G8 Summit 2005 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:

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:

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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.

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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,

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:

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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:

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:

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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 countries²², 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 detailed²³, 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 saviors²⁴, 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 London²⁵ 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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