G8 Summit 2005 Outcome

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  • by Anup Shah
  • This Page Created Sunday, July 10, 2005

The previous pages in this section described legitimate concerns and criticisms of proposals made by G8 leaders, leading up to the actual summit. For example, there was a lot of spin that made a debt write-off proposal for the poorest of poor sound like $40 billion dollars, when it really amounted to $1 billion a year, and was worth around $17 billion in real terms. Furthermore, the harmful conditions attached to this debt write-off meant that many of the critical causes of poverty and misery would still be in place.

The G8 Summit was accompanied by massive public pressure, notably in the form of the global Live8 concerts.

So what was the outcome?

Summary: Many bad points, some good points

The main highlights of the G8 outcome included the following:

  • The G8 agreed a $50bn boost to aid and EU members pledge to reach a collective aid target of 0.56% of GDP by 2010, and 0.7% by 2015
  • Stalemate on climate change as US position barely budges
  • G8 nations agree to full debt cancellation for the poorest 18 countries, while African countries call for debt relief for all of Africa
  • A “signal” for a new deal on trade
  • Universal access to anti-HIV drugs in Africa by 2010
  • More money for addressing malaria
  • Intending to help improve education for all in Africa

Much of this sounds very promising, and like a resounding success. But behind these bullet points lie details that seriously undermine such a rosy view.

UK-based development organization, ActionAid, is worth quoting for a summary of the G8 meeting’s outcome:

Bad news:

  • No progress on trade, a disaster for a continent where 60% of employment comes from small scale farming.
  • The aid increase is too little too late, condemning 50 million children to death over the next five years. And the G8 will do little to improve the effectiveness of their aid.
  • The aid announced is insufficient to meet the G8’s AIDS treatment target.
  • The debt deal offers only 10% of what is needed and comes with harmful conditions.
  • What we have is only promises, on past record it is far from certain how much will actually be delivered.

Good news:

  • Millions of people came together in a global campaign to end to poverty, wearing white bands, watching Live 8 concerts, sending personal messages to world leaders, and joining the largest-ever march in Scotland.
  • The UK government responded to campaigners and southern leaders by putting poverty and Africa at the center of the Gleneagles agenda.
  • The G8 have been made some steps: canceling some debts of some poor countries, providing small amounts of extra aid and recognizing that countries must be free to determine their own economic policies – tantamount to recognition that the current practice of attaching strings to aid must be radically altered.
  • The campaign does not end here. The spotlight will remain on G8 leaders as people around the world scrutinize their policies and actions. Momentum behind the call for justice is growing and pressure for the World Trade talks, World Bank’s conditionality review, and the UN’s Millennium Review Summit to deliver before the year is out is now intense.

Justice for Africa postponed. The campaign continues, ActionAid, July 8, 2005

So what are some of the extra details and concerns? The remainder of this page introduces those:

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Doubling Aid? Not So

The G8 leaders were proud to announce a doubling of aid from $25 to $50 billion by 2010. However, there was more spin to this. For example:

  • It was not a doubling, it was an increase of about $15 to $20 billion in new money. The remainder had already been earmarked for this purpose. So it was not a total doubling, even though the government spin and media reporting on it made it appear to be doubling resulting from this G8 Summit.
  • While it is good that by 2010, there will be a doubling of aid, each year the rich countries fall short on their aid promises by about $50 billion.
  • A doubling to $50 billion by 2010 means there is still a huge shortfall each year, in the obligation from rich countries to increase their aid to 0.7% of GNP, a promise made many years ago.

Many lives are at stake by this lack of aid (as well as other things, no doubt), so this spin is very unhelpful for it seems more could be done.

Sanjay Suri, reporting for IPS news agency, highlighted a number of issues quite well also noting that while Bob Geldof and Bono sung praises of the G8 outcome, most other Make Poverty History campaigners thought it was a failure.

