Cambridge University Press The Journal of Modern African Studies

Private sector development as poverty and strategic discourse: PSD in the political
economy of EU—Africa trade relations

Author(s): Mark Langan
Source: The Journal of Modern African Studies, Vol. 49, No. 1 (MARCH 2011), pp. 83-113
Published by: Cambridge University Press
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J. of Modern African Studies, 49, 1 (2011), pp. 83-113. © Cambridge University Press 2011
doi:io.ioi7/Soo22278Xioooo662
Private sector development as

poverty and strategic discourse:
PSD in the political economy of
EU-A frica tra de re!a tions *
Mark Langan
Department of Politics, University of Stirling, Stirling FKg 4LA,

United Kingdom
Email: mark.langan@stir.ac.uk
ABSTRACT
Private sector development (PSD) has emerged as a cor

strategies aimed at making free markets work for ' the poo
business sector capacity in low-income states. PSD initiat
stood, however, as technical exercises aimed solely at pro
through business competitiveness. Instead they serve as
through which developmentally questionable market-ope
lised by donors in pursuit of lucrative commercial oppor
economies. Examining the European Union's (EU) PSD f
relations with the African, Caribbean and Pacific (ACP) s
amines the utilisation of PSD discourse in the 'devel
Economic Partnership Agreements (EPAs). PSD discourse
'double-veiling' of asymmetric ACP-EU trade ties via l
equitable market-opening and the trickle-down of busines
Nevertheless, the reality of reciprocal trade structures c
anaemic PSD resources bears little resemblance to the str
In particular, the interventions of Europe's Centre fo
Enterprise (CDE) in cotton and textiles sectors in East Af
dubious outcomes for 'development' in ACP former colon
* Many thanks to Rorden Wilkinson, Sarah Bracking, James

Pandrapragada for their insights on the issues and their encouragement
anonymous reviewers for their comments and suggestions. Any errors or
entirely my own.
84 MARK LANGAN
INTRODUCTION
Private sector development (PSD) has emerge

recent donor strategies aimed at making free m
Institutions such as the Organisation for Ec
Development (OECD) (2007: 11), USAID (2008
for International Development (DfID) (2008
Commission (EC) (2003: 2) have uniformly arti
initiatives in support of pro-poor economic gr
This donor PSD support involves assistance to b
low-income countries in areas including prod
logical upgrading, marketing strategies, social
dards, and capacity-building in sector associati
initiatives have additionally been portrayed
means of aligning trade liberalisation agen
Organisation (WTO), as well as in bilateral trad
development objectives. Improved business sect
cording to donor PSD frameworks, enable low-
advantage of market liberalisation and to ac
through ' an equitable distribution of the fruits
(ACP-EU CPA [2000] 2006: 6).
PSD agendas cannot be understood, howeve
ercises aimed solely at improving business comp
the well-being of vulnerable citizens in dev
itiatives serve a highly strategic role as 'norm
sions through which developmentally question
been rationalised by donors in pursuit of lucra
nities in emerging economies (Langan 2009:
works, moreover, often work to construct publi
trade systems while failing to materially assis
Taking the example of the EU - a leading prop
this article examines the symbolic functions of
within Europe's bilateral trade and 'developm
the African, Caribbean and Pacific (ACP) count
PSD framework in the timeframe of the ACP-
Agreement (CPA) and the European Commis
market-opening in ACP states under Economic
(EPAs), the article draws attention to the politic
concessions. Specifically, PSD discourse is under
tool in the 'development branding' of EPAs thr
that inoculate the European Commission from c
asymmetric trade arrangements with ACP form
PRIVATE SECTOR DEVELOPMENT IN EU-AFRICA RELATIONS 85
Through an overview of Europe's key PSD mechanisms, notably the
ACP-EU Centre for the Development of Enterprise (CDE), the article
then contrasts the effectiveness of EU PSD frameworks in the establish
ment of a legitimising 'pro-poor' discourse with the failure of Europe's

PSD interventions to facilitate meaningful business development in ACP
former colonies. In this assessment, the article explores the example of
CDE assistance to textiles operations in East Africa as a useful illustration
of how Europe's modest PSD funds are directed in such a way as to deny
revenues to ACP business sectors that could possibly generate the broad
based social prosperity enshrined in Europe's PSD discourse. The focus on
East African textiles also demonstrates how the limited PSD finances that
are distributed by Europe's 'development' institutions often serve as de
facto subsidies to European commercial actors whose business activities, in
many cases, result in regressive outcomes for indigenous firms, workers
and host communities in ACP states.
The article, in this analysis, raises important questions regarding the

nature of the broader PSD agenda in the 'post-Washington' Consensus.
Contrary to donors' strategic discursive alignment of asymmetric free
trade agendas to human development outcomes, it demonstrates how re
cent attempts to ' reform' market processes in favour of ' the poor' have
proven illusory. As in the case of ACP-EU co-operation, PSD initiatives
sustain a legitimising discourse of poverty reduction through free market
activities. Nevertheless, the reality of asymmetric trade structures com
bined with anaemic donor PSD resources bears little material resemblance
to donor-constructed images of pro-poor business sector growth.
Consequently, PSD initiatives are understood to serve primarily as legit
imising concessions for asymmetric trade arrangements. Nominal goals of
materially supporting pro-poor business sector growth meanwhile lag as a
secondary and mostly unrealised function. The article accordingly ques
tions whether PSD initiatives promote poverty alleviation through equi
table economic development or whether, paradoxically, PSD policies in
fact work to (re-)embed poverty through the diffusion of a legitimising
discourse that immunises developmentally dubious trade systems from
genuine reform.
The article, in this discussion, is structured as follows. It first explores
the political potency of discourse in the context of North—South trade
relations and examines the significance of contemporary pro-poor PSD
narratives in their public representations of free markets working for
vulnerable citizens in developing states. It then focuses on the strategic
utilisation of PSD discourse in Europe's bilateral relations with the ACP
countries and the symbolic significance of PSD initiatives as normative
86 MARK LANGAN
concessions in the rationalisation of developmentally qu

Finally, the article examines the material capacities of E
instruments, and assesses the chief objectives and prim
PSD as a policy platform in ACP-EU relations as we
broader 'post-Washington' consensus.
PSD INSTRUMENTS: FROM TECHNICAL EVALUATION TO
DISCURSIVE ANALYSIS
PSD frameworks have been firmly advocated b

in donor institutions as the means of making f
poor' (DfID 2008: 23; EC 2003: 2; OECD 2007: 11; USAID 2008: 3).
Ostensibly promoting vibrant and innovative business sectors in low
income states, PSD initiatives have been portrayed as an essential route for
encouraging livelihood creation in the global South. In addition, they have
been lauded for facilitating spin-off employment and (hence) social pros
perity in vulnerable communities and for generating revenues conducive
to the creation of socially responsive welfare states (DfID 2008: 9—12).
Donor institutions have accordingly sought to undertake PSD interven
tions in a number of areas, including efforts to overcome supply-side
constraints at the micro-level of the firm, as well as to establish a business
'enabling environment' at the meso-level of domestic institutions and at
the macro-level of international trade negotiations.
Schulpen and Gibbon (2002: 3) offer a comprehensive breakdown of
these various levels of possible donor PSD interventions (see Table 1).
As their table indicates, PSD assistance at the micro-level can take
the form of direct support to businesses, for instance, through assistance to
marketing strategies and the development of new product varieties. At the
meso-level PSD interventions can include assistance to business lobbying
associations, for instance, through donor provision of training to man
agement staff. At the macro-level, meanwhile, PSD assistance can be
rendered to national trade ministries in order to promote a domestic de
velopment programme that pays adequate policy attention to business
sector growth in free market conditions.
To date considerable attention has been paid to the technical assess
ment of donor PSD initiatives. This policy-focused literature has devel
oped with a view to improving donor efficiency in the delivery of PSD
assistance as well as the current effectiveness of PSD programmes. The
growing literature includes Kurokawa et al. (2008), which offered detailed
assessment of the Japanese development agency's 'One Village One
Product' (OVOP) programme and that initiative's role in supporting
PRIVATE SECTOR DEVELOPMENT IN EU AFRICA RELATIONS
Table i
Levels and elements of private sector development
International
(Countries) Macro (State) Meso (Branch) Micro (Company)
Macroeconomic policies Institutional
infrastructure
Free and rule
- Trade policy - Chamber of - Access to
governed
- Privatisation commerce technology,
international trade
- Access to - Employers' expertise and
international - Exchange rate and organisation capital
markets monetary policies Manpower
- Debt reduction - Public budgets - Labour - Management
unions and
entrepreneurship
- Donor policies and - Labour market policy - Intermediary
Observance of labour financial - Market access
practices (including
standards institutions and information
coordination)
- Fiscal policy (tax) - R&D
- Inflation reduction institutions
- Financial institutions - Training
(capital market) institutions
- Balance of payments - Sector-level
regulation market
institutions
Physical infrastructure and

human capital
- Education and skill

training
Health
Roads, railways,
harbours, electricity,
telecommunication, etc.
- Intellectual capital
- Social security and
pension schemes
Good governance
- Fight against corruption

