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A conversation with Commissioner Jozef Síkela

The multilateral system is coming under attack. Why should the European Union remain at the table?

We are under pressure — but stress can also make you more productive. It is pushing us to streamline our policies, get better and set priorities. Multilateralism is under pressure but this isn’t the end. I don’t believe in the G1, or the G2 or G3, the idea that only a small group of large countries can govern the world alone. 

I come from the Czech Republic, our history shows that this approach does not work because countries want to make their own sovereign choices and decide for themselves.

In Europe, every time we tried to isolate ourselves, or raise barriers, it led to disastrous consequences. I deeply believe in the value of the multilateral system and so do our partners. In Sevilla, I have exchanged with many partner nations who tell us they need us too. 

I stress the term partner because we need partnerships of mutual benefit — this is not charity. 

What does partnership mean for Europe? 

It means empowering countries through industrialization, job creation and sustainability, while creating a network of stable, mutually beneficial agreements that create value for us too. 

We have an interest in investing in sustainable development for a very simple reason.

Climate change will not disappear just because we cease to talk about it as much as we did before. It is not something you can erase with an executive order. It does not work like that.

We are also investing in partnerships at a time in which there is a global race to secure raw materials and critical minerals. 

We want this to be a win-win. To make it a win for both, we will also have to carry out reforms, become more focused, streamline and identify the order of priorities. We will have to use better tools and truly measure the impact of the policies that we carry out so that they generate real value because not everything that we do ends up making the impact that we aimed or hoped for. 

That means better value for money. 

It does. And it can’t just be public money. Europe has created a lifestyle, it is a superpower with the highest living and social standards in the world. I remember the days of the Iron Curtain, I guarantee you we didn’t have this lifestyle. So we have built something that we can be proud of. 

But Europe only represents 5% of the world’s population – and we contribute to 42% of the world’s development aid. The ratio is not proportionate. This is also happening at a time in which others are stepping back from development funding programs. Our share will therefore increase. This is mathematics. Frankly speaking, Europe cannot become the lender of last resort. So we will have to find alternative solutions. And the most promising is engaging the private sector to a larger extent. Bill Gates explained this in a way that makes sense: some things are not for business to do, but philanthropy. But to be a philanthropist, you need to have generated a certain level of wealth. So the two are not the same, but they are connected. 

Business can help to create an environment that generates wealth and jobs. That is ultimately beneficial for our partner countries because it enforces legal protections, investment rules and policies. It also creates a more stable environment. We, as the European Union, can help to de-risk through public investment. Our development banks can provide medium and long term financing. In some regions, it is very hard to secure financing in local currency, for example, and interest rates can be prohibitive. That’s an area where we can step in. We can help to promote a business environment. 

Our partner countries have an interest in creating their own ecosystem for business, they want to generate value and wealth locally. As I said, this idea that development aid is some form of charity no longer works. They want partnerships and so do we. That spirit also responds better to the political mood in some of the regions where we want to develop a partnership.

Are you disappointed that the US did not participate in this conference, reversing decades of international development programmes? Many of which some of these countries relied on and now have to face the repercussions of the deep and abrupt cuts to the USAID program.

I am not surprised. I expected it.

There have been many signals from the administration in the past six months that go in a direction that would suggest this is no longer a priority for the United States. We regret this decision because the US has always been a very strong partner. We have a different view. Europe is and will remain a stable and predictable partner.

But we will have to be louder about the work that we do and the contributions that we make in the future. It is only fair that our commitment, while others pull back, is recognized. We are a global actor and we pay where others don’t. And yet, we are not appreciated to the extent that we should. 

In some countries where the European Union is by far the biggest contributor, there is an impression that China does more, even Russia. That is wrong and we have to be more vocal about it. We are not just a payer, we are a player. This is not arrogance.

Our partners should recognize that mutually beneficial cooperation implies an effort on our part and that our approach is different from others. We don’t have a hidden agenda, we are not looking to exploit the resources of countries in difficulty under the pretext of being helpful. Our programs are based on social balance, the highest standards and best practices. There is independent data that supports our claim. It’s only fair that our partners recognise that too. 

What should Europe expect from its investment, not so much in return of, but as a result of?

If we talk about partnership, both sides should win. Our European taxpayers are right to demand accountability, transparency and better communication. These are some of the things that we have to improve and, where needed, change. Before I mentioned that some of our partner countries don’t recognize the contributions that we make, so we need to better communicate with the civil society, NGOs and the business community. Some of the resentment that exists, often because of the legacy of colonialism, does not reflect the current nature of our relationship. We must change that perception. 

Secondly, our message to Europeans is that development is a strategic investment. Be it in Africa or Latin America, we are investing in our future because we will need stable partners, we need security and we will need access to raw materials and rare earth. These are strategic questions. We don’t seek control, we don’t want to exploit them. But as partners we want to work together on projects that are good for both. That’s our expectation. 