Examples of issues that Suri notes include:

  • Much of the aid “doubling” comes from an addition of intentions, not of commitments, which implies – based on history – that some of the aid increases may not happen.
  • Some of the statements of intent had been announced previously.
  • Only Britain has announced it will not tie its aid to market liberalization and privatization requirements. These factors, as various important reports repeatedly show, rather than increasing prosperity and development, have had terrible consequences on poorer countries, especially when those markets are fragile and cannot compete against the massive companies from the rich countries.
  • The G8 declaration was silent on the whole question of quality of aid, and whether it would be tied to purchases from the donor country. This is also discussed in more detail on this site’s section on foreign aid, but to summarize here, the concerns with these are that:
    • Large percentages of aid is tied into using that money to buy services and products from the donor country (some 70% of US aid is tied in this way, for example), and hence that money never leaves the shores of the donor
    • Such “tied aid” can reduce the value of aid by some 25 – 40%.
    • This is criticized by many for really being a form of corporate welfare.
  • “Russia has canceled and committed to cancel $11.3 billion worth of debts owed by African countries,” the G8 had declared. That alone, said Suri, explains close to half of what this supposedly new aid package is about.

With such distortions of numbers, one can understand the criticism, and even the cynicism sometimes heard that, for example, Tony Blair and George Bush, are spinning this to enhance their image, especially given they have both seen dips in recent times, further compounded by the World Tribunal on Iraq finding them to be war criminals (though there was no mainstream media coverage of this) and Geldof even told other music stars not to criticize Bush and Blair during the Live8 concerts.

Geldof and Bono both praised the G8 outcome, though they noted that these were just small steps. However, they praised those small steps very much. Geldof even praised the summit with “10 out of 10 on aid, eight out of 10 on debt”. Suri concludes with criticism that some of this praise was unwarrented:

“Bob Geldof’s response to the G8 communiqué is misleading and inaccurate,” said Peter Hardstaff, head of policy for the World Development Movement. “By offering such unwarranted praise for the dismal deal signed by world leaders he has done a disservice to the hundreds of thousands of people who marched in Edinburgh at the weekend.”

Speaking at a meeting in Edinburgh after the announcement, Hardstaff said Geldof’s comments “do not reflect the collective conclusions of the development campaigns who make up Make Poverty History. Mr. Geldof has become too close [to] the decision-makers to take an objective view of what has been achieved at this summit.”

John Hilary, director of policy and campaigns at War on Want, said: “Bob Geldof may be content with crumbs from the table of his rich political friends. But we did not come to Gleneagles as beggars. We came to demand justice for the world's poor.”

Hilary added: “We have no problem with Geldof celebrating the successes of the Gleneagles summit and the 10 million lives he feels will be saved as a result of this deal. But what about the other two billion people driven into poverty by the policies of the G8? Did the leaders of the rich world have nothing for them?”

Sanjay Suri, Pop Campaign on Africa Fizzles Out, IPS, July 9, 2005

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Debt Write-off: Not Historic; It is Spin

Leading up to the Summit, in June, G8 leaders announced a proposal to write-off the debt of the 18 poorest countries, as well as possibly others if they meet their conditions. The write-off, they said, would amount to $40 billion for those 18 countries. This proposal did not change for the final meeting.

As discussed already on this site in detail, while welcome, that $40 billion write-off is not historic; it is spin. For example (and summarizing from that previous link):

  • It is spread over 40 years, amounting to $1 billion per year
  • In real terms, this is around $17 billion in write-off
  • Unfair and harsh economic conditions are still in place, promoting unequal trade
  • While it is 100% cancellation for those 18 countries covered, it is around 10% for the total number of countries that urgently need debt relief.
  • It is hardly a cancellation. What is given with one hand is taken with the other, because countries will receive a dollar for dollar reduction in aid flows equivalent to the amount canceled

Poverty in Asia, for example, has not been on the agenda, which has almost twice as many people in absolute poverty than Africa. India, which has seen a recent tech boom is seen as a rising star, but the focus on the tech boom hides that it has the world’s highest number of people in absolute poverty, and the tech boom is only benefiting a small minority of people. As crucial as it is to address issues in Africa, as it is the only region in the world where poverty is growing, this should not detract from addressing world poverty.

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Climate change: virtually no progress

In addition, on climate change, there was virtually no progress, other than, as the mainstream media reported, the US did at least admit that human activity may be contributing to climate change. But why this is considered a small victory or step forward is a bit concerning, because the US admitted human actions contributing to global warming back in 2002! Hence, it would seem no real progress was made.

