FEDERATIVE REPUBLIC OF BRAZIL- EUROPEAN COMMUNITY
REVIEW AND RECOMMENDATIONS FOR A COUNTRY STRATEGY PAPER 2007-2011 AND NATIONAL INDICATIVE PROGRAMME [FIRST PHASE]
CONSULTANTS’ FINALIZATION REPORT APRIL, 2005
Brian Thomson Mission Chief Miguel Lebre de Freitas Economist Alain Peigné Sociologist
EUROPEAN COMMISSION
AIDCO/ RELEX
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ACRONYMS USED ... III EXECUTIVE SUMMARY ... IV
CHAPTER 1... 1
MAIN POLITICAL, ECONOMIC AND SOCIAL DEVELOPMENTS IN THE COUNTRY... 1
1. INSTITUTIONAL SUSTAINABILITY... 1
2. GOVERNANCE AND TERRITORY... 1
3. ECONOMIC DEVELOPMENTS... 2
4. THE SOCIAL COHESION SITUATION IN BRAZIL... 4
5. BRAZIL’S POLICY AGENDA... 6
CHAPTER 2... 8
EC/EU POLICY OBJECTIVES AND COMMITMENTS ... 8
1. OVERVIEW... 8
1.1. GENERAL OBJECTIVES OF THE EUROPEAN COMMISSION... 8
1.2 OBJECTIVES AND PRIORITIES OF THE COMMUNITY’S POLICY... 8
1.3 HORIZONTAL ASPECTS... 9
2. ATTAINING EXISTING INTERNATIONAL COMMITMENTS... 9
2.1 MILLENIUM GOALS... 9
2.2 TRADE AND DEVELOPMENT... 9
3. OBJECTIVES CONCERNING LATIN AMERICA... 10
3.1 OBJECTIVES CONCERNING MERCOSUL... 11
3.2 OBJECTIVES CONCERNING BRAZIL... 11
3.3 SPECIFIC BI-LATERAL PROJECTS IN BRAZIL... 12
4. SIGNIFICANT ECPOLICY/OPERATIONAL CHANGES... 12
4.1 N+3BUDGET EXECUTION DECISION... 12
4.2 DECONCENTRATION DECISION... 13
4.3 SCIENCE AND TECHNOLOGY AGREEMENT... 13
4.4. NEW MEMORANDUM OF UNDERSTANDING (MOU) ... 14
5. REGIONAL BILATERAL PROGRAMME -MERCOSUL... 14
6. AIDCOHORIZONTAL PROGRAMMES ... 15
CHAPTER 3... 16
RESULTS, PERFORMANCE AND LESSONS LEARNED... 16
1. OVERVIEW... 16
2. REVIEW OF THE IMPLEMENTATION OF THE CURRENT CSP... 16
3. ISSUES OF COHERENCE AND COMPLEMENTARITY... 22
4. AMAJOR ISSUE FOR THE FUTURE OF ECCOOPERATION WITH BRAZIL... 23
CHAPTER 4... 23
ASSESSMENT OF COMPLEMENTARITY WITH OTHER DONORS... 23
1. OVERVIEW... 23
2. PRINCIPAL DONOR COOPERATION WITH BRAZIL... 24
3. EUBILATERAL DONORS ... 26
3.1 MAIN SECTORS OF COOPERATION... 26
3.2 FUTURE COOPERATION... 27
3.3 MODUS OPERANDI OF COOPERATION/MODALITIES... 28
CHAPTER 5... 29
CHALLENGES AND CONCLUSIONS... 29
1. BRAZIL IN THE WORLD AND ITS FUTURE PERSPECTIVES... 29
2. EUINTERESTS IN BRAZIL... 30
3. THE CHANGING CONTEXT AND STABILIZING PARAMETERS... 30
4. KEY CHALLENGES... 31
4.2 SOCIAL... 32
4.3 POLITICAL... 32
4.4 MANAGEMENT OF GOVERNANCE... 32
4.5 AVOIDING THE PITFALLS OF DISPERSAL AND ENSURING CONSISTENCY... 33
5. ASTRATEGIC VISION FOR FORMULATING A NEW CSP:POSSIBLE ECAPPROACHES AND POSSIBLE BRAZILIAN COUNTERPARTS... 34
5.1 DIFFICULTIES IN INTEGRATING EC AND EUPOLICIES... 34
5.2 THE COMMISSION’S DELEGATION AND HEADQUARTERS PERSPECTIVES... 34
5.3 ASTRATEGY FOR DELIVERY AND USE OF COOPERATION ... 36
6. THE CONCEPTUAL STRUCTURE OF CLUSTERS AS A BASIS FOR CSPFORMULATION... 38
6.1 POLICY-MIX CLUSTER 1–PUBLIC MANAGEMENT AND GOVERNANCE... 40
6.2 POLICY-MIX CLUSTER 2–PUBLIC/PRIVATE MANAGEMENT AND INNOVATION IN PRODUCTION PROGRAMME... 41
6.3. IN-DEPTH QUALITY ASSURANCE OF ECCOOPERATION... 42
6.4 DELIVERY MODES... 43
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ACRONYMS USED
ABC/MRE Agencia Brasileira de Cooperação, Ministério das Relações Externas (Brazilian Agency for Cooperation at the Ministry of External Relations).
ABONG Associação Brasileira de Organizações Não-Governamentais (Brazilian Association of Non-Governmental Organizations)
CDES Conselho de Desenvolvimento Econômico e Social (Council of Economic and Social DEvelopment)
COFIEX/MPO Comissão de Financiamentos Externos, Ministério do Planeamento (Commission of External Financing of the Ministry of Planning) CSP Country Strategy Paper
DhESC Plataforma Brasileira de Direitos Humanos Econômicos, Sociais e Culturais (Brazilian Platform of Economic, Social and Cultural Human Rights)
ESAF/MF Escola de Administração Fazendária, Ministério da Fazenda (School of Financial Administration at the Ministry of Finance)
EU European Union
EC European Commission
FUNAI: Fondation Nationale des Affaires Indigènes (Government’s Native American Affairs Agency)
HDI o IDH United Nations’ Human Development Index IDB or IADB Inter American Development Bank
IBGE Instituto Brasileiro de Geografia e Estatística (Brazilian Institute of Geography and Statistics
IPEA Instituto de Pesquisa Econômica Aplicada (Institute of Applied Economic Research
ISA Instituto Sócio Ambiental (Social Environmental Institute) LAC Latin America and The Caribbean
MDIC Ministério do Desenvolvimento, Indústria e Comércio Exterior (Ministry of Development, Industry and Trade)
MoU Memorandum of Understanding
MST Movement of People Without Land NFR New EC Financial Regulation
NSA Non State Agency
ODM o MDG Objetivos de Desenvolvimento do Milenio (Millenium Development Goals) NGO Non Governmental Organisation
NIP National Indicative Programme PIB/GIP Gross Internal Product
PGFN Attorney General’s Office of Treasury
PPA Plano Plurianual do Governo (Multi Annual Government Plan).
