendix IV to this opinion).

Growth that creates jobs in optimum numbers will not
7.1.5
come from the mere exploitation of raw materials or traditional
and mass agricultural produce (sugar cane, cotton, bananas,
peanuts, cacao …). This will also be achieved by developing
processing industries for products with high added value, which,
in the long term, is the best way to avoid the deterioration of
terms of trade, participate in sub-regional, regional and ulti-
mately in the world economy in order to benefit from a new
phase in development.

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7.2 Redirecting investment towards diversification

The sum of these improvements should contribute to the quan-
titative and qualitative growth of public policies.

There is no, or hardly any,
there is no growth without quality investment.

job creation without growth and

It is generally agreed that maintaining a substantial growth rate
over several years (cf. 7.1.2) requires an investment rate ranging
from 22 to 25 % of GDP, whereas it has been no more than
15 % in recent years. Two sources of investment are liable to
achieve such growth rates.

7.2.1 Endogenous investment

for

job creation;

7.2.1.1
First of all, there is a need to invest in sectors with
high added value and (or) a high production capacity with a
infrastructure, sustainable
strong potential
development and agriculture, environmental, conservation, the
culture industry, transport, fisheries, logging, ICT, industry (first
processing and finished products) … There is also a need to
invest in areas that contribute to developing a favourable frame-
work for foreign direct investment (FDI). Furthermore, there is a
need to take steps towards creating a virtuous circle: endo-
genous investment → production → trade → profit → new
endogenous investment …

7.2.1.2
Endogenous investment, or rather the mobilisation of
internal financial resources, will, unlike FDI, enable Africa to set
its own development priorities.

7.2.1.3 Where would endogenous investment come from?

— The mobilisation of vast visible or hidden profits generated
from the exploitation of natural resources (oil, gas, coal,
diamonds, wood, minerals: chrome, platinum, cobalt, or,
manganese, copper, iron, uranium …) (9). (What becomes of
them at the moment? And what becomes of profits from
sugar sold at three times the world's rate, for example?).

— The introduction of value added tax (VAT) has only had
limited and partial success in boosting public revenue. This
could be improved.

— Improved tax collection could double the tax revenue of

some countries.

— Significant variations in tax revenue/GDP ratios (ranging
from 38 % in Algeria and Angola to less than 10 % in
Niger, Sudan and Chad) indicate that countries with poor
ratios could substantially increase their revenue.

— A transition from undeclared to declared employment,
which would raise tax revenues, would increase the resource
base.

(9) Almost all the world's chrome reserves (mainly in Zimbabwe and
South Africa), 90 % of its platinum reserves (South Africa) and 50 % of
cobalt reserves (DRC, Zambia) are located in Africa.

— In a number of countries, the funds sent by immigrant
workers are an important resource for development (10).
They amounted to some US$16 billion in 2004. Registered
and unregistered funds are thought to exceed the financial
resources from public development aid (PDA) and foreign
direct investment (FDI). These funds, which do not give rise
to debt, could have a considerable impact on investment
capacity if channelled through the official banking system in
African countries, once it is reliable, credible and efficient.
From this point alone, we can appreciate the importance of
immigration for African countries. This level of impor-
regulations
tance
that
concerning migratory flows warrant
in-depth discussion
between the EU, Member States singly, and the African
countries concerned (11).

amendments

signifies

all

to

— Capital flight continues to deprive African countries of vast
investment resources. This capital flight is twice as high
as the African continent's total debt (12), which leads
some experts to claim that Africa is a ‘net creditor’ vis-à-vis
the rest of the world. If these resources were dedicated to
productive investment, they would create employment and
provide revenue for large segments of the population. In
addition to stemming the flow, as has been done in some
European countries, governments could also consider a
temporary amnesty for the repatriation of such capital.

With this in mind and by undertaking the necessary reforms,
especially in the financial and budget sectors, Africa could easily
mobilise its internal resources in order to finance productive
investment of its own choice.

7.2.2 Foreign direct investment (FDI)

The contribution of foreign direct investment is crucial to the
continent's economic development. Indeed, it plays an impor-
tant role, when properly directed, in the host country's develop-
ment process, mainly by providing capital as well as technology,
skills, know-how and market access, which contributes to
greater efficiency in the use of
resources and increased
productivity.