Transparency
- Legal system
Source: Schulpen & Gibbon 2002: 3.
poorer entrepreneurs through attention to niche markets. It also includes

Brewster and Njinkeu (2008), who assessed PSD initiatives in the context
of donor institutions' broader Aid for Trade agenda.2 They provided a
' summary of lessons from various efforts to strengthen the capacity of the
private sector in low-income countries', and drew attention to a lack of
bona fide co-operation amongst donor institutions [ibid.: 369). In addition,
88 MARK LANGAN
the literature includes ADE (2005), a detailed technical i

the European Commission's PSD measures which highlig
policy implementation including a lack of strategic visi
Commission staff.
PSD initiatives cannot be understood, however, as
instruments aimed solely at promoting poverty alle
improvements to business competitiveness in low-in
concessions constitute a highly strategic platform upon
have publicly insisted that politically contentious round
and bilateral trade liberalisation will facilitate devel
'smooth and gradual' integration into 'globalised' ma
CPA [2000] 2006: 28). Donors' repeated emphasis on th
PSD interventions in support of pro-poor business growt
a series of legitimising narratives that together comprise a re
This PSD discourse has served as a politically potent dev
inally 'bridge' donors' trade liberalisation agendas to leg
goals of poverty alleviation (Langan 2009: 425). Beyond te
therefore, critical attention to the discursive elements of
is a necessary concern for those wishing to understand the f
'private sector development'.
Critical focus upon the political potency of words, text
has, in fact, a distinguished history in the study of Nor
Wilkinson (2009: 599) explains in his analysis of power re
WTO: 'It has long been acknowledged that language -
ses, metaphors, linguistic constructions that we use and
that they conjure up — is not merely a politically neut
municating or a medium that is separate from hierarch
of power ... rather, language is an important tool in sh
cultural and political make-up of a society.'
Linguistic constructions have received particular atten
thematic content of policy makers' utterances have bec
within a governing ' discourse': that is, when the languag
stakeholders has become governed by dominant ideolog
define the limits of ' acceptable speech' and, consequent
acceptable policy practice within a hegemonic 'discu
(Butler 1997: 128) This critical focus on the political sig
course derives from the work of Foucault ([1969] 2009: 2
banish the 'natural' and apolitical veneer of discourse an
'tranquillity' in constructions of power.
Many notable contributions to the study of North—Sou
metries have, in this vein, utilised modes of discourse a
(1988: 439), for example, has explored how 'development' discourses
have brought' problems' into being by constructing certain social issues as
falling within the legitimate purview of donors. Cox (1981: 144), mean
while, working broadly within a neo-Gramscian analysis of international
hegemony, has considered the 'fit between power, ideology and institu
tions'. He has emphasised the significance of ideological narratives in the
maintenance of power within core-periphery divisions. More recently, as
mentioned above, Wilkinson (2009: 598), from what he terms a 'critical'
historical institutionalist perspective, has examined the ' crisis discourse' in
the WTO and the ways in which this has discursively compelled devel
oping countries to acquiesce to further rounds of trade liberalisation.
Kothari (2001: 142) in similar fashion has critiqued the discourse of'par
ticipatory development' and, with reference to Foucault, has considered
participatory narratives as a means of entrenching donors' control over
the lives of'the poor'.
Within this critical tradition, it is possible to explore how donor PSD
discourse has been used to ' encode' legitimating moralities within donor
institutions' developmentally questionable economic engagement with
former colonies (Bernal 1997: 448). This requires attention to the ways in
which PSD discourse perpetuates donor power through analysis of how, as
Van Djik (1993: 249) states, discursive formations may entail 'support,
enactment, representation, legitimation, denial, mitigation, or conceal
ment of dominance'. In addition, it is necessary to recognise the way in
which legitimising PSD narratives, in this task of concealing or rationa
lising dominance, can construct conceptual images that bear little resem
blance to the social 'reality' that they claim to represent. Articulating
this point, Fairclough (2005: 6) emphasises that 'discourses include
representations of how things are, and have been, as well as imagina
tions — representations of how things might or could be, should be ...
[discourses may act as] projections of possible states of affairs, "possible
worlds"' (emphasis added).
It is necessary to stress that these possible worlds may be illusory — in the
sense that they portray sanitised or stylised accounts of how systems ought
to operate yet fail to accurately reflect existing social relations. These
illusions may be also be strategic in that they work to publicly claim that
normatively rightful states of affairs do (or will soon) exist in a manner that
veils existing social and economic inequalities within operating systems.
It is necessary to consider these strategic illusions and veiling functions of
discourse fully when assessing PSD instruments. Attention to discourse can
illustrate how PSD instruments provide a veritable 'Rosetta Stone'
through which donors' pursuit of rapid market-opening in developing
MARK LANGAN
9«
countries is publicly translated as a vehicle for pro-po

conducive to the social well-being of vulnerable people in
(Langan 2009: 418).
PSD AND THE 'POST-WASHINGTON' CONSENSUS: FREE TRADE
AS EQUITABLE DEVELOPMENT?
The strategic role of PSD concessions in the creation of a legiti

poor discourse of equitable trade liberalisation can be seen clea
donor communications. The publications of the OECD, not
provided the 'policy entrepreneurship' behind the recent e
of PSD agendas within the broader donor network.3 T
Development Assistance Committee (DAC), in particular, has v
advocated PSD agendas as a means of fusing free market-led
models with moral goals of poverty reduction. For example, i
(OECD 2007: 11) publication Businessfor Development:fostering the pr
reiterates clear pro-poor narratives of equitable business secto
Eegitimising ' development' themes are repeated time and again
sector development is an essential component of economic gro
poverty reduction in developing countries... A vibrant and comp
vate sector can also empower poor people by providing them w
goods and services at more affordable prices' (emphasis add
terventions, in these public narratives, are presented as a vital
within donor strategies aimed at giving 'poor people' the re
improve their own lives. Providing a historical justification f
sector-focused approaches to international development,
(2007: 21) publication goes on to explain that:
Over the years different paradigms have prevailed in development
emphasis has shifted from basic needs, to capabilities, to structural
programmes and the provision of a market-friendly business enviro
nowadays the development of the private sector is regarded as essential. The
this statement is simple: poverty reduction is the main objective of d
co-operation ... economic growth is essential for development, and g
best achieved through the private sector, which in turn needs to be
promoted [emphasis added],
PSD initiatives are thereby presented as a logical and ' comm

solution to the problem of poverty that fits modern approache
opment' in the global South (cf. Wilkinson 2009: 600). A 'marke
business environment is viewed as an unchallenged vehicle for
reduction while alternative development paradigms are v
historical anachronisms. In these terms, the OECD DAC-co
PRIVATE SECTOR DEVELOPMENT IN EU-AFRICA RELATIONS gi
discourse of PSD facilitates the development branding of donor-sponsore

