Identifier
Created
Classification
Origin
09BRUSSELS1567
2009-11-23 11:10:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
USEU Brussels
Cable title:  

SNAPSHOTS FROM STOCKHOLM: EUROPEAN DEVELOPMENT DAYS

Tags:  EIND ETRD SENV EUR ECON EDEV TPHY TSPL EUN 
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ZNR UUUUU ZZH
R 231110Z NOV 09 ZDK
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHSS/OECD POSTS COLLECTIVE
RUEHZO/AFRICAN UNION COLLECTIVE
UNCLAS SECTION 01 OF 04 BRUSSELS 001567 

SENSITIVE
SIPDIS

STATE FOR EUR/ERA KESSLER, WILLIAMS
STATE FOR EEB/IFD/ODF NUTTER, LAITINEN
STATE FOR EEB/TPP/ABT/ATP CLEMENTS
STATE FOR NSC GAYLE MURPHY
STATE PASS TO USAID FOR NNICHOLSON, NOMEARA
USDA FOR FAS/OSTA FROGGETT
USDA FOR FAS/OCRA NENON
E.O. 12958: N/A
TAGS: EIND ETRD SENV EUR ECON EDEV TPHY TSPL EUN
SUBJECT: SNAPSHOTS FROM STOCKHOLM: EUROPEAN DEVELOPMENT DAYS

BRUSSELS 00001567 001.4 OF 004


UNCLAS SECTION 01 OF 04 BRUSSELS 001567

SENSITIVE
SIPDIS

STATE FOR EUR/ERA KESSLER, WILLIAMS
STATE FOR EEB/IFD/ODF NUTTER, LAITINEN
STATE FOR EEB/TPP/ABT/ATP CLEMENTS
STATE FOR NSC GAYLE MURPHY
STATE PASS TO USAID FOR NNICHOLSON, NOMEARA
USDA FOR FAS/OSTA FROGGETT
USDA FOR FAS/OCRA NENON
E.O. 12958: N/A
TAGS: EIND ETRD SENV EUR ECON EDEV TPHY TSPL EUN
SUBJECT: SNAPSHOTS FROM STOCKHOLM: EUROPEAN DEVELOPMENT DAYS

BRUSSELS 00001567 001.4 OF 004



1. (SBU) SUMMARY: Governance, aid effectiveness, and the impacts of
the global financial crisis and climate change on developing
countries were the major themes of European Development Days (EDD)
in Stockholm October 22-24. USAID Acting Administrator (AA) Alonzo
Fulgham led the American delegation and participated in a panel
discussion on trade and the private sector and attended an informal
dinner hosted by Swedish Minster for Development Carlsson. EU
officials repeatedly trumpeted their self-styled role as the world's
largest donor, but also cited the need for greater coordination
within the donor community writ large. While there was little
direct criticism of U.S. development policies, throughout the
conference, and with compelling testimonials, speakers called on
developed countries to acknowledge responsibility for many of the
challenges facing the world's poor as the result of climate change,
the international financial crisis, and high fuel and food prices,
and to provide assistance to help developing countries adapt to
those challenges. END SUMMARY

--------------
BACKGROUND
--------------


2. (SBU) An annual event organized by the European Commission (EC)
and the EU Presidency as a platform for dialogue and exchange on
international development issues worldwide, Development Days brought
together 5,000 participants from 125 countries, including Muhammed
Yunus, George Soros, and a number of presidents and prime ministers
from developing countries. The two-and-a-half day gathering, held
at the modern Stockholm International Fairs site, also featured a
development village, at which NGOs, government development agencies,
local and regional authorities, media, and multilateral institutions

held exhibits. Logistical arrangements were top notch. AA Fulgham
led the American delegation, which included representatives from
USAID Washington, USEU, and Embassy Stockholm.


3. (SBU) The agenda itself was ambitious in substance and breadth,
with many panel presentations delivering useful dialogue rather than
rote speeches, and only a few discussions falling short of the mark.
The three plenaries in particular, focusing, respectively, on the
impacts of the economic downturn, democracy, and climate change on
development, were rich in both talent and import, and often sobering
as personal and compelling testimonies brought home the reality of
the field. While there were frequent calls for accountability in
regard to the impact of both the financial crisis and climate change
on the poor and on developing countries, those wee less in the
interest of assigning blame and more about seeking shared
responsibility in finding fair solutions. A number of speakers
representing the EU called attention to a recent Eurobarometer poll
which suggested 9 of 10 Europeans currently supported development
assistance, with 72 percent saying the EU and member states should
do more.

