G8 Summit 2007

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  • by Anup Shah
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The G8 met again, between June 6-8, 2007 in Heiligendamm, Germany.

As with previous years, the annual meeting’s buildup was full of anticipation and public pressure on the leaders to deliver on their promises. Pledges of vast amounts of money made the headlines together with G8 leaders’ self congratulations.

However, details reveal a more confusing picture and the amount pledged isn’t as high as it may first seem. Furthermore, discussion on expected issues didn’t necessarily mean success or concrete steps forward, while other important issues hardly gained media attention, despite their importance, such as health and intellectual property rights, and farms subsidies of industrialized nations.

Inter Press Service (IPS) summarized the meeting in an interesting way:

[The various] disappointments round out the image of an expensive, futile event, where G8 leaders only paid lip services to its own commitments, and who isolated themselves from demonstrators—and the world—with costs for security alone estimated at more than 135 million dollars.

Julio Godoy, G8: Much Talk, Too Few Results1, Inter Press Service, June 8, 2007

On this page:

  1. Headlines of $60bn pledge miss caveats and concerns
  2. Climate Change
    1. US attempts to water down climate change declaration
    2. Diverting attention to developing countries?
    3. Developing Country Progress Hardly Mentioned
  3. Medicine Access Rights and Intellectual Property Rights
  4. Farm Subsidies for the Rich Outweigh Any Aid
  5. Finance: addressing damage of speculative hedge funds
  6. What is the point of these G8 meetings if they never deliver?
  7. More Information

Headlines of $60bn pledge miss caveats and concerns

The mainstream headlines spoke of success. G8 leaders reach $60bn Aids deal2 the BBC reported. G8 leaders make $60B Africa pledge3, CNN wrote. Mainstream television headlines made similar notes.

However, behind these seemingly celebratory headlines, as many media outlets did this time reveal, the numbers contained fancy accounting, including dollars earmarked at previous G8 summits, for example.

Channel 4, a British mainstream media channel, noted that,

  • Of the $60bn, half was pledged by the US in the previous week, spanning 5 years; $30bn was new
  • When spread over 5 years, this $60bn amounts to $12bn a year
  • The figure was not guaranteed; it was a pledge (many large pledges in the past have not been delivered, and have been added to follow-up pledges, thus creating an impression of massive quantities of aid).

Max Lawson, senior policy advisor at the NGO Oxfam noted that The headlines sound impressive but ultimately mean precious little4. Instead of delivering what they promised the G8 has tried to get the biggest possible headline number out of the smallest possible aid increase. The $60bn for HIV/AIDS, health, TB and malaria represents, at most, an extra $3bn of aid in 2010. This is welcome but falls $27bn short of what the G8 pledged in 2005. (Emphasis added) In addition, the $60bn on HIV included considerable amounts of money from existing spending levels

What if headlines had said G8 pledges additional $3bn? Even Channel 4’s summary headlines spoke only of the G8 $60bn pledge, not the spin that they noted in their reporting.

U2 star and anti poverty campaigner, Bono, described this G8’s African deal as deliberately vague and misleading, saying it was a compromise on top of another compromise (the 2005 G8 Gleneagles declaration).

As well as development activists, the World Bank has also criticized G8 pledges for not being delivered5.

Another IPS report contained an interview of the World Bank’s Chief Economist for Africa (see previous link) who made a number of important points, for example:

  • That while there were increased funds for humanitarian aid but this does not mean funds for development, which is longer term.
  • While corruption of African governments is often raised when discussing these issues, The question is less whether the African partners are delivering on their promises, but whether the wealthy industrial nations are honoring theirs, noting the improved steps many African countries are taking even though the G8 has been slow to deliver its side of the pledges.
  • the G8 is short by an estimated 10 billion dollars in the disbursement of the development aid pledged in Gleneagles raising the concern that the new pledges will also be delivered slowly.

There was also disagreement on how to deliver aid6. The US, for example wants to continue bilateral arrangements (i.e. between itself and a recipient), while most others wanted a multilateral approach to avoid duplications. On the one hand, the US approach can be effective; it can concentrate on specific countries and bring pressure to ensure aid is not misdirected. However, as has been seen in global health issues7 in particular, this allows the donor to exert more pressure and conditions which may not always be for the benefit of the recipient. But even the aid delivery that Europe wants is not without problems. While in theory it may be a good approach, to date, regardless of bilateral or multilateral efforts, foreign aid has been manipulated and often benefits the donor more than the recipient8.