free market-led growth strategies and rationalises associated private sect
initiatives in developing countries as ' the only game in town' in pro-po
development processes (cf. Clement 2003: 359).4
Moreover, PSD frameworks — through discursive emphasis on linkage
between liberal economic policies and pro-poor development objectives —
have acted as a lynchpin of the 'post-Washington' Consensus (Langa
2009: 422). Specifically, PSD initiatives have provided a policy platform
on which donors have insisted that they now recognise the need to assis
economic growth in developing countries through market-friendly inte
ventions - in contrast to strict laissez-faire approaches to economic lib
alisation in the allegedly defunct 'Washington Consensus' (Stiglitz 2004:
10—3). Accordingly, PSD policies seek pro-market solutions to poverty a
leviation while also ensuring that the state does not unduly interfere wi
the decisions of private sector agents. In a rejection of development
approaches to economic growth, the OECD (2007: 17), for instance, insist
that developing countries must refrain from interventionist policies th
might perpetuate 'an anti-private sector bias'. In this context, PSD fra
meworks encourage states to perform '"enabling" or even regulator
tasks ... [yet] refrain from tasks or interventions which either jeopardi
the functioning of the private sector or which " crowd it out"' (Schulpen
Gibbon 2002: 2).5 PSD interventions, in this manner, sit firmly within
'post-Washington' Consensus notions of the need to correct (rather tha
replace) free markets and to make them work more effectively for the well
being of'the poor'.
Within this consensus, donor PSD discourse does not, therefore, rep
resent private sector growth as the sealed domain of entrepreneurs seekin
to accumulate personal profit for themselves and their shareholder
Instead, the private sector is wholly envisaged as a source of social pro
perity and as a tool for improving public welfare. This essential narrati
concerning the social role of the private sector is clearly expresse
throughout the PSD communications of the wider donor communit
DflD (2008: foreword), for example, in its Private Sector Development
Strategy, has stated that 'it is the private sector that creates wealth an
helps individuals and nations lift themselves out ofpoverty ... if we want to
achieve the MDGs [UN Millennium Development Goals] and make
difference to the lives of the poorest we need to work with businesses — sm
and large - to create jobs, to drive growth, and raise the income of th
poorest' (emphasis added). PSD language, in this fashion, incorporat
'trickle-down' narratives regarding the filtration of business profits t
employees, their dependents, and to local communities. The Chie
MARK LANGAN
92
Executive of SABMiller, one of many corporate partners

initiative Business Action for Africa, has provided an even
synopsis of the trickle-down rationale of PSD endeavo
bution to the Business Action for Africa network (BA
emphasised:
There is now a broad consensus across the development community that business
has an essential role in generating growth and reducing poverty in developing countries,
through the jobs and wealth we create, the opportunities we provide for suppliers, the
investment capital we contribute, the taxes we pay, the infrastructure improve
ments we make and the workers we train and develop [emphasis added].
Importantly, these legitimising discursive constructions are not limited

to donor institutions alone. Keen to align domestic policy communications
with the prevailing policy ethos of major global governance institutions,
the Kenyan government, for example, in its own Private Sector
Development Strategy has closely mirrored donor PSD discourse and has
echoed trickle-down understandings of the filtration of business wealth to
the broader community :6
The private sector is the epitome of development. Responding to the profit motive,
entrepreneurs invest in facilities and ideas and open up opportunities for people
to employ their talent and improve their general well-being. Firms also provide
goods and services ... [and] are the main sources of tax revenue ... the business
climate becomes a crucial building block for economic growth, development, and
overall prosperity (RoK 2006: 2, emphasis added).
Again, in this instance of PSD discourse, 'private sector development' is

publicly constructed as a 'common sense' endeavour that recognises the
role of the business sector in poverty alleviation, and enables en
trepreneurs to operate effectively for social gain in the free market.
Most significandy, donor PSD discourse explicitly constructs egalitarian
images of developing countries' participation in the ' globalised' economy.
PSD contributions are publicly represented as a means to ' close the global
competitiveness gap' and to allow ' globalisation' and trade liberalisation
to create 'more winners' (cited in BAA 2008: 7, 27). Specifically, trade
liberalisation agendas are presented as sitting in conformity with devel
opment ambitions since donor PSD assistance will ostensibly enable low
income states to take advantage of market-opening and to generate the
profits on which poverty alleviation can be realised. Stiglitz (Stiglitz &
Charlton 2006: 6), a prominent advocate of'post-Washington' Consensus
policies, has notably argued that donor assistance to the redress of supply
side constraints in developing countries will promote fairer, more humane
outcomes in global trade negotiations. In order to tackle this supply
side problem — and to achieve pro-poor trade liberalisation — he has
recommended that the 'primary instruments to achieve [equitable trad

liberalisation] ... should focus on private sector development by facilitatin
the improvement of the business environment for exporters' (emphasi
added). PSD assistance, in this context, will facilitate more equitable trad
regimes that will work towards fulfilment of the UN Millennium
Development Goals (MDGs).
Following Stiglitz, amongst other proponents of pro-poor trade liber
alisation, PSD frameworks have, in some circles, been presented as
veritable panacea to the travails of developing countries' participation i
global trade systems. PSD initiatives attached to Aid for Trade package
have 'increasingly [been] ... seen as the missing link that will help t
make trade a true engine of growth for poorer countries' (Sunassee Lam
2008: 273). In particular, PSD efforts are seen by donors as tangible proo
that the lessons of past structural adjustment programmes (and the
relative failure to generate pro-poor outcomes) have been learned, and
that 'new' avenues are being pursued to ensure that markets function in
socially progressive manner.7 However, if we consider more closely th
strategic placement of PSD concessions in the case of the EU (one of th
principal discursive proponents of contemporary PSD frameworks) in it
bilateral trade and development 'partnership' with the ACP countries,
becomes clear that PSD instruments do not necessarily promote pro-poor
outcomes. Instead, financially anaemic PSD instruments often serve as
normative concessions through which asymmetric trade ties are in
oculated from critical contestation and genuine reform.
PSD DISCOURSE AND THE ' MORALISATION OF LIBERALISATION' IN
EU-AFRICA TRADE RELATIONS
The EU is one of the chief donor advocates of priva

notably in its trade and development co-operation w
EU officials, in congruence with donor narratives o
have repeatedly spoken of the need for PSD assistan
to participate fairly in the ' globalised' economy and
market-opening for the relief of 'the poor' (Lan
European Commission (1998: 1) in its publication A E
Private Sector Development in ACP Countries, for exam
The European Community considers the private sect

development, and thus as a major partner in its developm
proposed [PSD] strategy is intended to make a powerful c
elimination, and to the beneficial integration of ACP countries i
is rapidly becoming more globalised [emphasis added].
94 MARK LANGAN
EU donor assistance to the busines

means of ensuring ACP countries'
economy. 'Integration', in this sens
entail market-opening in ACP state
economic liberalisation. In this con
cond-generation' complement to e
reforms in ACP countries:
Much progress has been achieved in liberalising markets, in removing regulatory

obstacles facing private investors and adapting taxation systems in order to
improve investment incentives. However, progress has been slower in identifying
and achieving institutional changes helpful to private enterprises ... such so
called 'second generation' reforms ... involve a substantial element of 'capacity
building' ... ACP countries will predominantly be market economies ... their devel
opment prospects depend on making full use of opportunities for export
growth ... and improved competitiveness of companies (EC 1998: 8, emphasis
added).
The European Council meanwhile has similarly expressed that EU

donor assistance to business competitiveness in the ACP countries will
enable development-friendly processes of market 'integration'. In fact
market-opening is viewed as an essential component of human develop
ment strategies:
The increasing globalisation and the ensuing need for developing countries to
improve their competitiveness in order to integrate successfully in the world econ
omy strengthen the need for private sector development. Support for the devel
opment of the private sector is therefore an important area of the development
co-operation policy of the European Union, playing an overall role in poverty
eradication through contributing to economic growth and by creating employment
(cited in Langan 2009: 425, emphasis added).
The Council's policy communication thereby reiterates one of the primary