--------------
MR. TSVANGIRAI'S EMPTY CHAIR
--------------


4. (SBU) Following the official opening of the conference by Crown
Princess Victoria of Sweden, Swedish PM Frederik Reinfeldt welcomed
attendees and lamented the absence of Zimbabwe PM Morgan Tsvangerai,
one of the conference's featured speakers, who was unable to travel
due to political turmoil in Zimbabwe. Citing a recent UN report, he
noted that despite "islands of economic recovery in an ocean of
uncertainty," one billion people continue to suffer from hunger as a
result of poverty aggravated by both the financial crisis and
climate change, the latter representing an even greater threat for
developing countries worldwide. Reinfeldt said it was apparent that
the climate was changing much more rapidly than predicted, and urged
countries to put aside national differences in December's Copenhagen
talks on climate change. The EU, Reinfeldt said, was "at the
forefront" of the climate change challenge and bore "the biggest
share of the burden".


5. (SBU) Nobel Laureate Dr. Rajendra Pachauri, Chair of the
Intergovernmental Panel on Climate Change (IPCC),outlined his
organization's projections for the climate in 2020 and its converse
effects on water supply and sea level rise: "Some will die of thirst
while others will drown." He said that Europe "represented the best
hope" for relief for developing countries, but added that even if
the G20 agrees in Copenhagen to ambitious targets to reduce
greenhouse gases "it will not be enough" and all countries "need to
do their share". EC President Barroso picked up the banner? of
European leadership and said the EU (and member states) "puts its
money where its mouth is" on development, providing "60% of all

BRUSSELS 00001567 002.4 OF 004


global assistance." He said, as "the first to unilaterally reduce
greenhouse gas emissions and the first to commit to aid developing
countries via support for climate change adaptation and mitigation,"
Europe has led the way.

-------------- -
WHAT THE EU CAN DO WITH AFRICA, NOT FOR AFRICA
-------------- -


6. (SBU) A star-powered plenary session focused on the response to
the global economic crisis and offered a lively debate on the
fitness of international finance institutions (IFI) and their
response to the crisis. Otive Igbuzor of ActionAid International
claimed "the age of the Breton Woods system "was beginning to show"
and said the system "failed to warn us about the financial crisis."
He called to task the IMF for loaning "a mere 1.6 percent" of its
post-crisis disbursements to sub-Saharan Africa, while giving 72
percent of those funds to developed countries, and said
multinational corporations were "reverse Robin Hoods" draining
African coffers of over $160 billion every year through tax
avoidance. George Soros, Chair of the Open Society Institute, said
that, while the International Monetary Fund (IMF) "did okay" in
cushioning the blows of the financial crisis, he said "it could do
more." He said the rich countries have no real use for Special
Drawing Rights (SDR) and proposed instead the IMF use SDRs to
provide more official development assistance (ODA) to least
developed countries (LDCs). Soros said the UK and France have used
their SDRs in this way and said Europe alone "could put together a
package of $100 billion" to use SDRs in this way.


7. (SBU) IMF President Dominique Strauss-Kahn said the IMF had
"returned to its origins with more flexibility and less
conditionality" in its lending and said the Fund "could discuss" the
Soros proposal. He said the leaders of the G20 understood that "a
glbal crisis calls for global solutions," but acknowledged that
still left 166 of the IMF's 186 members "outside the room" and that
"a greater voice in decision-making" needed to be extended to
African members in particular." Ngozi Okonjo-Iweala, Managing
Director of the World Bank, said the Bank "was a sprightly 65 years
old" and "had been quick to assist" early in the crisis, pouring $70
billion into 31 countries and getting Bank staff "on the ground" for
support and technical assistance.


8. (SBU) Nobel Laureate Muhammad Yunis, Managing Director of the
Grameen Bank, painted a more optimistic picture and said the crisis
represented an "opportunity to unpack and reconceptualize" the
global financial architecture. He stressed that "when two-thirds of
the world is left out of the financial system, the system is not
going to work." He said Grameen's success with microcredit
demonstrated the value of an economic strategy designed with the
needs of the poor in mind and that such a strategy could fund "a
whole slew of socially-focused businesses" that could alleviate
poverty and facilitate inclusiveness. African Development Bank
President Donald Kaberuka said the financial crisis "had undermined
the efforts of the African people to help themselves", and that "30
years of economic reform in Mauritius and Botswana has almost been
wiped out." But, he added, the reforms have put in place "an
improved business environment for a time when investors return."
Kaberuka said it would take time for the economy to recover, and
said the solution lay in "what the EU can do with Africa and not for
Africa."