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Climate Change

The build-up to the meeting saw many discussions on climate change, from concerns about the US watering down draft texts on calls to action, to the impact China, India and the other emerging nations will have in opposing calls to impose targets on their emissions.

US attempts to water down climate change declaration

In the lead up to the 2005 G8 Summit it was revealed that the US in particular had tried to water down drafts on climate change9.

The same happened again this year. On May 26, 2007, the BBC reported on leaked documents showing how the US opposes G8 climate proposals10.

Almost two weeks earlier, on May 14, 2007, the BBC noted that the US was seeking changes to the climate change text11 proposed by the G8.

The examples given by the BBC of phrases the US struck out, include the following:

  • That climate change is speeding up and will seriously damage our common natural environment and severely weaken (the) global economy… resolute action is urgently needed in order to reduce global greenhouse gas emissions.
  • The statement that we are deeply concerned about the latest findings confirmed by the Intergovernmental Panel on Climate Change (IPCC)
  • a commitment to send a clear message on international efforts to combat global warming at the next round of UN climate talks in December.

And, US negotiators also wanted to remove from the draft firm targets for improving energy efficiency in buildings and transport, and a call for the establishment of a global carbon market.

Yet, a White House spokeswoman on Environmental Quality still insisted that, The US continues to lead the global effort on climate change.

Diverting attention to developing countries?

Bush also tried to push forth the idea of a non-binding set of global emissions reduction targets by the end of 2008; an approach outside the G8, and even criticized by the European Union’s Environment Commissioner12.

Many have criticized it as a way to divert attention from growing criticism, even from other G8 members, at the US government’s isolated stance on climate change. The proposed deal is targeted to the 15 top greenhouse emitters. This includes India and China. But this seems doomed to failure because, as explained at length elsewhere on this site, it is unfair to expect these two to make the same level of changes as the rich countries, because it has been the rich nations largely responsible for the anthropogenic aspect of climate change. The agreed principle of common but differentiated responsibilities is clearly being ignored by some wealthier countries, in part because the mainstream repeatedly fails to raise these issues and challenge their leaders on this, thus allowing unfair positions to be commonly accepted in the public’s view.

The other concern is that this tactic of seemingly appearing inclusive will allow the almost guaranteed failure—China and India are unlikely to accept such unfair conditions—allowing the US and others to lay the blame on the developing countries. The mainstream media, when it does occasionally mention the common but differentiated responsibilities principle will present it as India and China’s view, rather than as an agreed international principle, thus giving citizens of the rich countries the view that this is just the view of those countries, to be balanced with the view of the wealthy nations. (An example of false balancing.)

As discussed in more detail on this site’s section on climate change and global warming13, such delay tactics from the richer countries and ineffective reduction in emissions will mean when Kyoto is up for change in 2012, developing nations are likely to face more pressure to submit to targets. This will allow rich countries to possibly get away from any responsibility for an issue largely of their own making. That is not to say as India and China develop they should use cleaner technologies, etc, but the rich nations must not let attention be diverted to that without focusing on their own responsibilities.

Developing Country Progress Hardly Mentioned

New Scientist reports that Brazil, China, India and Mexico and other such fast developing countries have slowed their rising greenhouse gas emissions by more than the total cuts demanded of rich nations by the Kyoto Protocol14 yet this is rarely reported by the mainstream when Bush and others point to China and India concerns.

Policies primarily intended to curb the air pollution from factories and cars or to save energy have had the side-effect of fighting global warming. Note, however, the emissions are still rising, but at a much slower rate.

As the meeting concluded, hardly reported in comparison to the concerns of China and India’s rising emissions and lack of mandatory caps was that the so-called G5, the emerging powers (Brazil, China, India, Mexico, and South Africa), also offered plans to address climate change as an alternative to the watered down approach announced by the G8 (as IPS put it).