public messages within donor PSD discourse, namely that trade liberalis
ation or, in the words of the Council, 'integration' into 'globalised' mar
kets will take place in an equitable manner.
Interestingly the European Commission (2003: 2) has articulated these
trickle-down narratives of equitable trade liberalisation within an explicit
recognition of the broader' post-Washington' Consensus surrounding PSD
interventions, legitimising its own PSD policy agenda as falling within the
wider constellation of donor PSD frameworks. Again PSD programmes
are presented as 'common sense', as an 'objective' truth beyond doubt
and contestation:
The ... evidence ... is now abundant... the United Nations... the Bretton
Woods Financial Institutions, as well as the OECD-Development Assistance
Committee and NGOs are all now agreed on the importance of business a
private sector support [in development processes]. This wide consensus reflects t
perception that economic growth creates the resources to combat poverty an
that business development and a dynamic private sector are essential for econ
omic growth providing as they do, the main source of employment in developin
countries [emphasis added].
Despite these legitimising narratives, however, the EU's recent advo

cacy of PSD agendas has emerged in the midst of highly controversial
changes to the terms of its trade and development co-operation with AC
countries. Indeed, Europe's discursive embrace of PSD initiatives has co
incided with the Commission's attempts to reform the ACP—EU r
lationship (a long-standing bilateral association with former colonie
dating back to 1957) from economic ties based on trade preferences an
mixed-market interventions to a partnership based on trade reciprocit
and mutual market liberalisation (Langan 2009:422).8 This EU movemen
from non-reciprocity to WTO-compliant forms of free trade in its re
tions with ACP states was notably reflected in the framework of the co
temporary ACP—EU Cotonou Agreement (2000—20). It is against th
transition from trade non-reciprocity to Cotonou-era trade reciprocity
therefore, that Europe's recent emphasis on PSD interventions h
emerged as a means of reassuring critics of economic liberalisation age
das that the reform of the ACP-EU partnership will be an equitab
process (ibid.: 422).9 Keen to maintain historically embedded egalitarian
images of the ACP-EU bilateral relationship and to reassert Europe
commitment to an allegedly benevolent role on the global stage, PS
initiatives have assumed a central position as norm-laden concession
through which EU institutions have sought to bring about a discursive
' marriage' of bilateral trade liberalisation agendas to legitimising pro-po
'development' objectives (ibid.: 435).
Specifically, Europe's strategic embrace of PSD frameworks and asso
ciated PSD discourse has allowed EU policy makers to publicly argue th
trade reciprocity will work in the favour of ACP countries, since dono
revenues will be directed to ensuring that ACP business sectors will be ab
to compete effectively in the post-liberalisation phase. In this vein
Europe's embrace of PSD discourse has aligned with, and reinforced, th
Commission's broader narrative that processes of market liberalisation
in ACP countries are chiefly aimed at achieving pro-poor outcomes in
the former colonies: 'The European Union's primary concern must b
the integration of the poor into the economic and social life and the integratio
of the ACP countries into the world economy. This is why our develop
ment framework should be extensible to fresh areas of cooperation an
96 MARK LANGAN
other agents of development in civil society, especially the pr

1996: 55; emphasis added). PSD initiatives provide a
cession through which these legitimising public represe
ratives of ACP countries' equitable 'integration' can
maintained and, ostensibly, materially realised.
Most notably, PSD initiatives have served as normative
the European Commission's vigorous pursuit of Econo
Agreements (EPAs) with sub-regions of the ACP gr
vehicles for the transformation of ACP EU economic ties towards full
trade reciprocity - have been rationalised on the basis of allowing ACP
developing countries to prepare themselves for gradual integration into
the multilateral trade system. It is within EPA negotiations that Europe's
PSD initiatives have taken on particular symbolic significance as 'devel
opment ' concessions (Langan 2009: 425). PSD mechanisms have enabled
figures such as Pascal Lamy, former EU Commissioner for Trade, now
Director-General of the WTO, to claim that donors have realised the need
to supplement market-opening in low-income states with assistance to
business capacity-building. PSD mechanisms and broader Aid for Trade
measures are seen as key to enhancing productivity in developing coun
tries and allowing them to participate, in a fairer fashion, in the inter
national economy: 'Trade opening is necessary, but it is not sufficient in
itself. It also implies assistance to help the least-developed countries to build
up their stocks and therefore adequate productive and logistical capacity, to
increase their capacity to negotiate and to implement the commitments
undertaken in the international trading system' (cited in WTO 2006;
emphasis added). For Lamy, trade liberalisation - in conjunction with
appropriate donor assistance to the capacity of developing countries - is
thus publicly translated into a global public good aimed at the well-being
of'humanity': 'trade is only a tool to elevate the human condition; the
ultimate impact of our rules on human beings should always be at the
centre of our consideration. We should work first for human beings and
for the well-being of our humanity' (ibid.).10
Crucially, however, this ' moralisation of liberalisation' - facilitated by
PSD normative concessions and PSD discourse - does not reflect the
material realities of Europe's trade agenda with ACP countries (Langan
2009: 421). EPAs, in particular, do not appear to establish conditions in
which indigenous business sectors in ACP countries can thrive - quite the
contrary.11 Notably, ACP civil society and European non-governmental
organisations (NGOs) have issued strong moral condemnations of the
EU's attempts to impose 'premature' liberalisation on less developed
partners through EPAs. According to these critics of reciprocal trade, the
EU is pursuing its commercial interest in ACP countries' potentially

lucrative industries, including 'telecommunications, construction, and
financial services', in a manner that will effectively blunt the social gains of
economic growth to host ACP nations (Faber & Orbie, cited in Langan
2009: 417).12 Business proceeds in these emerging sectors, once subject to
mergers and takeovers, will be repatriated to European commercial cen
tres, and through them to foreign shareholders, rather than retained and
reinvested domestically to the advantage of poorer citizens within a sus
tainable cycle of national economic and social development (cf. Chang
2007: 14-18).
In this context, EPAs are not seen as pro-poor development ventures
but are widely viewed as vehicles through which the EU is pursuing its
economic and political interests through the entrenchment of asymmetric
trade ties with former colonies. As such, the imposition of EPAs has been
understood to 'kick away the ladder of development' and, in the case of
emerging sectors (above), to deprive ACP decision-makers of necessary
policy space to create home-grown ACP industries that provide compre
hensive backward linkages into the wider economy (Chang 2003: 140;
Nunn & Price 2004: 210). Moreover, in traditional agricultural sectors,
the prospect of European import flooding under EPAs is understood to
threaten fledgling ACP production in economic areas that currendy con
tribute significant revenues to national development. The potential of un
restricted entry of EU goods such as textiles, beef, poultry, tomatoes, cereal
and dairy products into ACP markets, it is claimed, will undermine dom
estic enterprises in ACP countries leading to business closures, economic
stagnation, and the loss of livelihoods for 'the poor' {The Courier 2008).
These criticisms of EPA trade liberalisation, founded on the same moral
'development' terrain on which the EU has explicitly justified its trade
relationship with the ACP countries, have posed a serious concern for the
EU. They have not only challenged the asymmetric structure of ACP—EU
trade relations but have also publicly undermined the EU's self-image as a
benevolent 'normative power' in its relationship with former colonies
(Manners 2002: 252; Storey 2006: 332). The African Social Forum in 2004
(cited in Bilaterals.org 2005), for example, expressed its grave moral con
cern that Europe's EPA agenda with ACP countries would jeopardise the
long-term well-being of citizens in developing states and challenged the
'development' auspices of the EU in its 'partnership' with former colon
ies: 'Under the guise of a "development partnership", the EU is aggres
sively imposing its trade and investment liberalisation agenda on African
countries. The EPAs - if implemented - will lead to loss of livelihoods,
food insecurity, increased unemployment and social inequality in Africa.'
98 MARK LANGAN
Significantly, many ACP governments themselves app

