First of all there is this topline figure that they have given of $50 billion in aid by 2010. The thing to do is to compare that with the scale of the problem and what was needed.
The governments of the world signed up to the Millennium Development Goals (MDGs), which are in themselves a half way point, for example halving the number of people living in absolute poverty.
To achieve the MDGs the United Nations (UN) predicted that we needed an additional $50 billion per year, starting now.
So on the face of it the leaders of the G8 have offered $50 billion by 2010 which means essentially that they have produced a plan to fail the MDGs. So the plan is obviously too little too late.
In any case when you look behind the figures it’s a bit confusing as to what exactly the G8 summit achieved in terms of new commitments.
A number of the commitments that they were talking about were ones they had agreed last year. So they have repackaged a number of old commitments with a few new ones to come up with this figure of $50 billion. We think that approximately $35 billion is what we would call old money.
On the issue of aid and debt conditionality there is one possible crumb of comfort which is that the communiqué says that developing countries should be free to develop, plan and influence their own economic policy in a way that’s accountable to their people.
But one way to read that is to say that if you really believe that then you have to abolish all economic policy conditionality, and the World Bank, the IMF and your financial aid programme.
So, nice words but what are you doing? If this is to have any meaning then in the next couple of months we will see the abolition of economic policy conditions.
George Bush said during Blair’s visit to the US last month, “We’re really not interested in supporting a government that doesn’t have open economies and open markets. We expect there to be reciprocation.” That’s pretty clear.
If you look at past G8 statements they are routinely ignored.
On debt they re-announced the debt cancellation initiative that the G7 finance ministers proposed. That is that 18 countries immediately qualify for debt cancellation—this is the first time that they have agreed debt cancellation rather than debt sustainability.
That’s a positive step forward but there are some caveats to the proposal. Within the proposal another 20 countries are eligible, although it looks like only nine will get anywhere close.
What the countries have to do to qualify is reach the completion point in the Highly Indebted Poor Countries Initiative. In order to reach completion the countries have to comply with the economic policies of the World Bank and IMF.
That means privatisation, deregulation, trade liberalisation and so on, which end up doing more harm than good.
The sad irony of this whole debt relief process is that in order to get this debt cancellation to benefit the poor you have to implement policies which harm the poor.
On top of that there are at least another 20 countries who have been identified as needing immediate debt cancellation in order to reach the MDGs. And these countries are not eligible under this announcement.
This was supposedly going to address the issue of the multi-lateral debt crisis but it only deals with about 10 percent of the problem.
The final sting in the tail is that those countries that do qualify for debt cancellation will also face a reduction in aid—so that donor countries don’t end up giving significantly more money. In some ways it’s a reshuffling of money. But the most important thing is that the principle of debt cancellation has been agreed.
On trade there is simply nothing. There was no unilateral agreement saying that the G8 countries need to change their trade policies.
They were sending a very clear message that there is not a cat’s chance in hell that they will unilaterally change their trade policy. They are not going to change their trade policies without receiving something in return from the developing countries.
They have come out with rhetoric which we have heard in previous years, but they have still continued to push for measures that do not benefit the developing countries.
And again with climate change there are no significant moves. What was in 1998 the greatest threat to our world according to the G8 was last year reduced to a pressing issue. We have certainly been set back in the campaign to stop climate change.
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