The developing world’s G5 will reportedly call for differentiated burden-sharing to reduce global greenhouse gas emissions, and ask for unimpeded access to fuel-efficient technologies without onerous intellectual property requirements, in order to help them curb emissions without undermining development.

As a counter to Washington’s proposal, which demands that Asian giants India and China undertake substantial commitments to reduce greenhouse gases on par with the United States, the five are proposing a developmental agenda in addressing climate change, sources said.

Ravi Kanth Devarakonda, Emerging G5 Take Counter-Proposal to G815, Inter Press Service, June 7, 2007

The additional problem was that the G8 countries again made vague proposals, rather than solid commitments:

Despite opposition from U.S. President George W. Bush to a 50-percent cut in emissions by 2050, the G8 leaders reached some tentative understanding on this issue and agreed to conduct future negotiations at the United Nations but not at a parallel 15-member platform as Bush had sought.

Though the G8 leaders … agreed to take strong and early action, there is no concrete plan yet.

Ravi Kanth Devarakonda, Emerging G5 Take Counter-Proposal to G816, Inter Press Service, June 7, 2007

The principle of common but differentiated responsibilities, while presented as an Indian or developing country proposition, has long been accepted by the international community.

The feet dragging concerns mentioned earlier will result in developing countries understandably resisting calls to be subject to targets. They will point out that the rich countries have not met their obligations first, and will fear that those nations are trying to get away from doing anything too substantial and pass the responsibility on to the emerging nations. All and for a problem largely created by the industrialized nations. (Geopolitically this tactic would make sense for rich countries, fearing India and China in particular as countries seen to rise and dominate in the future, as the US and Europe’s influence wanes further.)

Yet, if G8 leaders are serious about China and India being subject to targets (for such countries will eventually need to be as they continue to grow), they will have to demonstrate that they can do it too. Already, as noted below, developing countries have made significant emission cuts.

But even amongst G8 countries, views differ. As IPS adds, foreign ministers of the European Union and Asia agreed … that any future arrangement would pursue differentiated commitments for industrialized countries and developing countries. But the United States is averse to an arrangement where it would have to undertake maximum commitments, observers say.

In addition, Russia and the US have only decided to seriously consider a proposal by other G8 countries to half emissions by 205017.

According to the previous IPS link, it turns out that there was some spin and politics involved, whereby German Chancellor Angela Merkel, hosting the meeting, was under domestic pressure to deliver a concrete agreement. When it was clear the US was not going to accept binding emission caps,

the German government tried to reduce expectations for the summit.

A classified public relations strategy, formulated by close aides to Merkel three weeks ago, said that The German public opinion expects that the summit will be a success on environmental protection… The summit will be seen as a failure if no convincing results (on this matter) can be reached.

According to the paper, Chancellor Merkel went so far as to demand that in the weeks prior to the summit an effort to reduce… the expectations on environmental protection and energy efficiency.

Julio Godoy, US, Russian Reticence Leaves Loophole in G8 Deal18, Inter Press Service, June 7, 2007

And while Merkel should be given credit for keeping climate change on the agenda and at least getting some agreement of key principles, as Share The World’s Resources organization notes, addressing the huge subsidies of the fossil fuel industry has not been address:

The International Finance Corporation, the private sector investment arm of the World Bank, increased its financial support for oil companies by 77%. Oil Change International states; if G8 leaders want the World Bank and other international financial institutions to play a leading role in the fight against climate change, they need to demand that these institutions stop using public money to bankroll the oil industry. It’s outrageous that we are funneling billions of dollars worth of aid money into the pockets of oil companies instead of using that money to fight poverty and kick-start a new energy revolution.

… the G8 Agenda makes no mention of the Stern Review, which recently assessed the economic cost of climate change. The evidence gathered by the Review leads to a simple conclusion: the benefits of strong and early action far outweigh the economic costs of not acting. Again this omission may be due to pressure from Washington, since the Stern Report spoke of policies that distort the market in favor of fossil fuels. The report was referring to the $250 billion a year in direct and indirect subsidies to oil and other fossil fuels. The oil industry benefits from income tax benefits, indirect subsidies on gasoline sales tax and tax subsidies for modernizing and expanding their refineries. In addition to this the oil industry causes billions of dollars worth of oil-related health and environmental damage. California Public Interest Research Group (CalPIRG) produced a report which showed that the oil industry is spending millions each year fighting clean air laws.