SEAIN/MPO Secretaria dos Assuntos Internacionais, Ministério do Planeamento (Secretariat for International Affairs, Ministry of Planning)
SEDH Secretaria Especial dos Direitos Humanos (Special Secretariat for Human Rights)
SEGES/MPO Secretaria de Gestão, Ministério do Planeamento (Management Secretariat, Ministry of Planning)
SIAFI Sistema Integrado de Administração Financeira do Estado (Integrated system for public finance management).
STN Secretaria do Tesouro Nacional (Treasury) .
UN United Nations
WB/IBRD World Bank
WTO/OMC World Trade Organisation
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Executive Summary
1Brazil and the EU/EC in the Future
The papers presented at the November 2004 “Recife” Seminar, organized by the Brazil EC Delegation, provide an extremely qualified background for this perspective, and are assumed by the Mission as per the following virtual quotes. Brazil must be viewed as contributing to Mercosul integration and supporting South American integration.
Although Brazil contributes to regional stability it is also in a hemispheric contest with the US 2 . It is affirming its position as a world player by engaging in actions with other developing countries (India, South Africa, China, Egypt) and within the G-20 and the G- 3. Brazil is also seeking a balance in relation to the US and the EU/EC. It is also providing strong support to the multilateral system (Congo, Haiti), but is also viewed at the same time with concealed suspicion by its neighbouring South American nations. As far as Brazilian interests in the EU/EC are concerned, the “Recife” seminar highlighted the questions of the EU/EC being an important export market and source of investment, with all Mercosul eyes focused on the hopeful approval of the EU-Mercosul Agreement, currently stalemated on the issue of agricultural exports and subsidies. In addition, the Mission found, in its meetings with high level government officials, Brazil’s interest in acquiring access to, and learning to adapt to its needs, the EUs experience in the planning, management and operation of federative integration policies. Regarding EU/EC Interests in Brazil, again in quasi-quotes from the “Recife” Seminar papers, these interests can be summarized as: finalizing the current negotiations on the EU-Mercosul Trade Agreement; coincidence with Brazil’s goals of sub-regional and regional integration, and regional stability; encouraging Brazil to adopt a coherent and constructive attitude among developing countries in WTO negotiations and coordinating technical standards in the fields of digital TV, GSM and the Galileo Project.
In the area of security the questions of non proliferation, conflict prevention and strengthened multilateralism, are also of high EU.
Updated political, economic and social analysis Political
Brazil is undergoing a substantial process of institutional change, which most likely will bring about a period of political untidiness that will probably make it difficult for a social reform and environmentally directed government to do its job. The fact that Brazil is still far from being a unified and intergrated political whole is the case of most, territorially large, federative states (including a possible future federated 25 nation EU). These states tend to generate not only political diversity but complicate this dimension with the added overlay of the effects of differing economic and social interests of the different federated states; 27 in the case of Brazil.
1 This Finalization Report is Based on an extensive Provisional Report delivered to the Commission (AIDCO and RELEX) prior to the March 22 debriefing session which the Mission Chief attended at EC Headquarters. All the statements made in this Finalization Report are fully substantiated by the data accumulated, processed and analyzed for the formulation of the aforementioned Provisional Report.
2 Witness the recent Brazilian victory at the WTO where it defeated the US position on cotton subsidies in the US market.
v Economic and Social
From the perspective of economic issues, although there are potential macroeconomic instabilities on the horizon, the future at least at policy level is signposted with exciting initiatives. Among these is the Brazil de Todos policy approved by Congress in August 2003, which contains the 2004-07 Pluriannual Plan (PPA), which lays out the government’s long-term national objectives.
On the social front, though Brazil is rife with social inequalities the salient characteristic of the current situation is that it is a policy sea change in the area of the government’s social policy agenda. Included in the PPA is an impressive set of proposals which require, as many officials told the Mission, important qualitative EC support in catalytic efforts at improving the management of policy execution.
Review of the Implementation of the Current CSP Bilateral Cooperation
The current bilateral CSP was modified through a new MoU, in April 2004. Regarding projects originally included in the 2002-2006 CSP, only two have recently (2004 and 2005) been approved for initiation of execution. No other projects of this original 2002- 2006 CSP have reached a predictable stage of execution initiation at the time of the Mission. In summary, into the beginning of year 4 of the six year programming period no funds have yet been executed and 59% are at the stage of “primary commitment”.
Several pre 2002-2006 projects are still in execution. While recent progress is an auspicious turn of events at the same time the most likely resulting “carry-over” effects of these two projects and of the projects whose execution is expected to be initiated could well spill over into 2008. This possibility must be taken into account when programming for the next CSP for 2007-2011.
Non-Bilateral Cooperation
The analysis of this cooperation was based on four sources, three of which were provided by the Delegation and the fourth was the AIDCO website. The first of these was the CRIS Table updated to December 31, 2004. This source shows a relatively good execution ratio for a total amount of Eus 14.33 (m). In addition there has been substantial activity in the non-bilateral aspects of environmental projects according to the Missions second source, two tables provided by the environmental group of the Delegation. These show in the Environment and Social Development sector that during the period 1999 to 2006, five projects worth Eus 6.3 (m) have been completed, one project is expected to be completed during 2005 worth Eus 1.8 (m) and one project worth Eus 1.5 is expected to be completed in 2006. In the non-bilateral PPG-7 line, considering projects completed after 2003, two projects worth Eus 9,0 (m) were completed by 2003 and three projects worth Eus 30,7 (m) are still ongoing with termination dates expected in 2005, 2006 and 2007. The conclusion that emerges from this brief review of non-bilateral, CRIS and environment related projects is that total committed funds of Eus 63.63 (m) are more significant than bilateral funding committed over the same period of time. In addition the third source (two excel files) shows for NGO PVD Projects for the period 2000-2004 that 137 projects were active. This table only provides a figure for total Eus expended over the period 1993-2004 which come to Eus 180,740,000. A rough prorated figure would mean some Eus 15.0 (m)/year; a very large amount when compared to bilateral projects. Another excel table provided information for four of the AIDCO financing lines which indicates that ALFA has provided
vi subsidies for Eus 3.5 (m); AL-Invest has provided subsidies for Eus 3.44 (m); URBAL has provided subsidies for Eus 5.0 (m). @ALIS though significant cannot be quantified on the Brazilian end because these projects are all coordinated by European institutions and amounts are not available, though a total of 26 projects are identified with 340 institutions in the case of Brazil. Information on the website for the other another 5 AIDCO programmes unfortunately could not be quantified monetarily. However, the preceding overview indicates, with a relative degree of approximation, that non-bilateral cooperation over the period considered (1999-2004) roughly accounts for Eus 150.0 (m), even accounting for some double counting between the CRIS and excel tables the figure would still be around Eus 130.0 (m), substantially more than the bilateral cooperation committed over the same period.