sceptical as to the pro-poor nature of EPAs. Despite the
December 2007 deadline for the signing of reciprocal t
the majority of ACP countries have not signed full EPA
have reluctantly acquiesced to 'interim' EPAs and have
terms with the EU regarding market-opening in servic
other lucrative emerging sectors. Only one full EPA
(as of 201o) between the EU and CARICOM (the asso
Caribbean Community). This EPA itself is being retrospec
many Caribbean officials. President Jagdeo of Guyana,
been particularly vocal in his unease with the CA
{The Jamaica Gleaner 2010). Meanwhile interim agreeme
deal short of full EPAs, have been initialled or signed w
ACP counties including Ghana, Kenya, Uganda, Tan
Mauritius, Zambia, Madagascar and the Seychelles (EC 2
Furthermore, these critical narratives sit in uncomfort
to the legitimating images of ACP-EU relations as co
Europe's PSD discourse, jarring with strategic narrat
market integration that have sought to inoculate EPAs
testation. It is necessary, therefore, to explore in more
crepancies between Europe's normative images of pro-po
development' and critics' visions of social distress am
market-opening in ACP countries. In particular, it is n
Europe's PSD normative concessions in relation to the m
of operating EU PSD instruments. This underscores serio
Europe's PSD normative initiatives appear to reupho
imisations of ACP-EU relations, and to rationalise
questionable EPA trade agendas, rather than to tangibly
human development objectives.
EUROPE'S PSD INTERVENTIONS IN ACP STATES IREALISING
PRO-POOR DEVELOPMENT?
Given the strategic placement of PSD normative

legitimising EPA trade reciprocity in Europe's b
states, it is important to consider whether EU i
fulfilling the legitimising 'development' objectiv
discourse. Table 2 illustrates the main institutions with a mandate to
pursue PSD initiatives as part of the EU's wider commitment to Aid for
Trade. As it indicates, EU financial assistance to ACP private sector in
itiatives was marginal in proportion to the extensive donor PSD discourse
Table 2
All-ACP European Commission funded programmes in timefram

of the 9th EDF
€110 M
PROInvest administered by the Centre for Development of Enterprise (CDE)
Centre for Development of Enterprise €90 M
Private Sector Enabling Environment Facility €20 M
Micro finance Framework contract €15 M
EPA Programme Management Unit (PMU) €20 M
World Trade Organisation (WTO) PMU €10 M
Trade.Com €50 M
Centre for Technical Assistance to Agriculture (CTA) €101.17 M
All-ACP Commodity Support Programme €45 M
Pesticides Initiative Programme (PIP) administered by €28.8 M
Liaison Committee of Europe-Africa- Caribbean and Pacific (COLEACP)
Total €489.97 M
Source: Sunassee Lam (2008), amended and extended, cited in Langan 2009: 423.
Note: The finances of the European Investment Bank's (EIB) Investment Facility (IF) are not included
since they are not strictly directed to capacity-building in indigenous ACP business sectors as per the
pro-poor rationale of PSD. Instead EIB IF monies provide de facto subsidies for European commercial
ventures in ACP countries. These investments do not assist ACP domestic entrepreneurs to develop
business capacity but instead often contribute to the crowding-out of domestic ACP businesses under
EU monopolisation of lucrative emerging sectors (Langan 2009: 423). In many cases the projects are
based in the mining sector and have been heavily criticised for their regressive impact upon both
workers and local communities in ACP states (Counter-Balance 2008). Bracking (2009) provides a
convincing and detailed analysis of the 'predatory' interventions of development finance institutions,
such as the EIB, in low-income countries. The FLEX scheme is also not included for lack of
reliable data.
in the timeframe of the Ninth European Development Fund (EDF) from

2000 to 2007. The total of €489.97 million amounts to just over €1 million
per year per ACP country (Langan 2009: 429).
In the context of the ACP states' adjustment costs for EPA liberalis
ation, moreover, these PSD concessions were remarkably frugal. Milner
(2006: 113), for instance, calculates that the adjustment costs of EPA
transitions will amount to approximately €g billion across the ACP
countries including €1.454 billion (net) for production and employment
adjustment and €2.089 billion (net) for trade facilitation and export
diversification (Langan 2009: 429).
Accordingly, Europe's PSD contributions under Aid for Trade packa
ges will only represent approximately 5-3 % of the total adjustment costs to
be borne by low-income ACP countries under EPA reforms. This modest
percentage stands in stark contrast to egalitarian images of European lar
gesse maintained within PSD discourse, and additionally points to the
sheer magnitude of the costs incurred by low-income ACP states under
EU bilateral trade liberalisation agendas [ibid.: 429).
IOO MARK LANGAN
Furthermore, when the capacity of individual ACP—EU

institutions is considered, it is soon evident that Europe's fina
seriously inhibits the ability of PSD instruments to fulfil
velopment' objectives. The CDE, for example, stands as on
hallmark PSD normative concessions to ACP countries under the
Cotonou Agreement.13 The CDE derives most of its resources from the
EDF and has been established as a funding body for ACP private sector
enterprise and investment. Its mandate is to facilitate ACP-EU joint
business partnerships by increasing awareness of business opportunities
that could be pursued on a joint ACP-EU private sector basis. The in
stitution may provide partial funding for such initiatives, and may also
provide support to ACP firms to market themselves more effectively
within European markets. Additionally, it can support new commercial
opportunities in ACP countries by offering technical support or finan
cial contributions towards business capacity-building (Commonwealth
Secretariat 2004: 118). Significantly, the CDE is also active in promoting
Europe's PSD discourse, emphasising the EU's commitment to socially
equitable business growth in the context of wider ACP-EU relations. The
CDE (2004: 4) explains that it is ' an institution of the ACP Group of States
and the European Union in the framework of the Cotonou Agreement. It
forms part of the general system of support the European Commission
created for promoting the private sector and thus helping to combat poverty'
(emphasis added). The Centre additionally emphasises that it is an ' excellent
tool for promoting development and eradicating poverty' (CDE 2008a; emphasis
added).
However, as Table 2 illustrates, the CDE budget is exceptionally
modest for an institution that seeks to build private sector capacity across
seventy-nine low-income ACP countries. Within the timeframe of the
Ninth EDF (2000-7), this budget only came to approximately €12-8 mil
lion per annum. While te Velde (2006: 133) has previously calculated that
CDE contributions represent approximately €250,000 per ACP state per
annum, the above budget estimate indicates this could be as low as
€163,000 per ACP state per annum. Given this restricted budget, the
CDE has had to focus on a very select few priority business sectors that
nominally offer greatest potential for economic and social development in
ACP countries (CDE 2008b: 8). Although firms outside the CDE's selec
ted sectors can receive funding at the discretion of the Centre, the vast
majority of CDE PSD assistance remains within the selected areas, ring
fencing resources to the chosen industries. These prioritised trade areas
'currently include the timber sector, cotton and textiles, livestock, fish
eries, the mineral sector, environmental treatment facilities, horticulture,
PRIVATE SECTOR DEVELOPMENT IN EU-AFRICA RELATIONS IOI
tourism and regional trade facilities' (Common

