The Week in Europe
By David Jessop

Sometimes it seems as if the European Commission (EC) has invented a
language of its own. Jargon, related to development in particular, has
become an art form, obscuring meaning. A recent example is the term
'capacity building'.

What this expression refers to is the ability of any organisation, public or
private, to be able to deal with the problems it is facing. Usually the
expression is used in the context of international trade negotiations or the
ability of a nation or industry to create a competitive economic
environment. Thus capacity building is about the provision of support by
external entities to Government, the private sector and organised economic
groups to enable them to successfully articulate their needs in
international negotiations or to be able to restructure economies or
businesses.

Trade capacity development in particular has become a politically important
issue. This is because countries that can not translate the views of their
business communities into well thought through and presented arguments for
trade negotiators, stand virtually no chance of success in international
trade negotiations.

For example, if an industry, say rice, has a regional association that is
unviable it will not be able to obtain, mobilise or disseminate the
information necessary to understand what is happening in international trade
negotiations. It will not then be able to determine how regional trade
negotiators might address its needs. It will not be able to undertake the
research to produce the position papers to properly inform governments or
negotiators. Its case will most probably go by default though lack of input
when its issues come to be discussed. The effect will be that the industry
will almost certainly cease to be competitive and in time, in open markets,
may collapse taking with it a significant part of the economy within which
it is located.

It does not take much imagination to see that unless the issue of capacity
is addressed quickly, small developing countries will have little chance of
succeeding against the industries, lobbyists, trade associations, trade
lawyers and teams of negotiating specialist that nations from the US to
Brazil and India are able to mobilise fight for their interests.

This has resulted in the developed world recognising politically that it
must help build capacity so that the Caribbean and other nations can better
voice their trade requirements. This has led to announcements by the EC, at
the WTO, in the UN, and by others that large sums will be made available for
this purpose.

Despite this, what is emerging is a mismatch between this politically driven
policy and those in development bureaucracies who deliver assistance.

An example of this is the EC's Euro 20m capacity building fund for the ACP.
This was first announced politically in late 2000. Its objective was to
assist ACP regions prepare rapidly for the next trade negotiations with the
EU. These begin formally in September 2002 and will be for economic
partnership arrangements between the EU and yet to be agreed configurations
of nations in the ACP. A separate Euro 10m fund has also been announced to
help the ACP prepare for negotiations at the WTO. These begin in January
2002.

Despite this there is still no sign of the money being made available for
ACP regions and their industries. Nor it seems is any sensible mechanism in
place for rapid disbursement that might enable an industry or an association
in a region such as the Caribbean to develop enough capacity to determine a
negotiating position.

The irony is that this is happening as the EC's Trade Directorate is just
putting the finishing touches to a European negotiating strategy for
eventual agreement among member states most probably just after Easter. The
result is that those Caribbean industries that are forward looking have
already found other mechanisms to part finance the development of position
papers while others whose voices need to be heard remain mute.

Why this should be points to a fault line in the present consensus on
development policy. In the developed world, development policy is driven by
pro poorest policies. In contrast, in many more developed, developing
nations the politics and economics of globalisation and the need for success
in maintaining and developing markets now drives the demand for development
support. In many respects the two concepts are incompatible.

As a recent discussion paper on capacity building published by the European
Centre for Development Policy Management pointed out: The case needs to be
made within the donor community and also the implementing agencies, for a
positive link between trade and investment.... and the wider development and
poverty reduction agenda on the other.'

The approach to capacity building well illustrates this contradiction.
Capacity building seeks to benefit those groups in developing nations that
most development agencies abhor, namely those who are not poor and who have
been successful in business or are in newer industries such as financial
services or tourism. It results also in a paradox: The developed world
trying to pay the developing world to outsmart the developed worlds trade
negotiators.

Moreover, as the EC examples suggest, the bureaucratic processes associated
with pro-poorest development are so hedged around with arcane processes and
measurements that programmes are unlikely to be delivered until well after
most international trade negotiations have begun. Moreover, most
interventions of this kind do not have quantifiable outcomes of the kind
development agencies seek.

What this reflects is a fundamental failure of many engaged in the delivery
of development to understand how international trade negotiations and market
liberalisation relates to development. There seems to be little realisation
that the transition periods involved in international trade negotiations are
finite; that the objective of capacity building is principally to help those
who are already moderately successful to survive; that this is a catalytic
process; that it is not a traditional development process in which the rules
of equity or social justice can be applied easily; that outcomes are
unlikely to be quantifiable; or that failure in international trade
negotiations will carry a huge cost for the developed world if the
marginally better off revert again to being the poorest.

David Jessop is the Executive Director of the Caribbean Council for Europe
and can be contacted at [log in to unmask]
December 14th, 2001

Dr. Amanda Sives
Project Officer - Election Observation
Commonwealth Policy Studies Unit
Institute of Commonwealth Studies
28 Russell Square
London, WC1B 5DS

Tel: +44 0207 862 8865/ 0208 744 1233
Fax: +44 0207-862-8820
Website: http://www.cpsu.org.uk