7.2.2.1
Although average annual FDI flows to Africa doubled
during the 1980s to reach USD 2.2 billion in comparison with
the 1970s, they rose sharply to reach USD 6.2 billion in the
1990s and to USD 13.8 billion between 2000 and 2003.
Nevertheless, the continent accounts for less than 2 to 3 % of
world flows, having reached a peak of 6 % during the mid-
seventies, and less than 9 % of flows to developing countries, as
opposed to an earlier peak of 28 % in 1976.

(10) Cf. CESE 673/2007 ‘Migration and development: opportunities and

challenges’, Rapporteur. Mr Sharma, December 2007.

(11) Second joint EESC/UCESA meeting, Presidents' Conclusions (UCESA
— Union of Economic and Social Councils and Similar Institutions of
Africa).

(12) ‘Economic development in Africa’, UNCTAD Report, 26 September

2007.

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7.2.2.2
A specific characteristic of FDI flows to Africa is the
pull exerted by natural resources. This explains the unequal
distribution of FDI across the continent. Twenty-four African
countries classed as dependent on oil and minerals have received
on average three-quarters of FDI during the last two decades.

FDI needs to be re-directed, mainly, to the manufac-
7.2.2.3
turing sectors with a broad range of diversification of competi-
tive production facilitated by technological transfers. In order to
attract diversified FDI, and in order for them to be efficient,
Africa must keep up its efforts to create a generally facilitating
and attractive framework. Indeed, FDI will only take place and
contribute to development if certain prerequisites are met: the
quality of the economic fabric and infrastructure, size of the
relevant market — hence the importance of regional integration,
‘Human resources’), strengthening and
a trained workforce (cf.
stability of public authority and good governance. Moreover, in
order to be efficient, FDI must fit into a national economic
perspective and hence into the sub-regional, regional and world
perspective. To this end, a genuine national strategy must be set
out, as was the case in South-East Asia during the seventies and
eighties.

However, FDI cannot

law, respect for human rights, nor will

solve everything and will
7.2.2.4
certainly not bring about good governance, democracy, the rule
of
it put an end to
corruption, capital flight … In view of the foregoing, it is useful
to underline that FDI from China has increased significantly in
recent years, mainly as a result of diplomatic efforts, which
culminated in the Sino-African Summit. FDI
from China is
mainly focused on the extracting industries for the purposes of
securing raw materials to fuel its economic growth.

7.2.2.5
There has been a twenty-fold increase in Sino-African
trade during the last ten years, from USD 3 billion in 1998 to
USD 55 billion in 2006. However, viewed from the perspective
of African interests, the Chinese approach raises several ques-
tions. It often reassures governments with policies that are not
conducive to democracy, rule of law and poverty reduction (13).
From this perspective, the Darfur crisis is very telling, as is
China's attitude towards Zimbabwe. Furthermore,
from the
development perspective, the Chinese approach is daunting (cf.
Appendix III to this opinion).

EU Member States have a strong presence in Africa
7.2.2.6
in terms of investment. In order to build on this situation, the
following options could be considered:

— offer

tangible incentives to EU businesses,

for

instance

through import credits;

— use existing development instruments after reviewing and
strengthening them. For instance, strengthen the EIB's invest-
ment performance and facility, and improve its performance
in such a way as to make it a useful tool for the private
sector;

(13) The ACP-EU Joint Parliamentary Assembly: draft report on the Impact
of foreign direct investment (FDI) in the African, Caribbean and Pacific
States — Rapporteurs: Astrid Lulling and Timothy Harris, Kigali,
November 2007.

— set up an adequately financed investment guarantee facility/
body, as set out in Article 77(4) of the Cotonou Agreement.

7.3 SMEs as an economic investment tool

The private sector — its reinforcement and diversification — is
of capital importance for sustainable development, job creation
and hence for poverty reduction.

in most African countries there is,

However,
in a manner of
speaking, a missing link between, on the one hand, the informal
sector and very small enterprises (VSEs), which have more to do
with social survival than with economic generation as such, and
on the other hand, the branches of major foreign companies,
whose function is virtually autarchic and therefore contribute
little to the local economy.