2004: 118). Focussing on these trade sectors,
meanwhile claims that in the period 2000-2010
ACP businesses in over 6,500 separate intervention
applications, however, represent CDE contributions
although projects up to €50,000 can be conside
Secretariat 2004: 119). Additionally, the budget for t
is itself very limited. In 2008, for instance, the CD
€4,079,080 in total commitments to its sector prog
modest sum in contrast to the discursive significan
in the legitimisation of EPA liberalisation.
Meanwhile, if the activities of the CDE are consid
specific prioritised sector programme, it is possible
itations of the institution and those of Europe's PS
generally. Notably, the CDE's assistance to ACP fir
cotton and textile programme indicates considerab
tation of the 'development' orientation of EU PSD
to the CDE (2008b: 15), its assistance to textiles fir
facilitates market linkages and marketing know-h
basis. In the case of Kenya, for example, the CD
worked to promote 'export market development' in
ation of buyer visits to Kenyan clothing companie
mation on the applicable EU trade regime and tech
apparent vigour of the CDE in its interventions in A
however, again undermined by the financial capacity
the CDE (2008b: 14) notes, 'over the 3-year period fr
CDE contributed Euro rg m towards the implemen
programme with additional third party financing
excluding the participating companies' contribution
nificant'. This €1-9 million figure is extremely m
torical significance of textiles sectors in establishing
for industrialisation with backward linkages into ag
countries (Traub-Merz 2006: 10). It is also, once mor
in contrast to the rhetorical heights of PSD langua
Europe's 'partnership' with seventy-nine ACP deve
More worryingly, the direction of the sparse PSD
textiles and cotton programmes under the CDE indi
resources often serve more as de facto subsidies for
interests than as genuine 'development' concessio
The CDE 2005 Annual Report (2005a: 45-7), for
€515,000 was made available by the Centre for 'tex
102 MARK LANGAN
eastern Africa. In that year, however, the CDE, in this

text, appears to have contributed as much as €333,000 t
Madagascar alone.14 This venture, Text'ile Mada, is a tex
cluster comprising approximately twenty-four companies
total of 9,000 people (CDE 2008b: 14). Its firms serve
Disney andJC Penny and other large multinationals, a
cases registered under Madagascan export processing
lation (Le Site de Text'ile Mada 2010). Significantly, there
commercial investment in the cluster, with the Fren
agency (AFD) providing €800,000 over three years in con
CDE resources, with a combined project value of €1,800,
(CDE 2005a: 45-7). This CDE/AFD funding has had clear
European investors seeking to invest in profitable textil
ACP former colonies. Notably, the Text'ile Mada cluster
ated approximately €50 million in turnover, delivering high
for its European investors (EUROPEAID 2006: 9). CDE
case worked as a de facto subsidy for European commerc
However, the daily realities of business activities in ind
such as Text'ile Mada do not correspond to donors' discu
tions of equitable and pro-poor economic growth in
tries — quite the contrary. PSD narratives, in these c
represent strategic illusions which publicly divorce EU int
the uncomfortable social implications of competitive busin
poorer citizens in ACP countries. In the Malagasy case, f
CDE (2005b: 2) literature itself emphasises that its donor
based on ' the fact that its [Madasgascar's] production cos
lowest in the world' and that the country, on this basis
potential for success in the global textiles market. Y
comparative advantage in low-cost production derive
waged nature of employment in its textiles industry, and
ness and productivity of a largely low-skilled female work
receive the lion's share of business proceeds enjoyed by
mercial investors. Rather than providing ' an equitable di
fruits of [private sector] growth' envisaged within t
([2000] 2006: 6), economic expansion in Madagascar's te
has not been translated into widespread poverty allev
(2006: 1) in his analysis of the welfare creation effects of
in Madagascan textiles makes clear, 'the impact of [an] ..
[in Madagascan textiles] has been very large in terms
and wages; albeit less so in terms of poverty reduct
large majority of the poor are unable to enjoy the n
PRIVATE SECTOR DEVELOPMENT IN EU-AFRICA RELATIONS IO3
opportunities ... most of the poor reside in rural areas, where the em
ployment effect is very small'. This lack of trickle-down to Madagascan
citizens owes much to the EPZ model of textiles operations that bestows
low tax rates upon foreign investors, limiting the contribution of busines
prosperity to the wider citizenry through the generation of government
revenue conducive to the funding of national welfare services.
Meanwhile, the 'development' contribution of low-waged, export
focused textiles operations is highly questionable even in the context of
the direct 'beneficiaries' of private sector expansion, that is, the textiles
employees. As mentioned, average wages in Madagascan textiles firms are
very low and currently remain around US$2 per day, with recent wage
increases mainly benefiting male management rather than the majority
female labour force. These low wages, moreover, are likely to persist given
the 'large reserve unskilled labour force and continued high turnover in
unskilled textile jobs' in Madagascar (Nicita 2006: 22). Further under
mining the 'development' potential of Madagascar's export-driven textiles
plants, many female labourers not only find that wages are not sufficient to
meet their own human needs, let alone those of their family dependents, in
stark contrast to the pro-poor image of wealth filtration inherent in PSD
discourse, but also experience regressive workplace conditions. On
worker in a Belgian knitwear and embroidery company located in
Madagascar, for example, complained:
I make jumpers using a machine, but I don't have a protective mask. I can
normally make five jumpers, but when my boss tells me to make nine, I can't do it
and I sometimes have to work until 10pm. I earn MGF 252,000 [about 22 Euros]
per month. It's very little, as my rent costs MGF 150,000. I can no longer afford
rice or meat, and I have to walk to the factory because I can't afford the bus ticket
(ICFTU 2004: 37).
The 'development' potential of the CDE's funding to Madagascan

textiles under PSD remits is also undermined by the insecure nature of
textiles investments in that country, owing to the fact that the export
model operated by most foreign investors largely depends on temporary
African Growth and Opportunity Act (AGOA) preferences into the US
market. These preferences were withdrawn from Madagascar by the US
authorities in 2009 in response to a domestic coup d'etat (AGOA.info 2010)
Even without the current sanctions, moreover, the Madagascan textiles
sector would face serious challenges to its long-term sustainability.
Significandy, AGOA preferences are based upon the US government'
policy rationale that textiles manufacturers in sub-Saharan Africa will
make progress towards domestic sourcing of cotton in beneficiary African
states. Most textiles investors in countries such as Madagascar, however
MARK LANGAN
have not based their export model on domestic sourcing an

host nation on the expiration of the AGOA third-countr
(which currently allows the importation of raw materials
Southeast Asia).15
Ironically, and again in uncomfortable juxtaposition to
poor PSD discourse, EU PSD assistance to ACP countries,
towards profitable European business investments in low
operations, is simultaneously denied to large scale cotton
could establish a viable cotton-textiles value chain conducive to the broad
based poverty reduction nominally enshrined in the Cotonou Agreement.
In the case of Kenya, for instance, the European Commission rejected a
proposal from the Kenyan government to provide PSD assistance to the
Kenyan cotton sector in the creation of backward linkages between
Kenyan textile manufacturing and domestic agriculture. Following a
report conducted on behalf of the European Commission by the UK
consultancy firm HTSPE (2003), the EU delegation in Kenya opted not
to assist cotton production. The HTSPE consultants' report (2003: iv)
claimed that
the international competitiveness of the Kenyan cotton and textile sector is

low ... only lint production for export and [EPZ] garment manufacture under
the AGOA Act are promising in future ... there is little promise of long-term high
volume international sales of Kenyan-made fibres and cloth to the main con
suming countries as well as of garment sales outside the preference regulations of
the AGOA Act.
In one short passage the viability of Kenyan cotton production was

effectively dismissed, leading to the Commission's decision not to offer
PSD support to a sustainable cotton-textiles value chain in Kenya. Viewing
the immediate profitability of EPZ manufacturing as a more promising
venture for European investment, the alleged lack of a comparative ad
vantage in Kenyan cotton production was cited as a barrier to EU PSD
investment. This is despite the clear advantages that could be obtained
for thousands of low-income rural workers in cotton-producing areas in
Kenya from investment in rural-urban backward linkages; despite the on
going insecurity of EPZ investments given their aforementioned reliance
on transitory AGOA preferences; and despite wide-ranging concerns
that EPZ activities in Kenya have resulted in ill-treatment of workers
and a definitive lack of'an equitable distribution of the fruits of growth'.
The Kenyan Human Rights Commission, in a publication entitled
The Manufacture of Poverty, has firmly criticised what it describes as the
'poverty wages' of EPZ enterprises and their failure to deliver genuine
pro-poor development for Kenya's citizenry (cited in IPS 2005).
PRIVATE SECTOR DEVELOPMENT IN EU-AFRICA RELATIONS IO5
This focus on immediate business profitability, accepted by the

