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China, the EU and Latin America : current issues and future cooperation
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ChallengestoEUPoliciesonDevelopmentCooperationwithLatinAmerica 23 Forum on Aid Effectiveness HLF ), comprising bilateraland multilateral donors as wellasa numberofrecipientcountries hasadoptedimportant documents suchastheRomeDeclarationon Harmonisation 2003 andthe ParisDeclarationontheEffectivenessofAid 2005 .Thelatter inparticular definedanewparadigmintherelationshipbetweendonorsandrecipients calling thelatter partnercountries inaspiritofcoresponsibility.Thedeclaration signedbymorethan100donorsanddevelopingcountries wasintendedtophase outrelationshipsbasedonconditionalityandtotackletheproblemsresulting fromtheproliferationofdonorsandthefragmentationofaid.Furthermore all ofthisisbasedontheprinciplesofownership alignment harmonisationand mutualaccountability. 2.1 DevelopmentCooperationPolicieswithMICs:RelevanceforLatinAmerica Theexistenceof pocketsofpoverty hasbeenclaimedasjustificationfor themaintenanceofaidflowsto middleincomecountries MICs .Buttheaid reductionstoMICshaveoftenbeenjustifiedonthegroundsthattherealproblem inmanyofthesecountriesisinequality notpoverty.Itisarguedthatitisnot justifiabletohandoverexternalresourceswhentheinternalactorsthemselves rejectthe redistributive policies needed to reduce poverty and inequality. However thisargument wouldbecorrectonlyifreducingaid waslikelyto encourageinternalchangesandpropoorpoliciesindevelopingcountries butthis isunlikely. ThereareotherimportantreasonsformaintainingaidtoMICsandtheyare particularlyapplicabletothesituationinLatinAmerica.AsAlonso 2007 has indicated iftheaimistoeradicatepoverty progressmustalsobemadeinthe MICs giventhenumbersofpoorpeopleinthesecountries.Second theaid systemwouldbeestablishingaperversesystemofincentivesandraisingamoral hazardissueifprogressindevelopmentweretobepenalisedbyareductionin aid.Third itisimportanttoavoidbackwardstepsincountrieswhereprogress hasnotbeenconsolidated andincountriesathighriskduetotheirexternal vulnerabilitytofinancialorothercrises.Fourth thesecountriesalsooftenactas regional anchors intermsofeconomicdevelopmentandregionalstability for example MexicowithregardtoCentralAmericaandBrazilwithregardtothe AndeanandSouthAmericancountries .Fifth thefighttoreducepovertyand promotesustainabledevelopmentpartlydependsontheadequateprovisionand maintenanceofglobalandregionalpublicgoodsandthesecannotbeensured withoutthesupportoftheMICs.Finally inadditiontobeingrecipientsofaid thesecountriescanalsobedonorsthroughinnovativeSouthSouthcooperation