COMMENTARY: G8 leaders fail to lead

Posted: 28 July 2005

Author: John Madeley

The eight top world leaders who went to Gleneagles in July for the G8 summit achieved very little by meeting together.

On aid, for example, no additional aid was announced that was not already in the pipeline.

"Aid for developing countries", says the chair's summary of the meeting, "will increase, according to the OECD, by around $50 billion a year by 2010."

This clause "according to the OECD" is significant. Aid from the G8 countries and other donors was already predicted by the Organisation for Economic Co-operation and Development to increase by $50 billion a year - from $79 billion in 2004 to around $130 billion in 2010.

"A substantial increase in official development assistance is required in order to achieve the Millennium Development Goals by 2015", said the leaders. These goals include the halving of poverty.

But the United Nations estimates that $180 billion a year is needed by 2010 if these goals are to be reached by 2015. An additional $100 billion a year, not $50 billion, is therefore called for.

Aid strings

Leadership could have seen two things. It could have seen the eight leaders going beyond existing commitments and announcing an increase in aid to $180 billion a year. And it could have seen them announce that the additional aid will start immediately, rather than in five years time.

"If the $50 billion had kicked in immediately, it could have lifted 300 million out of poverty in the next five years" according to Jo Leadbeater of Oxfam.

On the use of aid, there was progress. The leaders made a commitment to providing access to HIV/AIDS "prevention, treatment and care" to all who need them by 2010, and also to replenish the global fund to combat AIDS, TB and malaria.

The extra aid will be for countries "which have strong national development plans and which are committed to good governance, democracy and transparency". This sentence is followed by: "we agreed that poor countries must decide and lead their own development strategies and economic policies".

But who is to say what is good governance? Might it include a liberalisation and privatisation agenda? Presumably if the G8 countries decide that economic polices are not in line with good governance, as they define it, there will be no aid. That sounds like strings attached.

Debt relief

On debt relief the leaders again achieved nothing by being at Gleneagles, and there are definitely strings attached. Their communiqué says that the debts owed by eligible indebted countries will be cancelled "as set out in our Finance Ministers meeting on 11 June".

This cancels the debts of 18 countries to the World Bank, the International Monetary Fund and the African Development Fund, and amounts to about $40 billion.

Significantly, finance ministers were not present at the G8 summit. Had there been negotiating on further debt relief, they might reasonably have been there.

And the strings are clear. The G7 finance ministers stated: "to qualify for debt relief, developing countries must "tackle corruption, boost private sector development" and "eliminate impediments to private investment. both domestic and foreign".

At the G8 summit in Cologne in 1999, leaders agreed to cancel $100 billion of Third World debt. To date around $50 billion has been cancelled and the decision of the Finance Ministers meeting in June will bring that total to $90 billion. So six years alter Cologne, G8 countries have still not delivered what they promised.

Damp squib

On trade, again the leaders achieved nothing. A commitment to abolish agricultural export subsidies has already been made. As export subsidies account for less than 10 per cent of overall support for agriculture, this is hardly a big deal. It will not stop overproduction and the dumping of surpluses in developing countries, to the detriment of their farmers

Salvation is seen in terms of the Doha Round, launched in 2001 and to be reviewed at the World Trade Organisation meeting in Hong Kong this November. But the Doha Round is a round to give the world more free trade, very different from the campaigners calls for trade justice that would allow countries to liberalise as and when they wish.

Lack of leadership made the G8 summit a damp squib. But summits rarely deliver much. The first six months of 2005 do give a better picture. On aid and debt relief the position is better than at the start of the year. Pressure from Make Poverty History campaigners encouraged to governments to move.

But the modest progress that more aid and debt relief could bring about are may be wiped out by the failure of the Gleneagles summit to do anything about global warming. The entrenched position of the Bush administration meant that no progress was possible.

"Any progress made on African development at the G8 summit will be fundamentally undermined by failure to commit to urgent action to address the causes and effects of climate change", said Sarah La Trobe of the UK-based aid agency Tearfund.

Climate change is already having a devastating impact on many African countries and communities, says Tearfund. Climate change will worsen Africa's already critical water crisis, it warns, put millions more at risk of hunger, increase the spread of malaria and other diseases and there will be an increase in the frequency and severity of floods and droughts.

All this seems to have been lost on the leaders at Gleneagles. Or, if they knew it, they didn't show it.

The biggest failure of the summit was perhaps the failure of leaders to tell the truth about how climate change could put the halving of poverty by 2015 out of reach.

And on aid and debt relief there are so far words, not action. Campaigners will be pressing for the words to be translated into action.

John Madeley's latest book,100 ways to Make Poverty History, is published in August.