This raises the question of how to foster the emergence of small
and medium-sized enterprises (SMEs), which would form the
basis of a coherent economic framework able to contribute to
developing a private sector, which is vital for the conti-
nent's development.

Fostering SME development mainly entails:

— strengthening regional

integration (cf. Point 7.8) to over-

come the limitations of local markets;

— reducing administrative burdens, increasing the credibility of
including immaterial
to their

the Courts, adapting infrastructure,
infrastructure
needs;

(communications

infrastructure),

— creating financing opportunities (cf. Point 7.2.1: endogenous
investment) for establishing and financing them; more speci-
fically, this involves improving the business environment, e.
g. by setting up market and marketing aid, providing them
with the support
financing
they need to meet
requirements, and increasing the range of financing opportu-
nities through greater use of the non-financial private sector;

formal

— the European Union needs to make SME development a
linchpin of it cooperation policy in Africa.
It should
endeavour, through its Member States and their companies,
to facilitate and promote the establishment of SMEs, mainly
by providing tax incentives for investment (tax credits, soft
loans, the EIB's role);

— through systematic technological transfers (know-how, infor-
mation), which might in due course give rise to research and
development programmes. Any European company entering
into a supply contract for equipment,
industrial products,
etc. should undertake to transfer its technology (Since this is
done with China in the nuclear and aeronautical sectors,
why not with Africa for less sophisticated products (even if
the financial stakes are lower)?;

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— through hiving off and by creating business incubators,
which could be encouraged by fostering entrepreneurship
during vocational training; and

long-term forecasts, and anticipate the major problems and chal-
lenges ahead for adapting vocational training to employment. In
general, the examples of emerging or recently developed coun-
tries, such as Korea, are edifying in this respect.

— by developing co-businesses or joint enterprises made up of
African and European components (capital, labour, manage-
ment, etc.)

7.4 Developing modern and competitive farming practices

Since farming,
fishing and forest management, are key
aspects of rural development, they should be the first stra-
tegic priorities for Africa's development. These sectors are
fundamental
to primary development and by their very
primacy, given the vast geographical areas they cover, they struc-
ture economic and social
life. Food self-sufficiency cannot be
achieved without rural development because it is a key area for
African economies, which helps stabilise populations and offers
in terms of job creation. With regard to the
great potential
importance of African agriculture — 57.2 % of the total active
population is engaged in it, as opposed to 5 % in industrialised
countries — it is striking that only 1 % of the 9th European
Development Fund has been dedicated to agriculture. This rein-
forces the argument that civil society has to be involved — and
farmers
Indicative
in particular — in drafting National
Programmes. By comparison, the World Bank has dedicated 8 %
of its resources to agriculture, which it has acknowledged to be
insufficient.

At a time when the international market price of raw materials,
and therefore of food, is rising, the gradual development of the
agricultural sector is all the more important and can only be
managed through the implementation of a serious, structured
agricultural policy based on short, medium and long-term plan-
ning. This policy should be assigned budgetary and finan-
cial priority in the broad sense of the term and should be
adapted to the specific constraints of each African country,
albeit within the context of an integrated regional approach.

In order to ensure optimum success for this policy, it must not
the involvement of
be drawn up and implemented without
African agricultural organisations and must,
in particular,
include safeguard mechanisms. For instance, does it make sense
for Senegal to import rice from Asia when riverside irrigation
potential is not properly exploited?

More specifically, a reasoned policy for promoting employment
in the agricultural sector could be based on the points raised in
Appendix IV.

The EU and its Member States, with their experience in voca-
tional training, and through targeted and selective funding with
guaranteed traceability, should play a central role. The European
Union has many educational projects in which African students
may participate. This is important because Africa's development
depends on well-educated people.

The various measures liable to place human resources at
the heart of employment promotion polices are set out in
Appendix V to this opinion.

7.6 Regional integration

It is generally agreed that there is considerable potential for
developing intra-African trade and creating larger economic
areas.