Mohammed Mesbahi and Dr Angela Paine, G8 Agenda: Shared Responsibility or Self Preservation19, Share The World’s Resources, June 7, 2007

And so, much talk about the post-Kyoto Protocol (which itself was a watered down and questionable protocol, to some extent) will be in the context of rich nations not doing much during Kyoto. Developing countries will cry foul and hypocrisy as with many other issues. If mainstream media reporting remains of questionable quality, we will never understand this context fully, and our own politicians will make claims against developing countries without giving citizens the ability to make fully informed opinions, decisions and choices. It risks creating animosity amongst different people, rather than unity, which for an issue as important as climate change, is crucial.

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Medicine Access Rights and Intellectual Property Rights

The presence of the so-called G5 helped limit the extent to which rich countries wanted to change the direction of intellectual property rights.

The G8 wanted to promote the idea of innovation, while protecting it (i.e. intellectual property rights). While most accept that this is important to encourage innovative developments, there has been criticism around the world, over the way in which multinational pharmaceutical companies have pushed for it aggressively even when World Trade Organization rules allow alternative production or acquisition of medicines for health emergency purposes (such as dealing with AIDS).

What the G5 managed to do was to push for the inclusion of the need to address public health in the balance between grave health emergencies and protection of patent rights of pharmaceutical companies.

Oxfam, mentioned earlier, also warned that an extremely aggressive approach to Intellectual Property rules could undermine the benefits of extra money by pushing up prices for essential medicines in the developing world and denying access to inexpensive generics.

Perhaps even more worrying is that the G8 has been attempting to shift intellectual property discussion to the OECD, which they control even more than the WTO20 thus having dangerous implications for developing countries.

The rich countries have long been criticized for the unfair and heavy influence in the WTO. As the Doha Round of world trade talks showed, however, if developing countries act united, they can stand up to unfair demands. And so, the Doha Round stalled21.

What is also concerning here is that just as G8 leaders and their media present the view of almost being saviors for the world’s poor, they are using these tactics to undermine key issues that would promote the development of poorer countries. And without much mainstream media attention.

(To be fair, intellectual property rights is a big issue not just for pharmaceutical companies, but software companies like Microsoft, and the recording/entertainment industry, that face problems of piracy and music sharing, hence many other influential multinational companies are all together lobbying for stronger intellectual property rights enforcement the world over. The way this has been done however, is of immense concern, reflecting politics and power, rather than fairness and equality. For more details, see this site’s sections on global health issues22 and the Doha Round23.)

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Farm Subsidies for the Rich Outweigh Any Aid

As was feared, discussion of rich country farm subsidies was not on the agenda, despite its enormous size.

Quoting a United Nations Human Development Report, IPS summarized this issue as follows:

The world’s richest countries spent just over one billion dollars for the year 2005 on aid for agriculture in poor countries, and just under one billion dollars each day of that year for various subsidies of agricultural overproduction at home. A less appropriate ordering of priorities is difficult to imagine, concluded the U.N. report.

Julio Godoy, G8-Africa: Farm Subsidies a Taboo Subject?24, Inter Press Service, May 30, 2007 [Emphasis Added]

Furthermore, as Godoy also notes, the systematic undermining of African economies, mostly be the rich G8 nations, has gone on to such effect that the if sub-Saharan Africa enjoyed today the same share of world exports as it did in 1980, the foreign exchange gain would represent about eight times the aid it received in 2003.

As a result, around the world, the rich country agriculture subsidies have been described as excessive, unfair, and even hypocritical, for it employs protectionism while requiring opening of markets for poorer countries. This has resulted in cheap agriculture products from rich countries being dumped onto poorer countries, increasing world hunger25.

For sure, it is a very sensitive and difficult subject for many rich countries, but crucial for the poor.

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Finance: addressing damage of speculative hedge funds

Another issue that did not gain much media attention was the damaging effects of hedge funds in developing countries26 and attempting to address them. Some G8 countries wanted to introduce a code of conduct on hedge funds, while (unsurprisingly, as the IPS rightly noted), the US and UK resisted, as most hedge funds operate there.