Issues of Coherence and Complementarity and Harmonization and Coordination
On coherence and complementarity (C&C) between thematic budget lines, the 2002- 2006 CSP and the Brazilian National Agenda, there is C&C between the current CSP and the Brazilian National policy priorities both during the previous government and the current government. As to the C&C of thematic budget line projects, according to the CRIS table, covering the period 1995-2004, the Mission’s qualitative findings suggest that the possibility of C&C improving has resulted from the deconcentration of at least 27 projects that since 2004 are managed by the Delegation (see CRIS table 31/12/04).
Regarding coherence and complementarity (C&C) between the use of different thematic budget lines and other EC financial Instruments, the 2002-2006 CSP and the EC’s international agenda, the Mission confirms the coherence between this international agenda and the use of thematic budget lines and financial instruments. A case in point is EuroSocial which is a five year programme of €30 million with which the European Commission will assist Latin American countries to develop and implement social policies that will contribute to reducing the gap between the rich and the poor in the region. This special fund was launched in May 2004, as a commitment following the Gualadajara Summit.All bilateral aspects of the CSP are coherent and complementary with EU commitments emerging from several international commitments. As to the thematic budget lines the Mission confirms complementarity in the cases of a substantial number of projects in line 21 02 03, as well as line 21 02 05. Complementarity was also verified on the CORDIS web-site for FP 5 Projects of which 51 records were found for Brazil.
On the issue of coherence between centralized programmes and the national agenda, as these programmes are decided on in consonance with the national agenda, in general they are coherent. Yet, in terms of the CSP concept it would be useful to extend this question and ask whether there is complementarity between these centralized programmes and the CSP’s bi-lateral cooperation rationale in terms of their mutual contribution to issues on the national agenda. Here, It would appear that although complementarity as an ideal is implicit in the EC policy coherence between these lines, their materialization on the ground cannot be confirmed by the Mission, because it would have entailed a research effort that would have been beyond its time constraints.
As to the coherence and complementarity of ongoing bilateral projects with EC and Brazilian priorities, the Mission confirmed that on-going projects (defined broadly as including non 2002-2006 CSP projects in execution and two 2002-2006 CSP Projects that are just initiating execution) are in general coherent with EC and Brazilian priorities.
vii Regarding complementarity, the three non 2002-2006 projects show relative complementarity, the two 2002-2006 projects show very strong complementarity, as would be expected.
Finally, as to the issues of harmonization and complementarity with other donors, although the concerns of the stakeholders interviewed, regarding these issues, was evident, and efforts to improve the situation were observed in situ at the Delegation, results are not materialized in terms of project actions.
Key Findings and recommendations
The Mission has tried to reply to three questions that are “in the air” among donors in Brasilia: Does EC cooperation with Brazil make sense? What kind of EC cooperation makes sense? With whom does EC make sense? Chapter 5 makes an attempt to answer these questions, which must be considered given Brazil’s special conditions. The Mission believes that “traditional cooperation” is finished in Brazil, not as a result of income indicators or other formal international development indicators, but as a result of the maturity attained by Brazilian institutions. Perhaps the clearest definition of where EU/Brazil cooperation should go was given to the Mission by the Under Secretary for Federative Affairs of the President’s Office who said, reflecting on this issue, “temos que ir ao encontro das agendas” (we have to seek the meeting of our agendas), even though in many cases the counterparts admitted that their agendas were not all that clear. Yet this phrase aptly summarizes the style of this CSP’s Finalization Report’s proposals.
Another reason for continued bilateral cooperation EU/Brazil, in the long term, is the fact that Brazil is an important “anchor” state 3 in the South American region and hence, its political and social stability is of great interest to the EU from the geostrategic and trade and investment perspectives. Having said this, because of the great territorial, social and economic dimensions of Brazil, the issue of EU cooperation visibility and impact comes up immediately, as EC external cooperation will hardly produce visible effects if not adequately concentrated and catalytically applied. Brazil’s large physical, social and economic dimensions and the small quantitative size of any EC contribution, makes it imperative to clearly pinpoint and concentrate EC cooperation where its impact is useful and visible. This suggests the need to adopt a strategy which proceeds with a type of assistance that concentrates on major problems of development management, in areas which strongly impact the GOB’s policies of improved governance, improved foreign trade, and the concerted effort to finally deal with the scourge of the social inequities of the country, policies which are directed to increasing social inclusion and thus cohesion.
Of these one of the more urgent issues mentioned repeatedly to the Mission was the question of the management of government actions in order to improve governance, a critical need to address the consequences of the enormous territorial dimension of Brazil and its social and economic disparities. This question of management and governance not only looms large in the concerns of government officials, but it is where they also perceive a perfect fit between their needs and the qualitative importance of EC cooperation in terms of the acquired European experience; particularly in the area of territorial management and socio-economic integration, as critical variables for the improvement of governance in order to attain the established policy objectives of the government. Chapter 5 details the proposals that emerge from the preceding concepts.
In its propositional sections it suggests a set of parameters for approaching the
3 In the “diplomatic” jargon of some of the EU bilaterals
viii construction of a CSP for Brazil for 2007-2011. These parameters help to define what this Report calls “airstrips” or ‘gateways” where projects can safely find welcoming counterparts.
The Mission proposes two “Country Strategy Analysis and Policy” tables (Tables 9 and 10, Chapter 5), in effect two NIPs, which are used to define two clusters of programmes with 8 projects in one and 6 in the other, and show how they would interact with the mayor policy dimensions of the EC, the major financing instruments involved, the cross- cutting issues defined by the Council and Commission, and the Mercosul area issues.
These two Tables constitute the conceptual basis for this Report’s 2007-2011 CSP proposals.
