V. THE CHALLENGES OF GLOBALISATION
– DANISH INVESTMENTS IN GLOBAL COHESION

In order to create a better world, a commitment to development is needed in a large number of areas. The Government will therefore continue to implement wide-ranging and coordinated initiatives that reflect the many challenges posed by globalisation.

Initiatives, for example, aimed at preventing conflicts, protecting the global environment and responding to humanitarian disasters are all global challenges where Denmark will make important contributions.

As part of its long-term policy, the Government will promote the positive consequences of globalisation in developing countries by continuing to focus on five thematic areas that all pose particular challenges:

• Social and economic development
  
  
• Human rights, democratisation and good governance
  
  
• Stability, security and the fight against terrorism
  
  
• Refugees, emergency relief and regions of origin
  
  
• The environment

The Government presented its planned initiatives within these five thematic areas in the policy paper, A World of Difference (2003). Since then, the initiatives have been refined in the policy papers, Security, Growth – Development (2004) and Globalisation – Progress through Partnership (2005). The Government will continue earlier prioritised initiatives and further enhance them to reflect the changing global challenges.

Through wide-ranging initiatives within the five thematic areas, the Government will contribute to strengthening global cohesion, in which the benefits of globalisation are enjoyed by all.

Economic growth and market access – help to self-help

The Government will step up its efforts to foster economic growth in developing countries – with particular focus on Africa. Without stronger economic growth, the UN Millennium Development Goal of halving poverty will not be achieved in Africa. It is through private initiative and endeavour that Africa’s women and men must generate the economic growth and the social dynamism necessary for eradicating the continent’s poverty.

With the intensified efforts, the Government will strengthen the opportunities for the private sector to act as an engine for economic development – and thereby pave the way for Africa to establish itself as an active player in the global economy.

In the new programme country, Mali, the Government will specifically contribute to generating economic growth by allocating DKK 185 million to the implementation of a new business sector programme – with particular emphasis on promoting female entrepreneurs.

During the next three years, the Government will set aside a further DKK 100 million annually to measures aimed at securing investments, innovation and entrepreneurship primarily in Africa. Development is about change, and this new initiative will make it easier for Africa’s entrepreneurs to contribute to increased economic growth by securing:

• Investments of a further DKK 50 million in the form of mixed credits to new businesses and to strengthening the business community’s framework conditions through the enhancement of infrastructure within, for example, the energy, transport and telecommunications sectors.
  
  
• Innovative solutions of a further DKK 10 million to public partnerships with the Danish business community that open new ways and opportunities for especially the contributions of women to economic growth in Africa.
  
  
• Entrepreneurial support of a further DKK 40 million through the B2B programme, with focus on Africa’s businesswomen, with the aim of enabling Africa to better exploit its full economic and human potential.

Likewise, the Government will pave the way for enhanced economic growth by increasing its contributions to debt relief. Cancellation of debt improves developing countries’ access to commercial credit, and is therefore an important prerequisite for securing investments and economic development in poor countries.

For many years, Denmark has been an advocate of increased debt relief. The Government places great importance that words are translated into action in situations when developing countries indeed fulfill the criteria and reforms that were required as a precondition for debt relief. In recent years, especially in connection with the G8 Summit in 2005, there has been strong international focus on debt relief, and donor countries in general have committed themselves to intensifying efforts within this area.

Consequently, the expenditure on debt relief will rise in the coming years, also for Denmark. But with the Government’s 0.8 per cent guarantee, there will be a possibility that development efforts in other areas may also be increased.

At the same time as the focus on strengthening framework conditions for the private sector, the Government will step up its trade-related technical assistance, so that developing countries are better able to participate in international trade. In connection with the conclusion of the Doha Round, the assistance to the Integrated Framework for Trade-Related Technical Assistance will be doubled to an amount equaling a total of DKK 30 million per year. This doubling of assistance is conditional upon other donors also increasing their contributions.

The focus on strengthening trade-related conditions will go hand in hand in Danish trade and development policy. Internationally, Denmark will press for all countries in Sub-Saharan Africa to be offered tariff and quota-free market access. Freer trade will be absolutely crucial if developing countries are to attain the full benefits of globalisation. Denmark will work hard for a rapid conclusion of the Doha Round in the WTO that places a strong focus on the conditions for developing countries.