Why are hedge funds of concern? As IPS also summarized, hedge funds are highly risky and speculative operations. This means they

  • Tend to destabilize international financial markets,
  • Undermine growth in the real economy, and
  • Have the potential to provoke a major crisis among banks and other private financial institutions.

Even hedge fund managers are beginning to admit that the present state of deregulation and lack of taxation upon the funds’ transactions is unacceptable, notes IPS. In an op-ed article in the London Financial Times, Nicolas Ferguson, chairman of investment group SVG, revealed that he and his peers paid less tax than a cleaning lady.

The G8’s declaration simply said they reaffirm the need to be vigilant which in diplomatic parlance means close to little.

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What is the point of these G8 meetings if they never deliver?

Year after year, as the G8 prepare to meet, campaigns appear in the media encouraging these leaders to act and save the world. And yet, year after year, these campaigners go away disappointed, noting the hypocrisy, double standards, and fancy accounting that the mainstream media headlines often report.

Promises from G8 leaders are rarely fulfilled and yet there is little accountability for these false hopes. So why do campaigners keep trying?

Some argue that we should not rely on governmental, top down delivery of such things. Instead, it should be left to free markets, and local/direct piecemeal actions, perhaps smaller in scope, and easier to measure, to get results and accountability. William Easterly for example, makes an excellent case in The White Man’s Burden; Why the West’s Efforts to Aid the Rest have Done So Much Ill and so Little Good, (Penguin Press, 2006).

Some critics of this government/top-down approach see this as a state versus free market approach. That would be too narrow a characterization, for it is really addressing more fundamental issues of power imbalance and abuse of free market systems, and also recognizing that markets often do not solve problems on their own; they need injection from other spheres of society (consider the enormous agricultural or fossil fuel subsidies in the rich countries, for example).

In addition, sometimes these views omit that some multinational companies have also often worked to the detriment of poor countries, just like rich country governments. Furthermore, rich country governments are (at least theoretically) accountable to their citizens, while multinational companies are not. Campaigning governments to be more mindful of the businesses that lobby them for various things is seen as one way to address these issues.

Some businesses may not be doing this on purpose, necessarily; the pressure of the market etc may result in such an outcome. Some overriding approach or framework that businesses may partake could help avoid misdirection, redundancy, inappropriateness, or wastage. Indeed, for climate change for example, many multinational businesses are actively encouraging governments to provide regulation so they know where they stand and so that they can all compete from a level playing.

Ultimately, it would seem the poorer countries need to help themselves. Perhaps aid increases, even if they happen, are doomed for failure, if the continue to come with unfair conditions attached. If poor countries can develop and trade amongst themselves, perhaps then they can withstand unfair demands of richer countries better. However, to do this, may require campaigning rich country governments to limit the damage they are causing and get them to help reign in the excesses of some multinational corporations that exploit developing countries.

Of course, in all this there will be companies and organizations and countries that genuinely want to help and so surely a multi-pronged approach is better than a top down only or a bottom down only approach.

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More Information

There are countless sites discussing the G8 and related issues and it would be futile to attempt a comprehensive list. Instead, a few useful starting points are provided from which further exploration may find other sources:

  • Coverage from Inter Press Service27, a news wire that tends to provide more global coverage that most mainstream outlets
  • Oxfam’s G8 Summit 2007 section28 and their The World Can’t Wait Campaign29
  • Coverage from the World Development Movement30 includes a look at the large turnout of protesters
  • AllAfrica.com31 aggregates news from all over Africa
  • Related Articles From Elsewhere on this Site
    • Third World Debt Undermines Development32
    • Conflicts in Africa33
    • Food Dumping [Aid] Maintains Poverty34
    • Causes of Poverty35
    • Climate Change and Global Warming36

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0 articles on “G8 Summit 2007” and 3 related issues:

G8: Too Much Power?

Read “G8: Too Much Power?” to learn more.

Sustainable Development

Read “Sustainable Development” to learn more.

Trade, Economy, & Related Issues

Read “Trade, Economy, & Related Issues” to learn more.

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  • by Anup Shah
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Document revision history

Update summarizing meeting’s outcome