Commission, underscores Europe's apparent primary interest in lucrative
commercial investments in ACP former colonies, even if the private sector
activity involved does not represent a suitable avenue for genuine poverty
reduction. It is perhaps not surprising, therefore, that EU PSD conces
sions, as in the Madagascan case, have often served as de facto subsidies
for highly profitable European investments which either fail to deliver, or
else actively undermine, the social well-being of vulnerable citizens and
host communities in ACP countries. This in turn gives rise to serious
questions surrounding the 'development' credentials of Europe's PSD
agenda, as well as that of broader donor PSD strategies within the 'post
Washington' Consensus. While PSD discourse publicly constructs legit
imising images of equitable trade liberalisation conducive to the well-being
of vulnerable citizens in ACP countries, the material realities of PSD as
sistance are in fact highly questionable in terms of pro-poor outcomes.
PSD concessions, as in the context of ACP-EU relations, are often fi
nancially anaemic. Meanwhile, the limited available funds are pre
dominantly directed to business activities that align with donors' economic
interests, yet do not correlate with low-income states' long-term develop
ment needs.
Central to an understanding of 'private sector development' in con

temporary North—South relations, therefore, PSD discourse can be
understood to perform a 'double-veiling' over asymmetric trade regimes
and developmentally dubious business activities in the global South
(Langan 2009: 418). In the context of ACP-EU ties, PSD discourse not
only provides ' normative cover' for reciprocal trade deals through nom
inal pledges to developing states' supply-side constraints, but additionally
works to veil the uncomfortable realities of private sector practices (often
those undertaken by foreign investors in pursuit of short-term profits) in
developing countries whose current export-oriented industries revolve
around the 'comparative advantage' of low-cost labour. This double
veiling is, however, central to the development branding of market
opening in low-income states and works to rationalise reciprocal trade
deals (such as EPAs) as opportunities for pro-poor gain within the free
market. In this process, PSD normative concessions, through PSD dis
course, construct strategic illusions that downplay existing economic and
political inequalities between Northern and Southern partners. Narratives
of pro-poor trade liberalisation, an ' equitable distribution of the fruits of
growth', and equitable trickle-down establish imaginary worlds that
legitimise the status quo yet disguise the regressive consequences of
entrenched North-South power relations for vulnerable citizens in
io6 MARK LANGAN
developing countries. Accordingly, PSD concessions can

(re)embed poverty through the diffusion of a legitimisi
immunises developmentally dubious trade systems from
Attached to developmentally regressive trade deals, P
directed towards consolidating donor interests through
to commercial investments rather than tangibly assisting
of pro-poor business growth.
Critical attention to the political potency of PSD di
negotiations, combined with civil society and NGO p
garding the impact of premature market liberalisation o
however, help to un-blur donors' strategic marriage of
ethics as facilitated by PSD normative concessions (L
Attention to the usages of PSD discourse can illustrate
moral norms of development and poverty reduction
to rationalise inequitable forms of economic relatio
Washington' Consensus. When this is then considered in
sessment of donor PSD instruments, as in the context of
partnership with ACP states, it can also underscore discr
moral language and material outcomes in order to highlight
private sector models based on low wages and (premature
# # #
PSD concessions are a central component of recent

at making markets work for 'the poor' and at align
processes to equitable development outcomes. N
serves a crucial role in providing legitimising nar
countries' ' smooth and gradual' integration into g
fair trickle-down of business sector wealth to vulnerable workers and host
communities, and of donor recognition of possible market failures in the
era of the 'post-Washington' Consensus. Despite these egalitarian images
of liberalised trade systems working in the interest of the poorest within
developing countries, however, PSD discourse can be better understood to
construct strategic illusions that perform a 'double-veiling' of the in
equities of asymmetric North-South relations. Rather than deliver
meaningful assistance to private sector activities that could potentially
generate the social gains nominally enshrined in donor agendas, PSD
concessions are, in many cases, financially anaemic, and do more to
publicly rationalise developmentally questionable reciprocal trade deals
than to materially provide the resources necessary for developing coun
tries' equitable participation in globalised markets.
PRIVATE SECTOR DEVELOPMENT IN EU-AFRICA RELATIONS I07
As the above examination of PSD normative concessions in the context

of Europe's bilateral trade and development co-operation with ACP
countries demonstrates, PSD instruments provide a policy platform upon
which donors' trade liberalisation agendas have been partially inoculated
from critical contestation and public dispute. In the case of EPAs, notably,
EU PSD assistance has rationalised the reform of ACP EU economic ties
and portrayed sanitised and stylised accounts of how reciprocal trade
systems ought to, and allegedly will, work to improve the social well-being
of vulnerable people in the ACP countries. Nevertheless, Europe's ex
tremely modest PSD allocations, standing at just over €1 million per ACP
state per annum, fall far short of the rhetorical heights of' private sector
development' and its strategic significance in the rationalisation of un
equal trade ties.
Moreover, as in the case of the ACP—EU Centre for the Development
of Enterprise, the limited available EU PSD funds are in many situations
directed to European donors' commercial investments in developing
countries. PSD concessions, in this context, often serve as de facto sub
sidies for European business interests in low-income states, providing re
sources to entrepreneurial activities even where these do not promote, or
indeed where they actively undermine, pro-poor development objectives
in ACP states. As the article's focus on CDE contributions to cotton and
textiles in ACP countries illustrates, PSD revenues are often channelled
to low-waged industries that generate significant profit for European
investors but result in dubious outcomes for the well-being of a pre
dominantly feminised workforce in developing states. Meanwhile, invest
ments that might possibly generate widespread social gains, such as the
funding of a sustainable cotton-textiles value chain, are often overridden
on the grounds of immediate profitability without full regard for the long
term development gains that could be derived from donor assistance.
PSD concessions cannot therefore be understood, in this ACP-EU
context, as technical instruments aimed solely at promoting human de
velopment agendas through appropriate donor assistance to business
competitiveness in low-income countries. Instead, critical attention to the
discrepancies between donor discourse and the tangible realities of donor
programmes points to the strategic utilisation of PSD mechanisms in
perpetuating regressive forms of North—South relations. In the case of
ACP-EU relations, PSD initiatives work more to entrench existing power
asymmetries between European and ACP 'partners' through the articu
lation of public narratives that veil dominance and help to sanitise unequal
trade systems as 'pro-poor'. This is a considerable paradox given that
these reciprocal trade relations work to (re)embed poverty by denying
io8 MARK LANGAN
ACP governments the necessary policy space to pursue su

of national economic development.
Through this 'double-veiling' performed by PSD di
while, the consequences of premature market-opening in
are downplayed amidst Europe's strategic visions of dono
establishing a more level playing field for former colonie
their fair integration into globalised markets. Moreover
implications of export-driven commercial models and EU
investment in terms of labour conditions and of social we
states are veiled within pro-poor representations of an '
bution of the fruits of [private sector] growth' (ACP
2006: 6). Unfortunately, Europe's PSD instruments can b
stood as (re)embedding poverty through strategic discour
genuine mechanisms for pro-poor private sector develop
chanisms, under-resourced and tied to EPAs, do not wor
correct existing inequalities, but instead reinforce them t
alisation of premature liberalisation and the rationalisati
forms of North-South ties. Critical attention must therefo
strategic utilisation of donor PSD frameworks in th
Washington' Consensus.
NOTES
1. A normative concession is a 'gift' or form of material aid that is inf

case of PSD in ACP-EU relations, these embedded norms include solidar
amongst partners, and an egalitarian model of North-South relations.
to project its embedded norms and, in effect, to embody them. As su
within economic relations (such as that of ACP-EU co-operation), a nor
project legitimising norms and to rationalise the status quo.
2. Contemporary PSD initiatives are often presented in donor commu
broader 'Aid for Trade' agenda. Aid for Trade is understood to com
capacity including assistance to trade ministries in low-income states. P
for Trade umbrella, in some cases are seen to focus specifically on supp
sector. As Schulpen and Gibbon's (2002: 3) table indicates, however, thi
wider Aid for Trade remits is often blurred, with PSD sometimes def
trade initiatives. Breswster & Njinkeu (2008: 369) have attempted to
programmes within Aid for Trade agendas, yet there appears to be on
formal division of labour between the various policy strands encompa
many cases this lack of clarity is useful within donor communications
multiple programmes and initiatives as part of public legitimisations of
3. It is important to note, however, that private sector development f
'new' phenomenon. They can be traced to structural adjustment ref
donors' increasing focus on privatisation and state divestment in indeb
for example, Mailafia (1997: 23) on the rise of private sector framewo
the 1980s.
4. Official proponents of PSD policies might remark that donor assistance to private sector growth
in liberalised markets in developing states is indeed a common sense response to poverty, and a desirable
goal at that. While PSD support as part of vigorous liberalisation agendas is of course preferable
to liberalisation without donor assistance, there are, however, economic alternatives to free trade
PRIVATE SECTOR DEVELOPMENT IN EU-AFRICA RELATIONS
regimes, which contemporary donor PSD discourse strategically