Given the experience of the execution of the 2002-2006 CSP the idea behind these clusters is to further create conditions in which policies mix and in-depth execution strategy is attained.
What is recommended is an “in depth” strategy (summarized in Table 11, Chapter 5) which would provide, as a first stage, direct assistance to the selected institutions through bi-lateral cooperation, directed as exchanges in both directions. At a later stage, a second bi-lateral cooperation module would be created in an appropriate national institution (IPEA, SEAIN, or other), whose function would be to monitor and evaluate the relevance, sustainability, efficiency, effectiveness, and lessons learned, in each institution’s use of EC resources, with the object of both ensuring appropriate direction of the efforts being made and fulfilling an EC function which is not being adequately complied with at present.
A third stage module would fill the gap of the non-complied with EC function of ensuring coordination, complementarity, harmonization and coherence of cooperation. These issues would be dealt with proactively at the point where other EC funding sources (thematic horizontal, ALA horizontal, S&T+I Framework, regional bi-lateral), would be integrated through the information available on the EC information web sites.
Table 11 also gives preliminary indications of how the funds could be distributed, assuming bilateral funding similar to the current CSP, Eus 51.0 (m).
Finally,the Mission has prepared, also for Chapter 5 and at the suggestion of RELEX (during the March 22 debriefing), two logical frameworks which are attached as Tables 12 and 13 of this Report. They unfortunately make it longer, as do other tables, than the TORs requested but the Mission considers that they will be very helpful to visualize what is being proposed at the level of programme goals, purposes, project purposes and their products or components, and will be very useful for the three upcoming regional seminars, as Phase 2 of this Mission proceeds in the near future.
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CHAPTER 1
Main Political, Economic and Social Developments in the Country 1. Institutional Sustainability
From a European perspective, perhaps the view of Latin American countries in this aspect offers a less stable horizon than what is usually perceived as stable in Europe;
especially Brazil. However, considering the evolution of the Brazilian political situation over the past 25 years, the changes that have occurred, and their progressively more democratic nature have been positively dramatic and augur well for the future.
However in the mid-term Brazil may be facing a period of political untidiness that will probably make it difficult for a reformist government as the country’s ideological and geographical political diversity generates a heterogeneous legislative which makes the executive’s task difficult, especially for a Government which is attempting to introduce fundamental change in the level of acces to equity and fairness to all members of society. The price of this negotiation between the executive and the legislative is usually the degradation of the platform with which the government in power won the election.
External (foreign debt) and internal (high interest rates, social debt and national internal debt) factors have led to budgetary and economic consequences that have had follow- on effects in terms of other decisions, such as placing some social priorities on the back burner and prioritizing economic development over social and environmental issues.
These have weakened the political base of the government both on the side of the opposition whose appetite has been whetted and wants more, as it perceives the government as vulnerable to its pressures, and on the side of the government’s supporters, many of whom have become alienated from its policy decisions and actions as they become further and further distant from the ideals they voted for.
The Mission’s Report cannot predict what will happen with this situation in the future. A lot depends on the behaviour of macroeconomic variables, especially foreign trade, which cannot be foreseen. However, two things are certain. On the one hand, nothing indicates that Brazil is anywhere near some form of institutional destabilization as today’s political players are too aware of the risks of such a course of action, not only for internal reasons, but for external reasons. On the other hand, what can be predicted is that this and the next government is going to have a hard time getting its work done at the level of bringing public institutions closer to the many dimensions of civil society.
It could be concluded at this point that institutionally, bilateral cooperation can take place in a relatively stable environment, but that barriers to fluid exchanges might appear from time to time on the margins.
2. Governance and Territory
Governance can be simply defined, for this Report’s purposes, as “the use of appropriate tools to improve the effectiveness of public institutions for the benefit of civil society”. Within this definition, the Mission confirmed the importance of governance to Brazilian officials during more than 50 interviews during which they expressed, in
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different ways, a tremendous coherence of purpose in the goals of good governance in the current political juncture. They basically defined it more specifically as the means for attaining the effective integration of the three administrative levels of the Federation; a primary goal that would facilitate the resolution of many institutional and political problems faced by the country. They also expressed, with the same level of coherence, their conviction that Brazil was prepared to make use of the European experience for this purpose and looks to it as a most important potential influence for improved governance over the long run, as they are cognizant of the many governance related socioeconomic and institutional questions that remain unresolved.
The core issue was further defined by one Deputy Minister as the absence of administrative continuity and connectivity between the three levels of government, where the critical in-between actions are empty sets rather than effective intersections. He further defined it in information theory terms as the lack of a common language, which leaves the Brazilian state as an incomplete informational construct.
It seems that what Europeans take for granted, i.e. the integrity of the physical, social, cultural and economic dimensions of the State, through its capacity to administer its sovereign territory, in Brazil is still a project to be completed. And this fact has enormous effects upon the issues of social cohesion, economic development and political sustainability that are so dear to the heart of Europe’s development goals for less fortunate nations. In the Mission’s view, these sovereign territory management dimensions acquire such a central role in a country of such large territorial dimensions and diversity that in the light of Europe’s similar experiences in this field, they lead to the idea of considering this institutional/territorial interface as the basis for thinking of cooperation. Such an approach necessarily leads to considering the basis for materializing this cooperation as constituted by the two dimensions of governance and social territory.
3. Economic Developments
After a secular trend of modest economic growth, Brazil had an episode of fast output growth between the 1950s and the late 1970s. According to the Treasury (2004), the average growth rate of per capita GDP between 1960 and 1980 was as high as 3.4%.
This allowed the per capita income levels in Brazil to approach those verified in other reference countries of Latin America, yet the benefits of this growth surge were not equally shared among the population.
In the 1980s, following the second oil shock and the tightening of monetary policy in the US, the economy was hit by the international debt crises. High macroeconomic imbalances emerged and, in result, inflation picked up. Brazil was then subject to a sequence of inflation stabilization programmes that did not succeed in achieving long term nominal stability. Reflecting the “adjustment fatigue”, the GDP growth rates along the 1980s stood bellow population growth, implying that per capita GDP has decreased as Table 1 shows. In the late 1980s, facing the progressive exhaustion of the inward- oriented policies followed so far, Brazil engaged in a liberalization process. The openness of the economy translated into a larger share of exports in GDP, that reached 16% in 2003 against 10% in 1993 (Table 2). At the same time, agriculture and industry, that had been the main engines of the economy, lost weight in terms of GDP.
