Proposition 50K1349

Projet de loi relatif à la création de la Société Belge d'Investissement pour les Pays en Développement et modifiant la loi du 21 décembre 1998 portant création de la "Coopération Technique Belge" sous la forme d'une société de droit public.

General information ¶

Submitted by

Groen Open Vld Vooruit PS | SP Ecolo MR Verhofstadt Ⅰ

Submission date

July 12, 2001

Official page

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Status

Adopted

Requirement

Simple

Subjects

development aid

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP Open Vld MR

Abstained from voting

FN VB

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Discussion ¶

Oct. 18, 2001 | Plenary session (Chamber of representatives)

Full source

I refer to the written report.

I would like to thank you for this brief and relevant report, Mr. Lefevre, and I would gladly give you the floor.

In terms of development cooperation, the PSC has long defended the thesis that the development of a local private sector is a powerful instrument of economic and social development in developing countries. Local ⁇ , ⁇ those created and owned by local entrepreneurs, participate not only in economic development but also in social development. We also believe that these companies can contribute usefully to sustainable development and the fight against poverty.

One of the fundamental problems of developing countries is the existence of informal sectors of the economy that do not evolve towards the formal sector. This means that these economic sectors do not actually participate in the development of local society. Without legal existence, these informal sectors are not subject to or are imperfectly subject to economic or social legislation. This sector does not participate in the tax and therefore in the feeding of the state budget. How can we transform and grow these informal sectors of the economy into formal sectors of the economy? One of the causes of non-development of enterprises, SMEs, those who settle for their own account in developing countries is a problem of access to adequate financing, whether the offer does not exist, or it is poorly adapted, or the technical skills are lacking, etc.

Foreign direct investment does not always result in the local economy, but instead focuses on subsidiaries of multinationals. Moreover, according to recent studies, investments remain concentrated in a limited number of countries.

The Belgian Investment Society for Developing Countries (BIO) tries to address this problem by attempting to contribute to the development of the local private sector by offering appropriate financing instruments. This company should complement the range of development instruments involved in the Belgian development aid policy. It can invest either in intermediate financial structures or in private operators.

We believe that the role of BIO is to enable the development of adequate financial structures at the local level which should, in turn, take the lead and offer funding tailored to local needs. by

If we can agree with the objectives pursued by the creation of BIO, we cannot stop having reluctance and questions about the structure and how it works. I have already mentioned this in the committee.

I will summarize them in 5 chapters and very briefly: - the priority of BIO’s action towards the least developed countries; - the relationship between public authorities and BIO; - the coherence and coordination of cooperation instruments, in particular the relations between BIO, CTB and DGCI; - the structure and the distribution of power within BIO; and - the prospects of BIO in the Belgian institutional system.

BIO, whose shareholders are the Federal State and the Belgian Investment Company, is constituted as a private company and is governed by the coordinated laws on commercial laws. BIO pursues profitability goals. What is the profitability that will be preferred? The profitability of BIO or the profitability of the intermediate financial structures or the profitability of the companies in which it will invest?

BIO will not be subject to the International Cooperation Act of 1999. It aims to offer funding if the market does not provide it. It will act as a catalyst for attracting capital and performing assemblies. His action will not be aimed at supporting the Belgian interests. Its targets will be the local private sector of the least developed countries and the lower segment of the slightly more advanced countries. Partners will be privileged. Should we not prioritize the allocation of bio-organic resources to the least developed countries? In the explanation of the reasons, it is read that 35% of BIO resources will be allocated to these countries. Most of the least developed countries are in Africa. It can therefore be considered that 65% of the resources will go to Asia, a region that already drains a lot of capital and which remains obviously more profitable than Africa. Even if in the Committee on Foreign Relations, the Secretary of State for Cooperation replied to me that the 35% was a minimum, what guarantees do we have that we will not remain at this minimum?

Do I have to recall that the inhabitants of the least developed countries make up 11% of the world’s population and only 0.4% of world trade? In my opinion, the priority objective of BIO should be to enable companies in the least developed countries to have access to credit in order to embark on global trade. This would be another way of wanting globalization, but the prime minister did not talk about this in his letter to the anti-globalists.

Yes or no, do we want the least developed countries out of sustainable underdevelopment? The PSC group wants it and we think the BIO project is a bit shy about this. Shouldn’t we fear a too large weight of the Belgian Investment Company within BIO? Will short-term profitability objectives not be favored at the expense of long-term objectives? by

Now a word about the relations between public authorities and BIO. BIO is completely independent by its structure and financing from CTB, the implementing agency of Belgian development cooperation, and from the administration of the DGCI. How will then the Belgian international cooperation policy be articulated and how will its coherence be ensured? Does it not risk seeing BIO lead its own life without taking into account the objectives and reversals of the policy decided by the government?