instance, there is an emerging literature on possible democratic deve
developmental regional trade communities) - see for example Chang
ANSA 2007; Edigheji 2005; Mkandawire 2001; Deacon 2001. This li
on the relevance of stronger government intervention in the econo
markets for creating sustainable, indigenous private sectors that possess m
into the domestic economy. Such developmental modes of business activ
opportunities for genuine poverty alleviation than is currently possib
markets.
5. Contemporary donor PSD discourse, framed within the context o
strategically works to close down developmental state models of busines
income states.
6. Developing countries' adherence to donor PSD discourse arguably represents a form of'extra
version', that is, a strategy of recourse to donor norms within attempts to lever external resources into
low-income states (Bayart 2000: 227). As Bayart (2000: 266) suggests in his reference to Franz Fanon,
' extraversion' may sometimes derive from a process of internalisation of external norms rather than
conscious strategising or deliberation. Indeed, in many cases PSD frameworks have come to be seen as
' common sense' solutions to poverty, closing down critical avenues for contestation of donor discourse
within developing states' government apparatus - even when ostensible development gains are not
forthcoming.
7. Again, PSD agendas are not a novel feature of North-South relations, though they have been
repackaged as such within the nominal donor shift from the 'Washington' to the 'post-Washington'
Consensus.
8. See Brown (2002: 31-72) for an extensive discussion of the origins and historical evolution of the
ACP-EU partnership including analysis of the shift from non-reciprocal to reciprocal trade regimes.
9. The 'audience' for PSD legitimisation of market-opening includes critics not only within the
institutions of the EU but also within civil society organisations across the North and South, as well as
ACP official representatives. PSD discourse speaks to a variety of stakeholders and, in a sense, seeks to
silence dissent through ostensibly responding to concerns regarding premature market liberalisation in
developing countries.
10. James Scott (2007: 20) assesses the ways in which donors' ostensible support to Aid for
Trade in low-income states has worked to rationalise the WTO Doha Round as conducive to
poverty alleviation in the South. He draws attention to the likely limited financial capacity of
these instruments amidst the recycling of aid monies as well as their possible role as a ' tool of foreign
policy'.
11. For reasons of time, space and remit, this article does not provide an econometric analysis of
EPA trade asymmetries but focuses instead on a discourse analysis of the strategic/political legit
imisations of PSD concession. Its analysis of the 'veiling' functions of PSD normative concessions is,
nevertheless, informed by existing quantitative investigations of the developmentally regressive im
plications of ACP-EU trade ties, particularly EPAs. For quantitative detail on EPAs see Bilal &
Rampa 2006; Borrmann et al. 2006; Hinkle et al. 2003; Muhammad 2009; Stevens & Kennan 2005.
In addition, see Bertelsmann-Scott 2007; Gerard & Rampa 2007; Clarke 2006; Fontagne et al. 2008;
Goodison 2006; Karingi et al. 2005; Milner 2006; Morrissey et al. 2007; Ogodo 2005; Perez 2006;
Reuters 2005; Traidcraft 2004; Silva & Grynberg 2006.
12. Critics have argued that Europe's EPAs agenda represents a 'back door' through which ACP
developing countries' acquiescence to services liberalisation has been pursued in response to the
stalemate of multilateral trade negotiations in the WTO Doha 'Development' Round. See, for ex
ample, IPS 2009.
13. The CDE is the successor institution to the Centre for the Development of Industry (CDI),
which was established under the preceding Lome Conventions.
14. The estimated figure of €333,000 assumes that the CDE provided the remaining €1,000,000 of
the total three-year project budget of €1,800,000 in equal annual instalments in conjunction with the
€800,000 of co-financing provided by AFD. Unfortunately, the annual reports of CDE for 2005, 2006,
2007 and 2008 offer limited information regarding the detailed financial breakdown of its priority
sector programme budgets, particularly in relation to individual projects such as those supported in
Madagascar.
15. In Kenya, for example, the EPZ textiles sector witnessed an exodus of foreign investors in 2005
following the closure of the Multi-Fibre Agreement and amidst on-going uncertainty as to the exten
sion of the AGOA third-country fabric waiver. For more information see Afrika.no 2005.
IIO MARK LANGAN
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Private sector development as poverty and strategic discourse: PSD in the political

economy of EU—Africa trade relations

Private sector development as

Department of Politics, University of Stirling, Stirling FKg 4LA,

Private sector development (PSD) has emerged as a cor

* Many thanks to Rorden Wilkinson, Sarah Bracking, James

Private sector development (PSD) has emerge

ment of a legitimising 'pro-poor' discourse with the failure of Europe's

The article, in this analysis, raises important questions regarding the

concessions in the rationalisation of developmentally qu

PSD INSTRUMENTS: FROM TECHNICAL EVALUATION TO

PSD frameworks have been firmly advocated b

Levels and elements of private sector development

Macroeconomic policies Institutional

Physical infrastructure and

- Education and skill

- Fight against corruption

Source: Schulpen & Gibbon 2002: 3.

poorer entrepreneurs through attention to niche markets. It also includes

the literature includes ADE (2005), a detailed technical i

countries is publicly translated as a vehicle for pro-po

PSD AND THE 'POST-WASHINGTON' CONSENSUS: FREE TRADE

The strategic role of PSD concessions in the creation of a legiti

PSD initiatives are thereby presented as a logical and ' comm

discourse of PSD facilitates the development branding of donor-sponsore

Executive of SABMiller, one of many corporate partners

Importantly, these legitimising discursive constructions are not limited

Again, in this instance of PSD discourse, 'private sector development' is

recommended that the 'primary instruments to achieve [equitable trad

PSD DISCOURSE AND THE ' MORALISATION OF LIBERALISATION' IN

EU-AFRICA TRADE RELATIONS

The EU is one of the chief donor advocates of priva

The European Community considers the private sect

EU donor assistance to the busines

Much progress has been achieved in liberalising markets, in removing regulatory

The European Council meanwhile has similarly expressed that EU

The Council's policy communication thereby reiterates one of the primary

Despite these legitimising narratives, however, the EU's recent advo

other agents of development in civil society, especially the pr

EU is pursuing its commercial interest in ACP countries' potentially

Significantly, many ACP governments themselves app

EUROPE'S PSD INTERVENTIONS IN ACP STATES IREALISING

Given the strategic placement of PSD normative

All-ACP European Commission funded programmes in timefram

in the timeframe of the Ninth European Development Fund (EDF) from

Furthermore, when the capacity of individual ACP—EU

tourism and regional trade facilities' (Common

eastern Africa. In that year, however, the CDE, in this

The 'development' potential of the CDE's funding to Madagascan

have not based their export model on domestic sourcing an

the international competitiveness of the Kenyan cotton and textile sector is

In one short passage the viability of Kenyan cotton production was

This focus on immediate business profitability, accepted by the

Central to an understanding of 'private sector development' in con

developing countries. Accordingly, PSD concessions can

PSD concessions are a central component of recent

As the above examination of PSD normative concessions in the context

ACP governments the necessary policy space to pursue su

1. A normative concession is a 'gift' or form of material aid that is inf

regimes, which contemporary donor PSD discourse strategically

ACP-EU Cotonou Partnership Agreement [CPA] [2000] 2006. Partnersh

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