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Table 1: GDP, Population and Per capita GDP (annual growth rates) GDP Population Per Capita
GDP
1980-1984 1.3 2.2 -0.9
1985-1989 1.9 2.3 -0.4
1990-1994 3.1 1.5 1.5
1995-1999 2.2 1.4 0.9
2000-2003 0.8 1.0 -0.2
Source: Banco Central do Brasil, 2003.
Table 2, Structure of the Economy (%of GDP)
1983 1993 2003
Agriculture 10.9 7.6 5.8
Industry 44 41.6 19.1
Manufacturing 33.2 25 11.4
Services 45.1 50.8 75.1
Total 100 100 100
Memo: Exports 11.4 10.5 16.9
Consumer prices (% change) 135.0 1928.0 9,3 Source: OECD
The liberalization process accelerated during the administration of Fernando Henrique Cardozo, which implemented an ambitious privatisation programme. In the 1990s, Brazil privatised 119 firms, selling them for US$86. 9 billions, that made this process one of the largest in the World (IADB, 2004). The consequence of this programme was the almost complete retreat of the State from sectors where it had acted as a monopoly for decades. In the late 1990s, private investors were managing, partially or totally, the sector of telecommunications, the train networks, important harbours, electric power generation and water supply. To prevent abuses, regulatory agencies were created. Still, according to IADB (2004), the impact of privatisations on efficiency was mixed, causing a weakening of governance.
Despite the nominal stabilization and the real sector reforms, the growth performance of the economy along the 1990s was disappointing. With the exception of a short-term growth episode from 1993 to1997, the overall picture is that of slow growth (Table 2) and divergence in respect to per capita GDP in US$.
As for the national regional level, the relationship between social space and economic variables shows a mixed evolution, with an impact on governance. The group of more dynamic states (those that achieve growth rates of per capita GDP faster than 3.5% per year) includes both states with per capita income above the national average (Rio de Janeiro and Santa Catarina) and states with per capita income lower than 50% of the
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national average (Paraíba and Maranhão). The poorest states Acre, Ceará and Alagoas, exhibited negative growth rates of per capita income in the period from 1998-2003. The fact that three out of the eight poorest Brazilian states exhibited negative growth rates and a fourth state (Piauí) exhibited a growth rate that stood below the country’s average, points to a significant divergent trend in the less-favoured segments, being a source of concern from the regional cohesion point of view.
Confronting Brazilian states with those of some countries in the world, ranked according to their per capita incomes, using comparable prices, while Distrito Federal, São Paulo and Rio de Janeiro could be among the 30 richest nations in the world, Maranhão and Piauí have per capita income levels that compare to those of less developed countries, such as Mozambique and Senegal.
At the macroeconomic level, a main challenge to the monetary policy is the level of interest rates. Despite the fall in the inflation rate and the reduction of macroeconomic imbalances, interest rates on Brazilian assets (both in Reals and in US dollars) have remained high.
In the private sector, a high proportion of non-performing loans and, eventually, insufficient competition in the banking sector (as revealed by intermediation margins) may help explain this result. Real investment has remained low (below 20% of GDP between 1990 and 2003) and clearly, a faster capital accumulation would be needed for the economy to engage in a sustained convergence path. Moreover, high interest rates impact on the public debt. Despite the primary surpluses, public debt in percentage of GDP exhibits an upward trend, which adds to the investor’s uncertainty and keeps the interest rate-debt dynamics on a knife-hedge path out of the vicious cycle. Interest rates picked up at the time of the Argentinean currency collapse (December 2001) and again at the time of the last Presidential elections (2003). In these two episodes, the uncertainty created lead investors to move away from Brazilian assets, causing the Real to depreciate and, by then, boosting the inflation rate and the debt level. The monetary authorities responded with a tight monetary policy that pushed the economy into a recession. In the middle of 2003, Brazil was facing a GDP contraction, a decline in real wages and an unemployment surge. Immediately after being elected, President Lula reinforced the stabilisation strategy. A compromise to achieve a 4.25% primary surplus at the end of the mandate was sent to Congress in 2003 and the government successfully advanced two major legislative proposals to streamline the unsustainable pension scheme and to reform the tax system. These measures had a positive impact on expectations, allowing both the interest rates and the public debt to curve down (according to the IPEA, 2004, from 58.7% in December 2003 to 53.7% in October 2004).
An appreciation pressure on the exchange rate allowed the Central Bank to accumulate external reserves. The ease of the monetary stance in late 2003 and a dynamic exporting sector (boosted by both the real exchange rate depreciation and a terms-of- trade improvement) gave rise to a new growth surge. According to IPEA (2004), the investment rate rose above 20% of GDP the third quarter of 2004, GDP growth was 5.2% in 2004 and is expected to be 3.8% in 2005.
4. The Social Cohesion Situation in Brazil
Brazil is a middle-income nation with significant natural, human and technological resources. In the 2003 United Nations’ Human Development Index (HDI), Brazil was
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ranked 65th out of 175 countries. Brazil has made significant advances in the last 50 years, but the corresponding benefits have not been shared by a large marginalized population. The aggregate indicators mask a number of extremes and inequalities based on the economic status, ethnic differences, gender and the urban-rural dichotomy.
The Millennium Development Goals establish a number of simple indicators to achieve a minimum level of cohesion. In the case of Brazil, Millenium focal areas are the distribution of income, the access to basic social services (education, health care, basic infrastructure such as drinking water, decent jobs, and social protection) and participation in political and social life. The inability to find a role in society, the poor political representation and the lack of access to justice have all too often been overlooked as exclusion factors, which need to be addressed within the new Guadalajara concept of social cohesion and included as a new field of cooperation for the EC/Brazil. Exclusion is often reinforced by open and more subtle forms of discrimination on grounds of gender, race, social status, ethnic origin etc. Geographical location strongly influences levels of social inclusion; national cohesion can be threatened when regional inequalities within a country become more pronounced.
In 2000, Brazil stated the aim to achieve the socio-economic targets of the MDG in 2015, using 1990 as the reference year. According to the report Objetivos de Desenvolvimento do Milênio — Relatório Nacional de Acompanhamento, prepared by the Brazilian government and the United Nations in Brazil, presented at the IPEA and IBGE (Instituto Brasileiro de Geografia e Estatística), Brazil has achieved some progressed in terms of the Millennium goals, but the overall performance has been affected by regional discrepancies, income inequalities, racial and gender inequalities and urban-rural dichotomies:
Poverty
According to the above mentioned document, Brazil is almost achieving the first millennium goal, which is to half the share of the population living in extreme poverty – that is, with less than one dollar per day, adjusted for comparable prices. From 1990 to 2000, the proportion of the Brazilian living in extreme poverty has declined form 8.8% to 4.7%. This proportion is expected to decrease to 4.4% before 2015. As far as income inequality is concerned, little progress has been achieved. From 1992 to 2002 the income share of the poorest 20% of the population has increased from 3% to only 4.2%
in 2002. In contrast, the income share of the richest 20% of the population has increased from 55,7% in 1992 to 56,8% in 2002. Inequalities show up more severely in particular REGIONAL dimensions: in 2002 extreme poverty was affecting 5% of the population in the Southeast and 25% of the population in the Northeast. Among the 1% richest of the population, 86% are white. Among the 10% poorest, 65% are Afro-descended Brazilians.