--------------
FULGHAM LUNCH
--------------


9. (SBU) Acting USAID Administrator Alonzo Fulgham met on October 21
with key Swedish interlocutors from the government and the private
sector at a lunch hosted by the Ambassador to discuss coordination
of U.S. and EU development efforts and cooperation between the
military and development agencies in Afghanistan. Swedish
interlocutors included Development Cooperation Agency (Sida)
Director General Anders Nordstrom, influential Liberal Member of
Parliament Anders Widman, former Swedish Ambassador to Afghanistan
and Pakistan and current Chairman of the Swedish Afghanistan
Committee (SAC) Ann Wilkens, Folke Bernadotte Academy Director
General Henrik Landerholm (Note: the academy trains Swedish police
and civilians that will work in Afghanistan),Jan-Joel Andersson,
Head of the Swedish Institute of International Affairs, and two
members of the Swedish media who report on Afghanistan.


10. (SBU) Fulgham emphasized the importance of coordinating aid
efforts, noting that the U.S. and the EU provide nearly 80 percent

BRUSSELS 00001567 003.4 OF 004


of development assistance in Afghanistan. Liberal Member of
Parliament Alan Widman said he did not believe that foreign
development assistance would be a key issue in Sweden's 2010
national elections, but noted that Swedes were becoming increasingly
concerned about using their tax "kronor" effectively in foreign aid.
On October 24, Sweden announced that it would renew its commitment
to Afghanistan, but would not increase troop levels significantly.

-------------- --------------
AA FULGHAM: PRIVATE SECTOR PRIME ENGINE OF GROWTH FOR DEVELOPMENT
-------------- --------------


11. (SBU) Acting Administrator Fulgham also spoke at the Trade and
the Private Sector Panel event. CNN's Veronica Pedrosa moderated
the event that offered a range of speakers, including Sweden's Trade
Minister Bjorling, UN High Commissioner for Human Rights and former
President of Ireland Mary Robinson, World Bank Managing Director
Ngozi Okonjo-Iweala, ITUC (Regional Labor Union in Africa) Senior
Economist Bohvi Kouglo Lawson Body, and General Electric's President
and CEO for the Nordic Region & Baltic States Hans Enocson. Fulgham
emphasized the need for strong stakeholder engagement in host
countries. In his view, important stakeholders include leading
government officials with a strong political commitment, a good
Finance Minster, sound central bankers, an active private sector,
and engagement of secondary ministries. He added that the private
sector will be the primary engine of growth to push developing
countries out of recession. Also, he highlighted the need to
enhance the transatlantic dialogue on development as a means to
increase the effectiveness of donor funds.


12. (SBU) Mary Robinson recognized the Ethical Globalization
Initiative, which contains articles on the right to work as a basic
human right, as well as on freedom and equality. In that regard,
corporations must look at fair labor standards and efforts to
increase employment. She said she would also like to see greater
attention paid to increasing informal sector engagement and ensuring
that small businesses are free from predatory government practices.
General Electric's Enocson projected his company's vision of
creating products that would facilitate lower global emissions and
increase efficient water usage. Additionally, Enocson believes
local level talent must be developed to make their business in
developing countries sustainable. World Bank Managing Director
Okonjo-Iweala stressed the need for developing country ownership.
She also spoke somewhat off the record by outlining her cynicism
regarding a possible breakthrough in the Doha development trade
round and on the Extractive Industries Transparency Initiative,
which she believes countries are gaming. She advocated for more
frank discussions to arrive at more realistic policies and programs
to achieve bigger impacts on the ground.

-------------- --------------
PANELS: AT NO OTHER TIME IN HISTORY HAVE WE SEEN SUCH A NEED TO
COOPERATE
-------------- --------------


13. (SBU) USDEL was not able to cover all other 25 side events and
panel presentations during the conference, but a few stood out. In
a roundtable on "Beyond the Millennium Development Goals (MDG):
European Development Cooperation After 2015," Andy Sumner of the
Institute for Development Studies (IDS),said the recent fuel, food,
and financial crises signaled "the end of a relatively benign
period" for the global economy and said development cooperation must
adapt to new realities. He said "big game changers in global
governance, demographics, climate change, technological advances,
and volatile markets have become the new norm." Francesca Mosca,
Director of the EC's EuropeAid Cooperation Office, said the donor
community "must move away from supply side donor priorities to the
demand side partnerships" if the MDGs were to be realized by 2015
and beyond. Jean-Louis Sarbib, Director General, Development
Gateway, called for "a redefinition of the MDGS" that were more
"partner-focused," as the priority of development for rich countries
was to use it "to solve their own problems." He said more
coordination was needed, as "donors run after the same ball and
chase the same trends". Elizabeth Sandor, Senior Policy Advisor at
the Organization for Economic Cooperation and Development (OECD),
noted the "vital role" of the private sector in development, but
said it was curious that the sector "was not very much here" in the
conference agenda.