As discussed on this site’s page about the G8 build up and climate change, the first leaked draft report on climate change leading up to the G8 Summit suggested some targets for tackling climate change. The second draft that was leaked saw US pressure remove all that, and even question some aspects of climate change. While there was a a lot of talk about what can, should and would be done, the final communiqué had very little substance, specific targets, or numbers for dealing with climate change.

The BBC also noted that some watering down of the text showed US influence at hand. For example, in the past, Tony Blair had described climate change as a ‘Threat’ but the communiqé said it was a ‘challenge’ which is what Bush had called it. The influence that Blair was supposed to bring to Bush seemed absent.

Blaming Developing Countries For A Problem Largely Caused by Rich Countries

There was additional spin, too, which the mainstream media failed to mention or scrutinize: Bush and Blair highlighted that climate change discussions are pointless without the larger developing countries such as China and India being there. However this ignored a major point, the long-agreed “common but differentiated responsibilities”which the international community accepted and recognized that:

  • The largest share of historical and current global emissions of greenhouse gases has originated in developed countries;
  • Per capita emissions in developing countries are still relatively low;
  • The share of global emissions originating in developing countries will grow to meet their social and development needs.

Some greenhouse gases such as carbon dioxide linger in the atmosphere for almost a century before being broken down. 80% of historical carbon emissions are from today’s rich countries.

Poor/developing countries will pay three times:

  1. Paying for being cleaner, using better technologies, and so forth (which they should do as they start to develop)
  2. Paying for the environmental impacts most likely to be felt hardest in poorer countries (which they will likely have to do, though could be argued that the rich countries will also need to contribute something as they have been responsible for most of the greenhouse emissions)
  3. Paying for rich countries, because rich countries are not committed to doing anything seriously, it seems. That is, by stalling on the (watered down) Kyoto Protocol, and waiting for its time to pass, it will result in the developing countries paying a heavier price for the problems largely caused by today’s industrialized nations. Ironically this G8 Summit highlights how poor some countries are, and yet, they will have to use more of what little money they have to pay for climate change purposes.

China, India, Brazil, South Africa, and Mexico were the key developing countries urging the rich countries to keep to the Kyoto Protocol. Although it received less press coverage, they issued a statement noting that

  • The Kyoto Protocol “adequately addresses the economic, social and environmental aspects of sustainable development”.
  • Industrialized countries have to take the lead in international action to combat climate change by “fully implementing their obligations of reducing emissions and of providing additional financing and the transfer of cleaner, low-emission and cost-effective technologies to developing countries”.
  • Changes in the “unsustainable production and consumption patterns in the industrialized countries must be implemented”
  • Industrialized countries must also ensure “technologies with a positive impact on climate change are both accessible and affordable to developing countries”.

In recent years, while poorer countries are not tied to specific emission reduction targets, they have made strides in reducing emissions (unlike a number of rich countries). This, and in particular, the issue of “climate justice”, is covered in more depth on this site’s section on climate change. Two particular starting points in that section are as follows:

  1. Global Warming – this is the main page that introduces all the other pages in that section
  2. Climate Justice – which discusses the differentiated responsibilities mentioned above.

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Trade: No Progress

Perhaps one of the key areas is trade. Issues that needed to be addressed such as the rich countries’ farm subsidies and their protected markets (while forcing poor countries to open theirs at the same time) were not discussed at all. Trade discussion was left to later in the year. Trade issues are crucial for Africa so the delay in this is seen as a setback.

While debt relief might be helpful, real progress would be made in fairer, and more equal trade. As highlighted in this site’s section on Structural Adjustment, IMF/World Bank/rich country economic policies have forced upon poorer countries a pattern of trade that is unequal and contributes to poverty. For example, as J.W. Smith of the Institute for Economic Democracy notes,

[I]f a society spends one hundred dollars to manufacture a product within its borders, the money that is used to pay for materials, labor and, other costs moves through the economy as each recipient spends it. Due to this multiplier effect, a hundred dollars worth of primary production can add several hundred dollars to the Gross National Product (GNP) of that country. If money is spent in another country, circulation of that money is within the exporting country. This is the reason an industrialized product-exporting/commodity-importing country is wealthy and an undeveloped product-importing/commodity-exporting country is poor. [Emphasis Added]

...Developed countries grow rich by selling capital-intensive (thus cheap) products for a high price and buying labor-intensive (thus expensive) products for a low price. This imbalance of trade expands the gap between rich and poor. The wealthy sell products to be consumed, not tools to produce. This maintains the monopolization of the tools of production, and assures a continued market for the product. [Such control of tools of production is a strategy of a mercantilist process. That control often requires military might.]