Hunger
This goal means to halve the proportion of the population with hunger, from 1990 to 2015. Brazil still hosts one million children affected by malnutrition. Infant malnutrition has declined 70% between 1970 and 1996, but the evolution has not been uniform across the territory. Chronicle malnutrition is more serious in the North and Northeast regions. There are also significant differences between rural and urban areas. In the Brazilian case, hunger is more an issue case of inequality in access to food than a case of food availability.
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Education
This goal is directed towards attaining universal access to primary school. In Brazil in 1992, 78% of the children aged from 7 to 10 years were enrolled in primary school; by 2002 this figure had increased to 90%. In primary school, progress has been more or less uniform across ethnic groups. In the other levels, however, afro-descendents have less years of schooling. There are also inequalities across the territory: in the South, 91.7% of the students starting the primary school do reach the secondary school. In the Northeast this proportion falls to 70%.
Health
The goal is to reduce the under-five mortality rate by two thirds. According to the IPEA/IBGE report, Brazil is expected to achieve this goal. From 1990 to 2002 the under- five mortality rate declined from 53.7 per thousand to 33.7 per thousand (this
represents a 37.2% decline). The 2015 goal is 17.9. Although all regions have improved in respect to this indicator, inequalities persist. In the year 2000, the under-five mortality rate in the Northeast region was 160% higher than that in the South. Another goal determines that, between 1990 and 2015, maternal mortality shall be reduced by two thirds. The report of the Brazilian government questions the quality of the existing figures for this indicator, due to misreporting on death declarations (in particular, on the information concerning the pregnancy situation of the death women). An estimate of 75.3 maternal deaths per 100 thousand births is however presented and confronted with the figure for developed countries, no higher than 20 deaths for 100 thousand births. As far as combating Aids, Malaria and other diseases; the country has achieved some progress in reducing the number of people infected with HIV. The incidence of Malaria has exhibited a strong decline during the 1990, but is now recovering. According to the report, this is mostly explained by an uncontrolled growth in the peripheries of Manaus and Porto Velho. This disease has a strong regional incidence (99% of the cases occur in the Legal Amazonia). Access to safe water has increased, but in a slower pace in rural areas. In the cities, the coverage rate has increased from 88.3% in 1992 to 91.3%
in 2002. In the country-side, the coverage rate has increased from 76.2% in 1992 to 80.6% in 2002. Yet the main health related problem is access to sanitation facilities.
One of the Millenium goals is to halve the proportion of people without access to sanitation facilities. Brazil has revealed slow progress in this dimension: in the urban areas, the proportion of people with access to sanitation facilities increased from 65.9%
in 1992 to 74.9% in 2002. In the country side, the corresponding figures are 10.3%
and 16%.
5. Brazil’s Policy Agenda
In August 2003, the Brazilian Congress approved Brasil de Todos (Brazil for All); the 2004-07 Pluriannual Plan (PPA), which lays out the government’s long-term national objectives. These objectives are to achieve macroeconomic stability so as to achieve faster economic growth and, at the same time improve citizenship and the social inclusion of marginalized populations supported by responsible and a sustainable fiscal administration. The PPA is composed of three programming areas defined over five dimensions (social, economic, regional, environmental and democratic):
1. Enhanced social inclusion and reduction of social inequalities.
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This includes food security; universal access to social security; improved quality of education systems; urban reform; reduced vulnerability to violence; and reduced gender and ethnic inequalities. This priority captures the social dimension;
2. Growth with employment creation, environmental sustainability and reduced regional inequalities.
This includes macroeconomic stability; democratic access to credit; increased labour supply through professional training and regulation; reduced regional and intra-regional inequalities; promotion of popular participation in local development; agrarian reform; improved environmental management; and strengthened micro, small and medium enterprises. This priority includes the economic, regional and environmental dimensions);
3. Expansion of citizenship and strengthening of democracy.
This includes human rights; integrating indigenous peoples while respecting their cultural identity; public security; renewed public administration that incorporates principles of ethics, transparency, participation and decentralization.
Each of these three objectives is broken down into 30 challenges that represent the government’s priority intervention areas for public policies up to 2007. To address these challenges the government indicates 374 programmes that give rise to 4.300 actions.
The PPA is clearly driven by social concerns.4, as programs and projects under the first objective represent roughly 60% of the total foreseen resources. Economic development ranks as the second priority. Public resources dedicated to the programs outlined in the plan total almost US$150 billion over four years: 63% to social development objectives;
33% to economic growth objectives (with the majority going to economic infrastructure, the productive sector and export promotion); and 4% to cidadania (citizenship) and democracy objectives. The government will also forge partnerships with the Brazilian private sector and with the non-governmental sector in order to combat social exclusion.
The government also plans to proceed with trade liberalization and increased spending in infrastructure, most of which in energy. Other reforms of most importance include improving the efficiency of the financial system; strengthen the regulatory institutions and simplifying the tax system, which is currently characterised by a low tax base, high burden on firms, fiscal competition among states and a great complexity. On the external front, the government of President Luiz Inácio Lula Da Silva has primarily focused on diplomatic action aimed at building coalitions for a new regional agenda to reinforce Brazil’s pivotal role in South America. Brazil is strongly attached to the process of Mercosul integration, but is also interested in leading the process of South American integration. Brazil also plays an increasingly prominent role at the multilateral level. The long-term focus has broadened to the role of a protagonist, not only in the region, but also among developing countries and in the United Nations. Brazil has the intention of becoming a permanent member of the United Nations Security Council, on the occasion of a possible institutional reform of the UN sometime in the future. WTO talks have seen Brazil emerge as a leading player in the so-called G-20 group of developing countries,
4 Within the limits mentioned in the first sections of this Chapter.
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with the country playing a critical role at the Cancún WTO Ministerial. Aside from the ongoing negotiations between Mercosul and the EU and in the Free Trade Area of the Americas, Mercosul has recently signed an agreement with Peru and is currently in negotiations with the Andean Community, India, China and the Southern African Customs Union.
