The European Union’s new approach to development aid is predicted to produce “a plethora of trade deals” in the coming years.
ECR MEP Nirj Deva said the use of EU development funding to leverage private sector finance and expertise through involvement in public-private partnerships and by helping small businesses bring projects to market, would boost the economies of developing countries. This in turn will increase trade and create opportunities across the globe.
Addressing the historic, first-ever, Commonwealth Trade Ministers Conference, 37 of whom are signatories to EU -ACP Cotonou Agreement, Mr Deva, Vice-Chairman of the European Parliament’s Development Committee, said: “It is my belief that by creating new jobs, new products and new wealth, we will not only increase intra African, intra ACP and intra Commonwealth trade, but enable these nations to trade across the globe with the emerging giants of the BRIC nations and of course the UK and the EU.
“I anticipate a plethora of new trade deals.”
Last year the European Parliament adopted Mr. Deva’s Legislative Act “Private Sector Investments in Development”, which switched the EU’s focus away from sending grants to developing countries and instead using aid to encourage further investment. Already €4.1 billion of EU aid has leveraged €62 billion of investment funds.
Deva said: ‘Harnessing the expertise and significant resources of the private sector is the only way to deliver real change; promising a modern Marshall Plan for Developing Countries and stimulating sustainable job creation.’
‘Eventually the total aid budget, previously handed out as grants of €23 billion a year, will be leveraged into €300 billion of Investments, delivering on jobs and a sustainable future for billions of people around the world. To many this was magic, conjuring money out of thin air. To City bankers, this was common, everyday stuff; leveraging investment funds from deposits.’
Mr Deva added: ‘How we structure the trading environment in the current climate of anti-globalisation and manage expectations that provide the “greatest good to the greatest number” while “giving maximum benefit to uplifting those who are the most disadvantaged in our societies,” will be the challenge of our generation.’
“Instead of giving people fish to feed them, we are giving them nets and teaching them to fish.”