In 2012, the European Parliament received on its table a proposal for reform of development cooperation in Latin America from the Commission. This, based on in-depth macroeconomic analysis, declared that these countries were now part of the so-called "middle-income countries" category, in other words, which benefit from a growth rate and a GDP per capita considered important enough to no longer need so-called “classic” development aid.
In a world affected by a global financial and economic crisis, these countries stand out with record growth rates ranging from 2 to 5 %! This new definition of cooperation therefore proposes a drastic reduction in development aid allocated to the continent... However, despite these indications of presuppositions of wealth, it is clear that the reality on the ground is far removed from the official discourse. While it is true that socio-economic and political progress has been recorded in recent years, one in three inhabitants of the continent still lives below the poverty line, or nearly 180 million people. These countries have among the highest rates of inequality in the world. Thus, the reduction of poverty and the fight for social cohesion must still remain objectives to be achieved in the relations that bind us with this continent. In view of the challenges that arise, the Parliament opposed the European Commission through a resolution calling on it to reconsider its position. Despite a nature which makes it lean more to the right of the political spectrum, the assembly underlined the importance of adopting different measuring instruments, which make it possible to take into account the particular realities experienced in each country as well as the needs specific to decide on the allocation of development aid. The countries hardest hit by this reform are expected to be Ecuador, Colombia and Peru. According to the rapporteur of the resolution, parliamentarian Ricardo Cortès,“The Commission's approach is too radical, because the criteria which guide it are purely economic. We believe that the full level of support for cooperation in Latin America should be maintained, with a reallocation of funds towards the least developed countries in the region.
The LAIF is a mixed mechanism, combining non-repayable grants and loans granted by the European Union to private sector institutions. This initial sum thus allows beneficiaries to seek more from larger donors, such as regional investment banks.For the period 2009-2013, the LAIF is counting on a budget of 125 million euros intended for infrastructure projects (roads, energy), green economy, environmental protection as well as reduction of poverty. On March 21, 2013, a coalition of European NGO networks, including CIDSE and CIFCA with which Justice and Peace works closely, presented to all political groups in the European Parliament a study on the real impacts of this new form of cooperation and thus threw a wrench in the pond by asking “who really benefits from the new development cooperation?” » The findings are alarming. Of the 10 projects already financed by the mechanism, Camilo Tovar, economic consultant, focused particularly on 4 of them. According to him, “we do not observe a direct link between the LAIF and the reduction of poverty and inequalities in Latin America. Priority is given to economic growth through investment in infrastructure.” And Camilo Tovar gives the very concrete example of a wind farm located in Oaxaca, Mexico:
The LAIF awarded a grant of 3.3 million euros to an energy consortium made up of the Italian giant Enel. The green electricity production project, however, generates negative impacts: the proposed employment is not sustainable, electricity prices have increased in all directions, and above all, entire indigenous populations have been displaced for the needs of the exploitation thus leading to a breakdown of productive activities and social disintegration.In reality, the energy produced on the site is mainly reserved for the two multinationals Nestlé and Femsa (subsidiary of Coca Cola). Thus, the promise of cheap, green energy granted to local populations is reduced to nothing. The European subsidy, if it remains marginal compared to the final financial package, enabled the consortium to raise additional financing of 76 million dollars from the Inter-American Development Bank... If European and Latin American civil societies remain entirely in favor maintaining traditional development cooperation, that is to say bilateral aid granted by the European Union to Latin American governments and civil society, they are not devoid of proposals to improve the mechanism of LAIF, although they consider the fact of entrusting the private sector with responsibility for development aid to be imperfect in itself.