Lastly, we don’t want to give the impression that we are there to “educate”. That doesn’t mean we will give up on our values. We believe in democracy, the transformative power of education and equal rights for men and women. This is a real issue. But we can’t impose values, but what we can do is show the benefits they bring. 

As a result of the severe cuts in development aid from the United States, will the world become more dangerous too? 

Aristotle said that poverty is the parent of revolution and crime. Today, lack of development can lead to instability. Take the Sahel, for example. To build a stable future in extremely fast growing populations, like Africa and some regions of Asia, the only way is to provide opportunity. The same goes for migration. Why do people migrate? Because they lack perspective, there is war, hunger, and instability. They do not see a future. Then, there is the dramatic impact of climate change. This is why sustainability and development programs matter. 

This isn’t an anti-immigration discourse either. The average age in Africa is under 20 years old, in Europe it’s over 40. We will need people to come and work here. This is not to say “let’s build there, so they don’t come here”, the relationship is more complex. What we are saying is that we recognise the enormous potential that a continent like Africa has, and we can work together to industrialize, develop interconnectivity and electrification to a much higher degree. We want to partner to develop the local grid and build hydropower plants. That is essential for clean energy and clean water. Let me give you one specific example: in Cameroon, we have invested as the European Union in the Nachtigal dam on the Sanaga River, which delivers about 420 megawatts of clean energy. That’s about 30% of Cameroon’s electricity demand. 

These projects are game changers.

Many African countries are rich in natural resources, but they are not able to process and create local value. They also don’t control the value of their exports because they end up in the hands of foreign companies that do not have an interest in developing a sustainable network. We have an interest in doing so, we have the know-how and we have the means. When we talk about industrialization, we are talking about job creation, better standards of living, access to education, internet and digitalization. Our approach is to say: we will partner to build the bridge, but after that, you will operate it, maintain it and build more. 

Through the Belt and Road Initiative, China has sought to penetrate key industries in Africa, parts of Asia, and Latin America. The Union is looking to counter that through the Global Gateway. Why should these regions choose Europe over China? 

To be very direct, our offer is simply much better. 

This isn’t just about the volume, the amount of money you put on the table, but the form. On the surface, we both offer financial contributions, cooperation and grants. But China has a completely different approach. They expect a return, a big reward, usually in the form of high interest rates and a stake in the capital of some of the most strategic industries a country can have. At the start, it looks like an attractive offer, but it becomes a trap with time. If they can’t deliver, China will take over the project or it will make you pay a very high price on the initial investment through interest payments. 

We have a different approach. We are offering favorable financing too. Our rates are below the cost of the sovereign risk. The Chinese may offer rates that are lower initially, but we would never use interest rates to trap a partner country. We don’t want a project to fail to own it later. Look at the Hambantota Port in Sri Lanka. They couldn’t repay the loan to the Chinese and China responded by taking control of the lease unconditionally for the next 99 years.  Our approach is different. If a country can’t pay, we can review the terms of the loan, but we won’t take possession of the asset. What we want is clear alignment from the beginning. We want to know what the regional authorities need, whether it fits to our stands, and whether it is sustainable. Then, we’ll offer to work together only if it works for both. 

In practical terms, what does that mean? 

Since I mentioned the port in Sri Lanka, let me give you a concrete example of how we do things differently. And better. We recently signed a memorandum of understanding to further develop the Lobito Corridor. This is a flagship project that would connect the Democratic Republic of the Congo, Zambia and Angola. It connects the three, which is beneficial for trade in the region as it is, but the goal is also to make it an international hub for trade, including raw materials. It will also help to develop more projects around and connected to the corridor. This creates an ecosystem for jobs locally and trade. About 60 million young Africans will enter the workforce in the next five years. You can see why it matters. I could go on to cite dozens of projects not just in Africa, but also in Latin America and Asia. 

These projects and the future of the Global Gateway depend largely on consistent funding. The Union is about to enter discussions around the next European budget, the MFF, and priorities are going to change. Do you worry your own portfolio could be affected by budget cuts in this reordering of priorities?

Attending priorities like defense and security is right, it is urgent. But in the urgency of the moment, we shouldn’t lose track of the long-term strategy. We shouldn’t forget to be forward looking. When it comes to my portfolio, many of our projects will run over 10 years, in some cases even longer, so I need to have the ability to make clear commitments and deliver. If I commit to something, I have to deliver. That means that I will require certain instruments, one of which is budget, so that the European Union is able to do the right thing and, hopefully, deliver on its word. If we only make decisions on the basis of urgency, we risk losing our strategic approach. Without a strategy, you can’t have an impact on the future. And that would be a mistake. We can’t just improvise, we need a plan.