The European Union and the Philippines share one very important thing: one vision. In our shared vision, every man, woman and child, no matter where they live in the world, enjoy a decent life.
In the year 2000, the international community agreed on a set of goals to step up global efforts in the fight against poverty, the Millennium Development Goals (MDGs).
At the time, the intermediate economic growth in the Philippines did not permit a reduction in poverty levels, and yet since then the progress toward the MDGs has been remarkable.
The Philippines successfully improved several policies and reached many targets, from the promotion of gender equality in education to improvements in combating HIV/AIDS and other diseases, or the reduction of child mortality rates. The European Union, through its P57-billion development assistance over the last 20 years, has contributed to reach these objectives. The example of the Philippines in attaining the MDGs is nevertheless remarkable.
The Philippines is now a middle-income country and experiences a much higher level of growth which may reduce further the incidence of poverty, especially if growth is inclusive because it creates opportunities and promotes participation for all. The European Union remains committed to the progressive eradication of poverty through supporting the country in pursuing inclusive and sustainable growth for human development in the context of the rising Philippine economy, and the changing needs of the whole world.
As it is clear for me that there can be no development without security, the European Union has also done its most to support peace and increase stability in the Philippines, and especially in the fragile areas such as Mindanao. I am glad that during my visit on Nov. 10-12 I will have the opportunity to discuss this topic and reaffirm the European Union’s commitment to improving security.
We are now facing two questions. Firstly, since the target date to reach the MDGs is fast approaching (2015), we need to agree on the global development agenda that will follow. Secondly, we need to find out how we can use international financial assistance resources more effectively in combination with domestic and other resources to achieve that agenda.
As regards the first question, in the years to come, we all need to make sure that the world does not lose sight of the fundamental objective to eradicate poverty. But we will also need to respond to the challenges of social and economic exclusion, climate change, and global environmental degradation. A single set of goals and targets is the right way forward to address poverty eradication, exclusion, and sustainable development in an integrated way.
As for the second question, I believe that development aid can continue to play an important role not only for least developed and low-income countries but also for middle-income countries. In middle-income countries, the focus of our assistance will shift to supporting the development of conditions for economic growth which is sustainable and creates opportunities and improves the livelihoods of those who need it most. International assistance constitutes only 2 percent of the total financing in developing countries. We need to make full use of the comparative advantage of all available resources, be they domestic or foreign, public or private, so they can maximize their overall impact on development results.
In this context, the European Union is promoting the so-called “blending,” which combines EU grants with loans or equity from other public and private financiers. This is an important vehicle for leveraging additional resources and increasing the impact of EU aid. Another innovative way, known as sector budget support, is to support the fiscal space for reforms in government budgets through grants while engaging in a dialogue to improve national policies in a specific sector. This results-oriented financing approach ensures that the reforms that take place are sustainable and in accordance with government priorities.
There are no quick fixes in development, and even less in inclusive development. What is needed are reforms that tackle the causes rather than the symptoms. This is not only more effective but also cheaper.
International aid can continue to support countries in pursuing reforms that build inclusive and cohesive societies. The European Union will continue to be on the front line in this endeavor.
Andris Piebalgs is the European Union’s commissioner for development.