If poor developing countries are to achieve the necessary economic growth, there is also need for a strong focus on education and training. Education and training is an investment in the human resources – and without education and training, the opportunities for competing successfully in a global market are very limited.

Within the frameworks of the Danish business sector programmes, the Government will strengthen its efforts within vocational education and training – especially in regard to women. Lack of qualified labour is one of the key barriers to companies’ growth opportunities in many developing countries. Many young people who complete primary education cannot be offered opportunities for further education. Through the development assistance, therefore, the Government will work to ensure that as many young people as possible are offered the opportunity to take a vocationally oriented adult education and training programme that can lead to employment and income.

In order to prepare future business leaders in programme countries for globalisation’s challenges, the Government will between 2007 and 2011 offer a total of 100 young people a one-year scholarship in Denmark (at MBA or equivalent level). The initiative will focus particularly on providing young, female business leaders with managerial tools and an international network that enables them to contribute effectively to future economic growth and development. The initiative, which is financed annually by DKK 10 million channelled through Danida’s central fellowship funds, is an investment in the human resources that are crucial for enabling developing countries to attain the full benefits of globalisation. At the same time, the initiative will strengthen the interaction between future business leaders in developing countries and the business community in Denmark. Emphasis will be placed on introducing these future business leaders to the strengths of using environmentally friendly technology and sustainable production methods.

For several years, Denmark has provided economic support to help developing countries establish poultry farms, in order to provide a commercial and food-based livelihood. The outbreak of avian flu and the risk of the disease spreading have threatened to kill millions of poultry in poor developing countries. In the development cooperation with Danish programme countries, the Government will therefore take care to contribute to efforts aimed at preventing the spread of veterinary diseases that can have far-reaching detrimental effects on the economy and health.

Partnership for Progress and Reform – Stepped-up efforts

Through a strengthened Partnership for Progress and Reform, the Government will promote dialogue between Denmark and the countries in the Middle East as well as support specific reform and democratisation initiatives.

The cartoon affair, which reached a climax at the beginning of 2006, can be seen as an illustration of the risk of a cultural clash and emphasises the need for enhanced dialogue. This in no way implies that Denmark should abandon or tone down fundamental values. On the contrary, there is need for us to obtain a better mutual understanding and eliminate the many prejudices and misunderstandings that flourish.

Through the cooperation projects implemented under the Partnership for Progress and Reform, Denmark has been able, despite the cartoon affair, to maintain a constructive exchange of views; not just to foster mutual understanding but also to exchange viewpoints and knowledge regarding reforms and democratisation processes. The Government will support the forces in the Middle East desiring to reform both the political and economic system in the region. And among those forces there continue to be many that wish to find partners in Denmark and take inspiration from a Scandinavian model.

The Government is firmly determined to maintain its pursuance of a pro-active policy in relation to the Middle East. The thematic programmes encompass key issues such as human rights, gender equality, media and youth. From 2007, the Government has set aside a further DKK 25 million to the the Partnership for Progress and Reform, primarily to strenghten the Danish representation in the region. Partnership for Progress and Reform will in 2007 have a total budgetary framework of up to DKK 125 million. A further increase in the framework is expected in the coming years.

Reconstruction and conflict management – a strong Danish profile

Denmark will continue to contribute actively to the resolution of violent conflicts and to the promotion of peaceful and democratic development in the world’s flashpoints. Through the Danish membership of the UN Security Council in 2005-2006, the Government has worked purposefully to strengthen the linkage between security and development – with special emphasis on conflicts in Africa.

Denmark has been one of the most active countries behind the establishment of the UN’s new Peacebuilding Commission, which is designed to strengthen the international community’s capacity to prevent countries falling back into conflict, which up to now has happened in more than 50 per cent of cases. A better linking of the military and humanitarian efforts with longer-term reconstruction assistance aims at ensuring durable peace settlements.

In 2007, the Government will contribute DKK 50 million to the Commission’s work. Together with the Danish contribution of DKK 50 million allocated in 2006, this will place Denmark as an important donor to the Peacebuilding Commission. Denmark will exert special effort to ensure the Commission strengthens the role of women in post-conflict situations – especially in Africa.