While regional and sub-regional economic integration has
progressed significantly, mainly through the establishment of
the African Union, trade potential has yet to be fully exploited.
Measures should be better coordinated in order to harmonise
customs procedures,
tariff and non-tariff barriers,
improve transport and communications by stepping up invest-
ment in regional infrastructure development, and guarantee the
free movement of citizens, primarily by abolishing visas. All the
foregoing would be implemented in the context of a land use
policy in order to ensure overall consistency.

reduce

Africa's economic development depends first and foremost
on deepening its internal market so that it is able to
develop the type of endogenous growth that would stabi-
lise and establish the continent in the world economy.
Regional integration and internal market development are
the pillars and springboards that will enable Africa to parti-
cipate positively in world trade.

From this perspective,
the Committee regrets that regional
negotiations on economic partnership agreements, which speci-
fically include economic integration among their objectives,
have not been concluded at the time of writing.

7.7 Social dialogue

7.5 Making human resources central to labour policies

Developing human resources is an indispensable factor in
all development strategies. Education and training play a key
role in this process by creating a flexible, versatile and good
quality workforce. This is why human resource planners,
in
cooperation with the socio-economic stakeholders, have to
analyse the job supply and labour market, make medium and

It is essential and central to creating decent and productive
jobs. This being the case, it should be an integral part of the
implementation of a common strategy. The full participation of
the social partners in social and economic life, particularly
through collective bargaining, is not only in keeping with the
requirements of democracy but is also a source of social devel-
opment, social peace and economic competitiveness. Social
dialogue is the privileged instrument whereby socio-economic
consensus conducive to development can be reached. Optimum

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economic development cannot be achieved without parallel
social development. These concepts
should be applied in
tandem to generate the growth needed for the total efficiency of
economic progress liable to improve lives and provide decent
jobs and public welfare. For this reason, there is a need to estab-
lish or foster trade union and collective bargaining freedoms,
and strong and independent employer and employee organisa-
tions with the capacity and technical know-how to fulfil their
roles thoroughly.

Agreement (EPA) concluded in December 2007,
is one
example worth following in Africa (cf. the final declaration
of the 25th Meeting of ACP-EU Economic and Social Interest
‘An Improved
Groups held on 4, 5, and 6 March in Brussels:
Partnership for a Better Development’.) In fulfilling the mandate
entrusted to it under
the EESC,
through its ACP-EU follow-up committee, has played a signifi-
cant role in contributing to coordination, joint discussions, and
the networking of organised civil society.

the Cotonou Agreement,

7.8 Organised civil society

Non-state actor involvement is indispensable for creating decent
jobs and should therefore be central to the common strategy.
Involving non-state actors not only meets the requirements of
participatory democracy but also contributes the on-the-ground
knowledge of those who trade, produce, and farm on a daily
basis. They should therefore be involved in drawing up the
National Indicative Programmes (NIPs) and the Regional Indica-
tive Programmes (RIPs) and should be considered as develop-
ment actors in their own right, benefiting from public develop-
ment aid and the capacity building provisions of the Cotonou
Agreement. In this context, it is worth recalling the third section
of EESC opinion 1497/2005 on the need for the structural and
even institutional organisation of organised civil society (plat-
forms, networks, committee …) in order to fix a time and place
for debating and defining courses of action. In this respect, the
establishment of a civil society consultative committee
Partnership
EC-CARIFORUM Economic
under

the

Brussels, 18 September 2008.

7.9 Good governance

is essential

‘Good governance’ is the key to investor confidence. From this
perspective alone it
for Africa's development.
Promoting democratic governance — required at all administra-
tive levels — is therefore central
to EU-Africa partnership
dialogue. It should be considered in its entirety and include
respect for human rights and workers' rights,
including trade
union freedoms, labour standards, the rule of law, institutional
building and bolstering state mechanisms, whose weaknesses
and inadequate capacity often hinder the implementation of
cooperation activities, civil society involvement in participatory
democracy or even action to combat corruption. On this last
point, the EU as well as its Member States should use the
partnerships to make financial aid contingent upon the
traceability of aid flows to the end-user, since out of a sum
of 100 billion dollars in annual aid, 30 billion disappears (14).
(Cf. points 3.6.1.5 and 7.2.1.3, final indent)

The President of the

European Economic and Social Committee

Dimitris DIMITRIADIS

(14) ‘Economic development in Africa’, UNCTAD Report, 27 September
2007, interview with the French Minister of State responsible for
Cooperation and Francophony, which appeared in ‘Le Monde’ on
16 January 2008.