J.W. Smith, World’s Wasted Wealth II, (Institute for Economic Democracy, 1994), pp. 127, 139

To add to that, an economist from Benin, Yaya Orou-Guidou, notes also that exporting raw materials and agricultural products is not going to help fight poverty. Those raw materials have to be processed in the same poor country to help create a multiplier effect:

Orou-Guidou believes Benin will need to start processing the raw materials it produces if it is to escape the poverty trap.

“A prime material kept in Africa for processing in our factories is one less thing for Western factories to earn money on”, he notes. But, if “we content ourselves with selling our agricultural or mining products in their raw states, they will always feed Western factories which provide jobs for (the West’s) own people.”

Ali Idrissou-Toure, Debt Cancellation No Panacea for Benin, Inter Press Service, July 7, 2005

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G8/Corporate Interests using Poverty as Spin?

Even though there hasn’t been anything specifically on trade, a number of people are weary about G8 intentions for Africa. While spun as a great deal for poverty and debt relief, etc, there is a fear that, given the high emphasis on opening African markets to free trade and privatization, that this is really a Summit that helps improve the multinational companies based in the G8 nations, and deeper penetration into African affairs.

Author and former director of the development organization, World Development Movement, Mark Curtis, notes Britain’s influence in this Summit, and writes:

The Foreign Office was not joking when it stated in a 1958 file that aid was “a weapon in the armory of foreign policy”. The Department for International Development's (DfID) recent document, Partnerships with Business, states that most aid recipients “are commercially important to the business sector, not just as export markets, but also for sourcing inputs and raw materials, for foreign investment and joint ventures ... Business may become involved in the identification of key policy and regulatory constraints to the business environment.” DfID’s aid is “typically” used to “enable the private sector to invest with more confidence”. This explains why tens of millions of pounds go to British companies to force water privatization on poor countries.

Africa needs less aid like this. And less debt relief, if it comes with these conditions. And less trade with rich countries, if it is forced to open up markets.

... The basic aim of British elites has traditionally been to help companies get their hands on other countries’ resources. Secret 1960s files state that “we should bend our energies to help produce a world economic climate in which our external trade, our income from invisibles and our balance of payments can prosper”.

... Postwar planners never intended to allow African countries to be truly independent. After decolonization, they sought to establish pro-western elites – like those who now welcome the G8 agreements – and impose indirect economic rule through levers such as aid. The Attlee government, which established the aid program in 1948, drained millions from Africa to help Britain's postwar recovery. Current development policies are ways to control nominally independent economies in a post-imperial world.

G8 leaders favor private business interests, and their agreement is a vehicle to facilitate the corporate plunder of Africa. Britain’s lead in this needs to be exposed and challenged.

Mark Curtis, Brown’s doleful role at Gleneagles, The Guardian, July 9, 2005

Michael Chossudovsky, professor of economics and director of the Centre for Research on Globalization (CRG) is even more critical, especially of the Live 8 events, which he sees as a mega corporate event, due to the potentially large profits and positive image/branding that be created:

Live 8 is a multimillion dollar undertaking, which will result in huge profits for its corporate sponsors

... TV air-time has been auctioned off around the world. Millions of dollars of advertising revenues are expected from the broadcasting of the event, not to mention the repeats, the video-clips, the internet broadcasting and the DVDs, which will be available commercially.

According to the producers, Live 8 will go down as “the biggest global broadcast in history”.... The advertising industry places the number of potential viewers at a conservative two billion, approximately one third of the World's population.

By far this is largest media advertising operation in history, which will line the pockets of the promoters, producers, corporate sponsors, not to mention the royalties accruing to the performers and “celebrities”. A small percentage of the proceeds might accrue to charitable organizations involved in developing countries but this is not the stated objective of Live 8.