When I asked in a committee whether it was imaginable that no member of the cooperation would be represented in the board of directors of BIO, I was reassured by the Secretary of State’s responses to Cooperation but less reassured however by the evasive signs of the Minister of Foreign Affairs. I suppose it is the one who has expressed himself clearly who is right. It should be noted that there is no management contract between the State and BIO. Indeed, although the State is forced to invest 4 billion francs in BIO, we do not see the means of controlling the use that the State will make of public funds. There are, of course, government commissioners, but will they have the power to influence the BIO policy? I am afraid that not. by

Is the state guarantee for borrowing subscriptions on the national or international capital market, provided for in Article 7, not exorbitant? Indeed, we remember the mechanisms that led to the debt crisis in the 1980s, loans at variable rates in volatile currencies sometimes causing huge bills for the state.

I will now say a word about the coherence and coordination of the cooperation instruments, in particular the relations between BIO, CTB and DGCI. Since BIO would be an independent private enterprise, the fundamental question remains the coherence of all these instruments, the coherence that will exist between the DGCI, CTB and BIO. We have fears about this.

I would now like to address the problem of the structure and the distribution of power within BIO. The law is not sufficiently precise on the statutes of BIO which will be determined later. Therefore, we do not know exactly the future functioning of BIO. The law does not say much about this. by

The capital provides for a equal sharing of power between the federal state and the Belgian Investment Company. This capital amounts to 200 million at 50/50%. However, the federal state could inject up to 4 billion in BIO in the form of profit shares. In this case, how are the powers distributed? Will the SBI retain 50% of the decision-making power, while its contribution of funds would be forty times lower than that of the federal state?

How will the Board of Directors of BIO be composed? By politicians, by specialists, by members of the administration?

Finally, I will address a last point: the perspective of BIO in the Belgian institutional system. Let us not forget that the government has imposed a special law on parliament that, in an imprecise manner, provides for a transfer of powers to federated entities in relation to development cooperation. What will become BIO if necessary, a situation that we obviously do not want?

In conclusion, I believe that this BIO company project is a bet on the future because if the aim pursued is good, I have doubts about the effectiveness of the instrument, as it is conceived in this text. I wish that the Minister regularly informs the Parliament of the developments of BIO in order to verify in particular the statutes of this company. by

Despite all these reservations, we will vote for the BIO project because "one of yours is better than two you will have", especially in the presence of this government.

Mr. Speaker, on behalf of my group, I make some comments against the present bill, because the Flemish Christian democracy has long been strongly engaged in the development sector and even was at the basis of a number of heavy reforms in the sector.

We will approve the draft. Nevertheless, I have some concerns and questions for you. First, we are disappointed that the amounts that the State will make available to the Belgian Investment Society for Developing Countries, the BIO, to be established with the bill, were mentioned in the Memory of Explanation, while no trace of it can be found in the text of the draft itself. There is no management contract in which fixed financial arrangements could be included. Why is it so?

Secondly, we have found that the geographical concentration chosen in the current policy — including in the previous, by entering into bilateral cooperation with only 25 partner countries — does not apply to the functioning of the BIO. There is even no limitation to the 49 least developed countries, the so-called MOLs. This contradicts the conclusions of the ABOS follow-up committee. This will allow the policy to be fragmented. In addition, there may be little coordination or coordination with other instruments of development cooperation.

Thirdly — this is the last point of criticism — it does not provide for an evaluation of the operation of the Belgian Investment Society for Developing Countries. However, the special evaluator is in principle competent for the whole of Belgian development cooperation. There is no doubt that a genuine legal arrangement in this regard would have been recommended.

Mrs. Minister, I would like to hear from you why the government has not met those critical comments, with which we are not alone, because they were also raised by the workplace.

Mrs. Minister, although this is a matter that does not directly belong to the matters that I closely follow and thoroughly know — that is undoubtedly also true for you — I will formulate a number of concerns and questions.

The establishment of the Belgian Investment Society for Developing Countries evokes mixed feelings. Of course, we welcome any additional effort for development aid. We also agree with the objectives of the aid set out in the draft, in particular a special focus on SMEs, equality between men and women, sustainable employment, as it meets the large investment needs in the KMOs sector in the south and recognises the great role of women as an economic actor.

We find it right to be careful not to fall into bound aid. Nevertheless, we are asking a few questions, some of which have already been asked by our colleagues.

First, we have questions in the choice of the instrument and the vagueness of the elaboration of the design. The proposal is mainly limited to the establishment of the company and gives ⁇ little insight into its structure and future functioning. I think that needs to be clarified a little more. For example, two government commissioners are appointed to oversee. This suggests that it is a difficult Belgian construction, of which we have had too many bad examples in this sector in the past.

Second, there is uncertainty about the future of this investment company due to the debate on the federalization of development cooperation. Following the Lambertmont Agreements, it was agreed in principle to transfer large parts of development cooperation within the competence of the communities and regions. Now a new instrument is being created. With the communities and the regions, I know, this has not been discussed. I wonder if that would not have been appropriate in the given circumstances. Is it not a sign of the lack of goodwill of the federal government to not involve the subregions at all?

