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?

On this page:

  1. Summary: Many bad points, some good points
  2. Doubling Aid? Not So
  3. Debt Write-off: Not Historic; It is Spin
  4. Climate change: virtually no progress
    1. Blaming Developing Countries For A Problem Largely Caused by Rich Countries
  5. Trade: No Progress
  6. G8/Corporate Interests using Poverty as Spin?
  7. Some Progress on Health and Education
  8. Some possibly unexpected positive outcomes

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 continues1, 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 billion2.
  • 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 failure3.

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 happen4.
  • 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 countries5, 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 aid6, 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 Iraq7 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 concerts8.

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 Out9, 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 spin10. 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 agenda11, 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 200212! 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 change13.

The BBC also noted that some watering down of the text showed US influence at hand14. 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