Global Trends by Martin Khor

Monday 11 July 2005

Mixed results from the G8 Summit

Blurb:  It was a terrible week for Britain, with the London bombings overshadowing the G8 Summit.  The results of that summit were mixed, with some progress in aid and debt relief, but little on climate change and none on trade.


Britain became the focus of world attention last week.  There could hardly have been more of a roller-coaster experience for that country.

The first event was the Live Eight concert at Hyde Park, London on 2 July when 200,000 people joined the pop stars to send a message to world leaders to “make poverty history.”

Then came British people’s euphoria on 6 July when it was announced London would host the 2012 Olympic Games.  

Just after that, the Group of 8 summit in Gleneagles started with leaders of the rich countries having dinner with the Queen on Wednesday night and an opening on Thursday morning.

But by that morning, news had filtered through that London was being hit by bomb blasts, and the British premier Tony Blair left the meeting for that city to take charge. 

By Saturday it became clear the damage was greater than originally announced, with the death toll crossing 50, and more than 20 still trapped or dead in the bombed underground tunnel between Russel’s Square and Kings’ Cross stations.

The bombs in London overshadowed the G8 Summit, bringing again the message that nowhere seems to be safe from terrorism. 

Alongside the resolve that those responsible shall be caught and that security must be tightened further, came the renewed call that the root causes of terrorism must be addressed.

These require measures such as ending poverty and despair in the Third World countries, achieving peace particularly in the Middle East, ending occupation and foreign control (especially in Iraq, Palestine, Afghanistan), assisting and allowing developing countries to have the policy space to develop.

By last weekend, analysts and citizen groups were poring over the results of the G8 Summit, to see how far the decisions contribute to addressing the world’s problems.

The verdict is mixed.   The Make Poverty History campaign of citizens had put a challenge to the G8:  increase aid, eliminate poor countries’ debts and establish just trade rules.

Tony Blair put African development and climate change at the top of his own agenda.  

The G8 communique and related documents showed some progress in a few areas, but a distinct lack of progress or failure in others.

On aid, the G8 announced an increase of US$48 billion in additional annual aid (as compared to the 2004 level), starting in 2010.    

Bob Geldof, the pop star in the forefront of Live Eight and the aid campaign, was euphoric, giving the G8 “ten marks out of ten” for aid.

However, experts in development groups analysed the figures and found that the real increase was only $20 billion, with the rest being the repackaging and recycling of aid already committed.

Nevertheless, it is a significant step forward in quantum. Having that aid further increased in quantity but especially in quality (in the way it is used) is important.

On debt, the G8 leaders confirmed what their Finance Ministers had agreed to last month.  The debts of 18 countries to the World Bank and IMF would be cancelled, with another nine countries becoming eligible in the next year or two.

Debt campaign groups have concluded that this is a start, but not enough.  First, there are another 70 or so countries that also require debt cancellation or relief, that are left out.

Second, the debts cancelled are only partial, as commercial debts are not covered.  Third, to be eligible, countries have to follow policy conditions, many of which are detrimental to their own development.   These weaknesses should now be addressed.

On trade, the verdict of most development groups is that the G8 did badly.  They did not come up with any new commitments to end agricultural subsidies (merely repeating general statements already made before), nor to open up their markets in a meaningful way to the developing countries.

Worse, they seem intent to continue the policy of opening up developing countries’ markets. 

The G8 statement did mention that least developed countries should have “appropriate flexibility” in the trade negotiations, so that they can decide on their economic reforms.  But the term “least developed countries” only covers the poorest countries, thus excluding a majority of developing countries which (like India) also have many poor people.

At the World Trade Organisation, the G8 countries are pursuing an aggressive campaign to open the developing countries’ agricultural, industrial and services sectors, which can cause dislocation and damage to the local economies.

Unless the G8 changes course on trade, the gains to developing countries in aid and debt will be be offset or wiped out by the G8’s damaging trade policies 

Climate change was the other area of greatest disappointment.  With the US adamant against joining any targets to cut emissions of Greenhouse gases, there was an attempt to get it to at least admit that there is a climate crisis and that human activity is at least partly responsible.

In the end, President Bush agreed to vague language to that effect.   The new action is that meetings will be held that would include G8 countries as well as “major emerging economies” such as India and China to discuss the way ahead, including exchange of technology for clean energy and emission reduction.

Blair claimed that this was a step forward, as it would involve the US as well as key energy-using developing countries, which is needed if an international agreement is to be eventually obtained.

However, climate scientists and environmental groups saw the G8 as failing, since the meeting could not even agree on the parameters of the problem (such as that a 2 degree increase in temperature is the crisis point, and that carbon dioxide content in the atmosphere beyond 400 parts per million would trigger that temperature rise), let alone agree on concrete action. 

As the crisis is imminent, and the time to begin tackling it is long past, the G8 failure to agree on emission-reduction targets and timetables is a great opportunity lost.

The communiqué only says that the G8 will act to stop and reverse the growth of greenhouse gases as “science justifies.”  This allows the US to refuse to act until it decides the science is conclusive.

“It’s a disappointing failure,” said Lord May, president of the Royal Society.  “Make no mistake, the science already justifies reversing, not merely slowing, the global growth of greenhouse gas emissions.” 

Environmental groups are now calling on Blair to get countries other than the US to move ahead on climate-related action as a follow up to the G8 Summit.

In fact, Blair does have the opportunity, being in charge of the Presidency of both the G8 and the European Union, to press ahead with changes in policy on aid, debt, trade, climate change, after the G8 Summit.

Many have blamed him for taking the UK to war in Iraq, and in the aftermath of the London bombings, some voices are heard that this tragedy would not have happened if the UK had not joined the US in invading Iraq.

It is said that Blair does not want history to remember his premiership mainly for the fiasco of the Iraq war.  Whether he can make use of the rest of his G8 and EU presidency for development and climate remains to be seen.