Denmark will devote special attention to efforts aiming at contributing to conflict resolution in Africa. The Government will contribute to peacebuilding and also support efforts to build the African security architecture, for example by giving a commitment of DKK 5 million in 2007 to Mali’s Peacekeeping School – in collaboration with the Danish military.

In crisis-hit areas, the military efforts must not stand alone, but must be combined with emergency relief and reconstruction assistance. In situations where the activities of civilian organisations are impeded, the Government is ready to deploy military forces to undertake these tasks through active civilian-military cooperation. The Danish efforts in Iraq, Afghanistan and Sudan must help these still conflict-ridden countries to consolidate the political advances that have been made in all three countries. For example, targeted support towards building a modern justice system will aim to help these countries to respect international human rights.

Humanitarian involvement and regions of origin

In recent years, humanitarian crises have hit the world hard. The Government will continue to assign very high priority to assistance to disaster-hit areas and will allocate a total of over DKK 1 billion to humanitarian efforts in 2007. As a concrete measure to emphasize the humanitarian involvement, the Government will allocate DKK 50 million to the UN Humanitarian Fund in 2007, which will enhance the UN’s ability to react swiftly to unforeseen humanitarian crises and take effective action to address the world’s forgotten crises.

The Government has continually stepped up its region-of-origin assistance through active interaction with international organisations and the Danish NGOs, which have considerable experience of working in regions of origin.

The Government will continue to allocate up to DKK 300 million per year to improving the living conditions of both displaced people and local populations. Through active Danish region-of-origin efforts, refugees and internally displaced people can be given the opportunity to return and establish themselves either where they come from or close to their home regions.

In new programmes, emphasis will be placed on helping to build the capacity to cope with the numerous refugees that reside in many developing countries – in order to ensure that the refugees are treated in accordance with international conventions. Effort will be made to adopt a regional approach to solving the problems so as to ensure that the refugee problem is addressed on both sides of the border. This applies, for example, to the Somali refugees in the Horn of Africa.

Denmark will continue to develop innovative linkages between the national refugee policy and the efforts in regions of origin. The positive lessons learned with respect to Afghan refugees will be applied in relation to Iraqi refugees.

Environment – a sustainable future

Poverty and an impoverished environment are closely entwined, and poverty cannot be eradicated without action being taken to address the environmental problems. One of globalisation’s greatest challenges is to ensure a good environment, where environmental problems are often cross-border in nature. In its development assistance, the Government will maintain its high priority of a stronger global environment.

The Government will carry out targeted efforts to contribute to a sustainable management of the environment and natural resources. In the new programme cooperation with Mali, water and energy will be in focus in the programme to promote better management of natural resources.

The world’s poorest are directly dependent on natural resources for their survival. This applies to the supply of food, water, fuel and building materials. However, the ecosystems which ensure that crops can grow in the field, that water and air is purified, and that the climate is regulated and nutrients converted are – as the UN Millennium Ecosystem Assessment has proven – under pressure. Sustainable management of the environment and natural resources is very much a question of good governance and of how to strengthen the ability of women to influence their own living conditions.

At the same time, climate change is a growing development policy challenge that makes demands on adaptation, in a way which ensures that the living conditions of vulnerable population groups in developing countries do not deteriorate.

The initial experiences with the Danish Climate and Development Action Programme have been reaped in Vietnam, Tanzania and Mozambique. The action programme is used partly to carry out a climate check of the Danish assistance, in order to ensure that the development activities implemented are climate-safe. In 2007, the programme will be widened to include other climate-vulnerable Danish programme countries, such as Mali and Bangladesh.

The efforts carried out under the special environmental assistance to assist developing countries in building their capacity to develop Clean Development Mechanism (CDM) projects will be widened to include a number of poorer developing countries – primarily in Africa. These efforts form part of the strategy on CDM, which the Government will present in parallel with the development policy priorities.

At the same time as the developing countries must be helped to adapt to the climate changes that are inevitable, the efforts to prevent climate change must be intensified. Increased use of sustainable energy plays a crucial role in climate change prevention, and it is important that developing countries are also afforded access to clean and sustainable energy forms.