... More generally, the event instills an atmosphere of ignorance among the millions who listen to the music and who have the feeling of doing something positive and constructive. But none of the core elements needed to understand the causes of global poverty are presented.

To the Live 8 corporate sponsors, including Bob Geldof, the EMI Group, AOL Time Warner, The Ford Motor Company, Nokia, MTV, the Walt Disney Company, etc. “Put your money where you mouth is.”

If you are really committed to poverty alleviation, give the entire proceeds of this multimillion dollar media operation, including the revenues generated by the corporate sponsors, TV networks, advertising firms, royalties accruing to celebrities and performers, to the people of Africa. Let them use this money as they see fit, without interference from donors and creditors.

To the people of Africa. Do not let yourself be deceived by a giant corporate media stunt where poverty is used as a logo, to attract consumers and make money. Default on your debt to the IMF and the World Bank.

Michael Chossudovsky, Live 8: Corporate Media Bonanza; Disinformation Campaign and Public Relations Stunt on behalf of the G8, Centre for Global Research, July 5, 2005

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Some Progress on Health and Education

In the final communiqué the G8 said they would “work to support the Education for All Agenda in Africa”, though didn’t mention any specific targets or numbers.

On health, the G8 said they would try to get “as close as possible to universal access to [HIV/AIDS] treatment for all who need it by 2010”.

Vaccine development was also encouraged to help fight AIDS, malaria, tuberculosis, and other neglected diseases. Unfortunately no specifics were mentioned, and in the past there has been great concern at the profiteering by multinational pharmaceutical companies who have often opposed cheaper drugs and alternatives for poor countries, as detailed on this site.

For Polio eradication and action against malaria the G8 promised to contribute to the targets of $829 million and $1.5 billion a year. However, they did not specify how much they would contribute to those targets.

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Some possibly unexpected positive outcomes

While not direct outcomes of the meeting, for the first time, non-governmental organizations were allowed to take more active part. Many of these organizations have been pressuring G8 governments to do more in terms of poverty, debt cancellation, and so on. This may therefore set a positive precedent for future G8 meetings.

A number of developing countries were invited, so they should likely feature in any subsequent meetings.

The raised public awareness due to Live 8 and the Make Poverty History campaign may mean leaders are under more watchful eyes. (Although this also depends on media coverage which, while extensive, was not always very detailed, especially in terms of the attention-grabbing headlines which seemed more to be driven by announcements, agendas, and claims of G8 leaders, than investigating of their claims, as also discussed previously.)

An additional concern also raised in the previous pages regarding the build-up to this meeting was that if the G8 leaders’ spin is not fully scrutinized by the mainstream, then there is a real fear that the general public could get disillusioned when they see that the poverty situation hardly changes in the coming years. And this could mean that future campaigns to help fight poverty, on a massive scale, could be harder to organize.

As mentioned above, and in the previous coverage on this site about Geldof and his presenting of G8 leaders almost as saviors, there may yet be a pay-off for this “Geldof Gambit.” When he did tell other music groups not to criticize these two leaders, one aim was to have Bush and Blair with the people, rather than against (paraphrasing George Bush). Perhaps by over-praising them, this worked. No doubt, Bush and Blair are using the positive image to their own credit too, but perhaps this lays the way forward for various groups and citizenry to ensure these leaders follow up on what they have said.

The ghastly attacks on London that coincided with the G8 Summit has drawn the British mainstream media’s attention away from the G8 outcome almost completely. However, many media critics had predicted that the media would likely forget the Summit, anyway, as that is often the case with other global summits that have a crucial bearing on world issues such as poverty.

Hopefully all those millions who took part in Live8, and Make Poverty History campaigns will not forget as easily as the media. With the massive public awareness raised, perhaps many from the millions will be able to continue keeping an eye on the G8 leaders to see if their promises are actually carried out.

The spotlight may be on world leaders in a way rarely known in the past, on these issues. If all these people and the mainstream press have taken away their experiences from this, and do their follow-up “homework”, perhaps there is a real chance for change, even though these first steps forward have been extremely small.

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Author and Page Information

  • by Anup Shah
  • Created: Sunday, July 10, 2005

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