Third, we follow the goals to a large extent. I wonder if this is the best tool. Does Mr. Boutmans not fall into the opposite of the Flemish wishes? It evolves towards a pure government action aimed at the private sector in the south, without responsibilizing the partners in the private sector. In Flanders, they want to deal with it differently. In Flanders, partnerships and ethical codes aim to build a healthy north-south dialogue rather than ignore the sectors in the north. I think that dialogue or interaction is very important in development cooperation. During the World Economic Forum in Davos in January 2001, Kofi Annan called for more partnership between government and private enterprises, not less.

Finally, in Flanders, with the low budget for development cooperation, an initiative has also been launched to guarantee development funds and projects. This initiative is actually too small to work well. It provides the added value of a state guarantee. In my opinion, it is urgently necessary to consult with the competent authorities in the communities in order to know what can be done in the future with regard to the suspension of development cooperation in order to at least bring together as many forces as possible.

First, I would like to answer the questions asked by Mr. Lefevre; in doing so, I will answer some of the main questions asked by other speakers as well.

First of all, with regard to the attention paid to PMAs, it is planned in the most explicit terms that at least 35% of the funds of this new company will be allocated to requests from the least developed countries. Certainly, the Secretary of State stated, in the commission, that it was not about considering this rate of 35% as a maximum rate, but rather as a minimum rate. by

Meanwhile, private initiatives have appeared to ask for explanations and have shown that so far, 90% of requests come from African countries. So your question about whether our preference would be given to Asian countries, etc. It does not seem to be manifested in the facts at the moment. by

And clearly, the objectives pursuivis and the attention reserved by the Belgian authorities remain well oriented on Africa and the PMA in general. Mr. Leterme noted that it was not intended to limit itself to the concentration countries, but that a wider geographical opening was made. That is right. Of course, we are best acquainted with and continue to ask questions mostly from Africa. However, we now wanted to start from the philosophy that we act towards the countries with the greatest needs and the greatest opportunities. The direction towards least developed countries is therefore very clearly selected among the categories. The second category includes low-income countries. The latter category includes countries with an average income, although limited to the lowest disk of the average income. The reason for this is the following. In the latter two categories, the priority is to initiate good and adequate support for very small initiatives that are developing in different countries. The logic of focusing only on concentration is not the best there. That is why it is not selected. For this which is your second question relating to the position of the public authorities in relation to this initiative, I have studied the notes that l'on m'a transmitted. You understand the situation in which you find me. In any way, it is clearly stated that the composition of the board of administration guarantees an excellent participation of public powers.

In fact, the ten members envisaged for the creation of the board of directors include four persons presented by the Belgian Investment Fund, i.e. the private partner and six persons designated by public authorities. This demonstrates, in an unambiguous way, that the public power assures itself the majority in the board of directors while providing real guarantees.

In addition, two Commissioners will be appointed by public authorities, in this case, one Commissioner by the Minister of Budget and one Commissioner by the Secretary of State for Development Cooperation. It is important to point out here that the commissioner appointed by the Secretary of State, has not only a legal control power but also an opportunity control power. This means that if it considers that a given project or initiative does not meet significant criteria for development, it has the opportunity to veto its rejection.

In this regard, you think that the guarantees are reunited. As for the cooperation between the BIO fund and the BTC, in initiatives that can be supported by the BIO fund, the role of the BTC will be complementary. To clarify this, one has sought a synergy of what the BTC on the one hand and the BIO fund on the other can contribute.

The preparatory study found that in all countries that have developed such initiatives, there is a clear separation between the normal administration engaged in development cooperation, on the one hand, and such initiatives, on the other. In fact, it is intended to avoid that on the ground one economic actor – no matter how interesting and promising – would get more support and thus behave competitively distorting. That is why we have been inspired by the policies of countries that have developed good practices in this context. If they want to support a country, they first examine the local funding agencies, then they support those funding mechanisms. They reach everyone on the ground.

In the event of a need for certain technical knowledge, such as a lack of computer science and multimedia knowledge, which requires increasing work, a support programme for the various initiators should be established independently of the capital contribution. Therefore, a very clear choice has been made that organizes the synergy between the two, without building a monopoly position of one administration.

To avoid the confusion of interests of Belgian companies with this type of initiatives, there is no problem. First, there is the European supervision of any competition distortion for the benefit of its own companies. Second, only very small SME initiatives from developing countries themselves are eligible.

Several people have asked me questions about the evaluation, as well as you, Mrs. Van de Casteele. The Parliament will receive an annual report that will be evaluated. To the attention of Mr. Leterme, I say that in addition to the initial capital of 200 million - 100 million from the budget resources and 100 million from the Belgian Investment Company - distributed over five years, there are 3.9 billion. This will be included in the shareholder agreement. This is not inscribed in the law, in order to escape the annual annuities, but it is indeed established.

Finally, I was also asked how it is with regionalization. The working group that will deal with this will begin its work. This initiative was launched in February 2000. There was already a first embryonic proposal from the Cabinet-Moreels, but that proposal was incompatible with European legislation, because there were too close links with the Belgian business. This had to be reworked.

This was initiated long before the Lambermont Agreements came into being. Of course, this is also one of the issues that will be discussed in this working group.