CHAPTER 2
EC/EU Policy Objectives and Commitments 1. Overview
Cooperation for Development is one of the three tasks of the European Community‘s external relations, together with trade and political dialog. The Treaty of the European Community (1957) in article 177 declares that Community policy of aid for development will encourage the campaign against poverty, sustainable economic and social development and a harmonious and progressive integration of developing countries into the world economy.
After this Treaty, many documents have been produced, reinforcing the Community’s cooperation principles and objectives. Taking into account the specificity of each country and region, the European Community has defined programmes and cooperation agreements resulting in a complex cooperation framework.
1.1. General Objectives of the European Commission
With the declaration of 10th November 2000, the Council and the European Commission expressed the will of having a Community policy for development guided by the principles of sustained social and human development, equity and participation. The promotion of human rights, the rule of law and good governance in public affairs are also part of it.
1.2 Objectives and priorities of the Community’s Policy
The main objective of the EC’s development policy must be the reduction of poverty, so that it can be eliminated in the long term. This objective implies support to economic, social and environmentally sustainable development, the promotion of the progressive integration of developing countries in the world economy and the will to struggle against inequality.
The Community focuses on seven identified fields according to the value added of the Community’s action and of the contribution to poverty alleviation:
- regional integration and cooperation
- support to macro-economic policies and equity promotion in the access to social services
- transport
- food safety and sustainable rural development - institutional capacity building
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- human rights, gender equality, children’s rights - the environmental dimension
1.3 Horizontal aspects
As for horizontal aspects, a systematic attention is paid to Human Rights, the environmental dimension, gender and good governance. Others aspects include actions on transmissible diseases and on the evolution of information and communication technologies and promoting research in developing countries.
2. Attaining Existing International Commitments 2.1 Millenium Goals
In line with its policy statement, the European Commission engaged itself in helping the developing countries to achieve the United Nations Millennium Development goals.
The commission plays an important role in the achievement of these goals.
2.2 Trade and development
The fourth WTO ministerial conference that took place in Doha in November 2001 launched the program of Doha for Development, focused on development and aiming the reinforcement of capacities with the purpose to help different countries participate efficiently in these negotiations. The special and distinctive treatment is a Doha program’s main characteristic, because its role is to assure a full insertion of developing countries in a multilateral trade system.
In November 2002, the Ministers’ Council passed the conclusions on the Community communication relative to trade and development 5 , which gave rise to a series of EC actions. The main goal of the Commission, in this case, is to assure that trade contributes to the development of poor countries, especially of the poorest, and helps them to take advantage of the opportunities given by the opening of the world markets.
The Commission tries then to reinforce the coherence between the new WTO trade rules and the development policy objectives. Specific instruments called “trade impact evaluation” have been used in 2003 to evaluate the potential economic, social and environmental impacts of trade agreements concluded at a multilateral, regional or bilateral level.
The Monterrey commitments deal with finance for development and the Johannesburg commitments deal with sustainable development; the also deal with the debate on aid’s efficiency, including the issue of harmonization among donor countries.
At this moment, the new commissioner for Development and Humanitarian Aid, Louis Michel, is proposing the Council and the Commission a revision of the Development Policy’s Declaration. He suggests three motifs for doing it:
5 « Commerce and Development – Assist developing countries to take advantage of the benefits of commerce » (COM (2000) 513).
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• An accelerated globalisation process which includes not only trade and economic matters, but also all the major issues of concern to citizens (environment, health, migration, security, …) and renders it necessary to step up cooperation and extend the scope of partnership agreements with developing countries, in conjunction with aid for development as such.
• new political priorities in an enlarged EU, in particular the EU's neighbourhood policy and the security strategy, and the draft Constitutional Treaty.
• the emergence of a more robust international consensus reflected in: the UN's Millennium Declaration and Development Objectives; the commitments made at Monterrey regarding funding for development, at Doha regarding trade and at Johannesburg regarding sustainable development; and the debate on the
effectiveness of aid, covering issues such as harmonisation between donors and the tailoring of aid to policies and procedures in the partner countries.
3. Objectives Concerning Latin America
The EU is an important economic and political partner for Latin America; it is the leading donor in the region, premier foreign investor, and second most important trade partner.
The EU’s relations with Latin American countries have developed at the bi-regional level (European Union-Latin America), and a number of specialised dialogues within this broader relationship are ongoing with specific sub-regions (the Mercosur, Andean Community, and Central America), and between the EU and specific nations (Mexico and Chile).
A full range of co-operation agreements have been concluded at each of the levels, based on the three pillars of economic co-operation, institutionalised political dialogue and the strengthening of trade relations.
EC cooperation with Latin America follows Madrid’s (2002) and the Guadalajara (2004) summits; three main action fields are stressed: strengthening institutions and democracy, modernisation of the state and Human Rights; social progress and development in the poorest regions; trade related assistance and regional integration.
The Third Latin American and Caribbean (LAC) - European Union (EU) Ministerial Forum on the Information Society was held in Rio de Janeiro, Brazil on 22-23 November 2004. One of the commitments related to:
Strengthening of the LAC-EU policy and regulatory co-operation of the Information Society which has resulted in a dialogue among LAC and EU Governments on policy and regulatory issues of common interest in the Information Society field was launched, which in particular is going to identify those aspects of the Geneva Plan of Action of the World Summit on the Information Society (WSIS), most relevant from the point of view of social cohesion and digital inclusion. This dialogue has the technical and institutional support of the ECLAC/United Nations, in the context of the
@LIS programme, and is opened to contributions from other parties involved in the development of the Information Society.
This Forum debated and approved:
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i. a Ministerial declaration reflecting the views on digital inclusion shared by the two regions, with emphasis on the most urgent priorities of the WSIS Plan of Action;
ii. a bi-regional work programme for the development of digital inclusion based on the WSIS Plan of Action, including proposals for technology transfer and cooperation in specific areas.
3.1 Objectives Concerning Mercosul
At the sub-regional level, Mercosul represents the main regional integration process.
