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Continued economic expansion and general human development have brought poverty down substantially in recent decades. However, progress has been geographically uneven, and economic growth has left large numbers of people in low and middle-income countries living only fractionally above the poverty line.
Discussions on progress towards the Millennium Development Goals, and a new global agenda and framework for development post-2015 have rekindled the debate on how best to tackle poverty and inequality. There is now substantial evidence to support the argument that growth reduces poverty faster and more sustainably where equality is greater, or if inequality is reduced at the same time. Redistribution does not need to hamper growth, and inequalities can indeed be tackled.
Tackling poverty and inequality is at the heart of Europe’s own integration project. It is the main driver of EU’s external action, which promotes a world vision based on the values of social justice and protection, solidarity, and economic, social and territorial cohesion, with an overall objective: the eradication of world poverty.
Indeed, greater welfare and equality beyond Europe is in the EU’s own self-interest: besides contributing to economic growth, investment and improved governance in developing countries, it contributes to achieving EU security, migration and asylum policy objectives. Additionally, efforts in this area help the Union remain a key global player in the provision and protection of global public goods.
Unfortunately, the EU – like other donors - struggles to demonstrate impact on poverty and inequality. Developing a much closer connection between its global poverty eradication objective and its policies across different investments, sectors and actions remains a challenge. Two fundamentals are: the need to pay attention to its own evaluations, which suggest that much work does not contribute significantly to addressing chronic poverty, stopping impoverishment or sustaining escapes from poverty – the objectives which need to be achieved if extreme poverty is to be eradicated; and to base its work on the best understandings of how poverty can be eradicated.
If the new EU leadership wants to make a difference in the eradication of poverty, it will need to frame its own poverty eradication policies as well as the goals and targets in the post-2015 development agenda in terms of the key measures which address chronic poverty, prevent impoverishment and sustain escapes from extreme poverty. It could also promote the inclusion of an income inequality target in the post 2015 framework (with details to be defined at national level).
To be effective, EU interventions should also be grounded on a solid analysis of the dynamics of political change and resistance to pro-poor reforms in partner countries. A new report from a group of leading think tanks (www.ettg.eu) explains the EU should adopt a poverty dynamics approach in identifying suitable sectors and programmes in partner countries.
The EU should ensure that the programming and implementation of the Partnership Instrument targets outcomes that contribute to poverty eradication in terms of, for instance, standard setting for decent work.
Sharing the positive elements and lessons from the European social model is key when exploring new and existing strategic partnerships with emerging countries, and when conducting political dialogue with countries phasing out from development assistance.
It should further extend joint programming with EU member states and work with them to maximise the focus on the reduction of poverty and inequality of all EU international cooperation.
Ensuring that those countries in which aid is being phased out have a clear ‘destination’ of graduation, including making sure that not all instruments are withdrawn (particularly aid and aid-for-trade) simultaneously, is also important.
As part of the implementation of the Agenda for Change, the EU should keep the list of countries to which it provides aid under review and use opportunities such as the Mid-Term Review in 2017 to make further adjustments to the list.