14. (SBU) At the behest of moderator Anders Wijkman, Vice-Chair of
the Tallberg Foundation, panelists at the roundtable on "The
Copenhagen Climate Deal and the Right to Development" dropped their
prepared remarks and dove into the substance. Wijkman posited that

BRUSSELS 00001567 004.4 OF 004


the problem was greater than climate change and that the result at
Copenhagen should be "a sustainable development agreement." Firmin
Adjahossou, Programme Officer at SECAM, agreed that a more holistic
approach was necessary but said "no platform existed that brings
researchers, decision makers, and communities together" to make such
an approach feasible. Clarisse Siebert said "at no other time in
history have we seen such a need to cooperate" but lamented the
"what's in it for me" positions already "telegraphed by some" ahead
of the talks. Henrik Grape of the Church of Sweden said that
climate change was a fact and that "to apply a political compromise"
that would "enable the industrialized world to avoid their
obligations to adapt to a climate-constrained world," would have
fatal consequences for the developing world.


15. (SBU) At a session on "Beyond Aid: Is our Aid Focus too
Narrow?," panelists spoke frankly about the relevance of official
development assistance in addressing today's global challenges, such
as security and climate change. Bern Eisenblatter, Managing
Director Germany's GTZ, questioned the direction of the aide
effectiveness agenda as defined in Accra, arguing it is too focused
on coordination amongst donors, as opposed to between donors and
partners, and that it limits diversity and removes healthy
competition among donors. He called for a new paradigm for
"development" effectiveness that focuses on the transformation
process. Christian Aid's Jonathan Glennie said the issue is broader
than aid, it is about development finance, such as the Tobin Tax,
which has the potential to generate far greater resources. The
World Bank's Chief Economist for the Africa Region, Shantayanan
Devarajan, noted that ODA is political and said "taxpayers need to
believe it is in their interest. This gets in the way of aid
effectiveness." Koos Richelle, Director General of the EC's
EuropeAid Cooperation Office, said that the aid industry often
benefits more than the intended recipients, whose "governments spend
more time managing aid programs than helping the poor." UN Resident
Coordinator for Africa, Aeneas Chuma, said that, despite flaws, aid
will continue to be part of the overall package with investment,
trade, etc., but that its importance will decline over time.
Several expressed concern with the culture of aid dependency. The
discussion mirrored a plenary debate on whether a modest or radical
change was needed to the current aid paradigm. All agreed some
change was needed.

-------------- -
CLOSING PLENARY: MY COUNTRY IS ON THE VERGE OF DROWNING
-------------- -


16. (SBU) Pleas for support for developing countries on mitigation
of and adaptation to climate change dominated the closing plenary on
"The Road to Copenhagen and Beyond." Citing the impact of
increasing numbers of hurricanes and cyclones affecting her country,
former Prime Minister of Haiti Michele Duvivier said "the vulnerable
are not looking for a gift, but need some fair and just reparation
for the harm we have suffered." Micronesian President Emanuel Mori
told the plenary "my country is on the verge of drowning" due to
rising seas, and said that while he does not think it is too late to
save Micronesia, he said Micronesians are considering relocation as
a serious option. Mary Simon, President of the Inuit Tapirrit
Kanatami, said her country was seeing firsthand the "terrifying"
consequences of climate change and said that "environmental changes
were coming faster than the Inuit's ability to respond".

--------------
COMMENT
--------------


17. (SBU) If nothing else, European Development Days served to
underscore the need for the donor community to rapidly and
creatively respond, given its own crises-driven constraints, to a
multitude of challenges facing the developing world. Given our
roles as the largest donors, the U.S.-EU agreement at this
November's US-EU Summit to pursue a broader and more
institutionalized development dialogue could not be timelier. With
its writ to enhance coordination on food security, climate change,
and the MDGs, the High Level U.S.-EU High Consultative Group on
Development should enable a stronger and more coherent response that
mitigates these challenges, provides a lifeline to those most in
need, and offers hope to the developing world.

MURRAY