Created in 1991, El "Mercado del Sur" (Mercosur) is a dynamic process of regional integration between Argentina, Brazil, Paraguay and Uruguay. The European Union has supported Mercosul from the outset. Less than one year after its creation the European Commission signed an Agreement with Mercosul to provide technical and institutional support for the organisation’s fledging structures, in an Interregional Framework Co- operation Agreement in 1996 and it is currently conducting negotiations with Mercosul for a Political and Economic Association Agreement
The EU and Mercosul signed an Interregional Framework cooperation agreement in December 1995, which fully entered into force in July 1999 (provisional application already 1996). This Framework Agreement consists of three main elements: political dialogue, co-operation and trade issues. This agreement is expected to be replaced by a more comprehensive bi-regional Association Agreement in
The agenda of the latest EU-Mercosul political dialogue ministerial meeting in Vouliagmeni (Athens28/03/03) covered the following issues: “Development of the EU and Mercosul regional integration process”, “Assessment of the situation of the EU- Mercosul negotiations”, “Strengthening of EU-Mercosul political co-operation in international fora” and “International situation: new challenges”. It was decided at the meeting to convene an ad-hoc senior officials meeting before the next UN General Assembly additional to the regular ministerial meetings in New York.
3.2 Objectives Concerning Brazil
The EU’s present relations with Brazil are based on the 1992 EC-Brazil Framework Co- operation Agreement and the 1995 EU-Mercosul Framework Co-operation Agreement, the later having as its long term objective the preparation of an Inter-Regional Association between the EU and Mercosul. Negotiations have been taking place since 1999 to establish such an association, including the creation of a free trade area.
Development co-operation issues are dealt with at both the bilateral EU-Brazil and the biregional EU-Mercosul levels, while a range of sectorial discussions underpin the bilateral relations between the two partners.
The current CSP was produced after the MoU had been signed and was tailored so as to incorporate the existing projects (Bottom up).
In November 2002 the EC and Brazil signed a Memorandum of Understanding on bilateral development co-operation until the end of 2006, which was revised in May 2004.
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EU bilateral cooperation is programmed at € 64m for the period 2001-2006, and focuses on three priority areas: social, economic and environmental cooperation.
In January 2004 Commissioner Patten and Brazilian Foreign Minister Amorim signed a new EC-Brazil Science and Technology Co-operation Agreement.
At present, EC co-operation with Brazil amounts to some € 180m in terms of projects under implementation. The sector where most financial resources are allocated to ongoing projects is the environment, mainly in the framework of the Pilot Programme for the Protection of Brazilian Tropical Forests (PPG7). In the social field, the fight against poverty is the key priority, and includes many NGO projects.
The EC co-operation strategy for Brazil, adopted in August 2002, concentrates on the following three focal areas as priority sectors for EC co-operation in Brazil: 1) Economic reform; 2) Social development; 3) the Environment. Co-operation in these three focal areas should provide support to the Brazilian government’s efforts to tackle economic challenges, as well as provide support to social and environmental problems. With an indicative amount of close to €64 million having been allocated for the period 2000-2006, though little funding has been to date committed. The national indicative programme for the period from 2002 to 2006 proposes the following actions:
- Economic reform (€30 million/or 47% of the indicative budget) - Social development (€15 million/or 23% of the indicative budget) - The Environment (€6 million/or 9% of the indicative budget)
3.3 Specific bi-lateral projects in Brazil
It should be noted, that this Chapter refers to policy objectives and commitments. As such the reference below to bilateral projects currently under implementation includes only one project which is part of the 2002-2006 CSP: Network of Technological Centers.
As can be seen in Table 3 (next page) and will be further referred to in Chapter 3, where it will become clear that there is in fact a significant delay in the execution of the Current CSP.
The EC directly assures the component of Technical Assistance (Brazilian Concept), hiring a consortium that provides services to the beneficiary. Financial Cooperation involves funds going to the beneficiary (budget), with domestic co-financing. The beneficiary may execute directly (ESAF) or indirectly (MDIC, SEBRAI).
4. Significant EC Policy/Operational Changes 4.1 N+3 Budget Execution Decision
Article 166.2 6 of the EC Financial Regulations, EC, No. 1605/2002 Council, June 25, 2002, established that “Financing agreements concluded with beneficiary third countries
6 cf, EC Financial Regulations, EC, No. 1605/2002 Council, June 25, 2002; translated from the Portuguese version
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... will be valid until December 30 of year n+1, year “n” being the year in which the budgetary authorization was established. All individual contracts and specific agreements directed to executing financing agreements must be concluded with a three year period of the date of the budgetary authorization. All individual contracts and specific agreements directed to financing an audit or evaluation can be concluded at a later date.”
4.2 Deconcentration Decision
In the “Communication to the Commission on the Reform of the Management of External Assistance”, Rev. 8, 16/05/00, paragraph 2.4. indicates the need for “ Extensive devolution to Delegations and, where possible to partner countries”. And on the EC External Relations web site, 16/05/2000 a note was introduced on the same date on
“Deconcentration toward Delegations”. During 2004, as a consequence of this policy change, 47 previously centralized horizontal projects were deconcentrated to the Delegation in Brasilia. Of these, 38, corresponded to budget line 21-02-03 (ONG/CDC/Santé), and 9 corresponded to budget line 21-03-03 (ONG/PVD).
TABLE 3: 2002-2006 CSP - CALENDAR OF ACTIONS AND FINANCIAL COMMITMENTS IN EUS (M); (C.F. PARAGRAPH 6.3, OF CSP 2002-2006)
Brazil 2002 2003 2004 2005 2006
1. Economic Reform
1.1. Economic Reform Programme: 11.0 11.0
1.2. Science And Technology
Programme: Proposed in CSP 8.0
2. Social Development
2.1. Poverty Programme in N/NE: Proposed
in CSP 7.5
2.2. Social Programme for Rural Areas and Urban Shanty Towns: Proposed in
CSP 7.5
3. Environment
3.1. Support to the Second Phase of PPG7:
Proposed in CSP 6.0
TOTALS as Proposed in CSP 7.5 8.0 17.0 11.0 7.5
Cumulative Totals 7.5 15.5 32.5 43.5 51.0
Additional financing was included for 2000 and 2001, for 10.3 EUS (M) and 2.35 EUS (M) respectively, bringing the total,for the period 2000-2006, to 63.5 EUS (M).
4.3 Science and Technology Agreement
The objective of this accord, signed on January 19, 2004, is to provide a formal basis for cooperation in this domain, with the goal of intensifying and reinforcing research and technological development activities and promoting the application of their results to the economic and social sectors.
Under this agreement pertinent scientific and technological cooperation and cover all sectors of mutual interest. They must be directed toward scientific progress, sustainable development, the consolidation of industrial competitiveness and social and economic welfare. To reinforce this cooperation both parties will promote joint research and development projects; will organize visits and exchanges of scientists and experts; and
