The G-8 Summit: Political Will Lacking to Eliminate African Poverty

Barbara Kohnen

Since 1975, the Group of 8 (G8) Summit has been the principal forum for the leaders of the major industrial democracies to discuss the significant economic and political issues facing their nations, most often security, trade, and growth. But in the last five years, in large part due to citizen action, the G8 leaders have also put the concerns of poor countries on their agenda. Debt relief has been a key topic since 1999—so much so, in fact, that today’s G8 leaders are now conversant in the technical jargon of debt relief. Thus it is unfortunate that after so much analysis and so many discussions, this year’s G8 Summit was mostly talk and no action.

There were opportunities to make financial commitments to support meaningful debt relief, prevention and treatment of HIV/AIDS, even to address unfair trade practices that keep Africa from thriving. There were also opportunities to support the blueprints for development that were crafted by African leaders themselves. But the absence of a concrete action plan indicates that the political will on the part of the G8, and especially the U.S., to improve the situation of the poorest continent in the world is simply not there.

A NEW PARTNERSHIP WITH AFRICA?

This year, the leaders of the G8 countries–United States, United Kingdom, Canada, France, Germany, Italy, Japan, and Russia—invited the Presidents of South Africa, Nigeria, Senegal, and Algeria to join them to discuss the New Economic Partnership for Africa’s Development (NEPAD), an innovative plan drawn up by African leaders that would allow them to set their own goals for development and then monitor their own progress. But the G8 leaders carefully avoided the issues that the Africans most wanted to focus on: debt relief, large-scale investment in infrastructure, unfair trade practices, and HIV/AIDS.

No More Debt Relief. The G8 leaders discussed the Heavily Indebted Poor Country (HIPC) initiative in depth. They noted that the initiative provides only limited relief and that outside events, such as the recent collapse of export commodity prices, cause even more indebtedness in fragile economies. The G8 affirmed the need for all creditors to contribute to the initiative and called for better monitoring and reporting. They even promised to fill a $1 billion shortfall in funding. But they did not offer the financial resources that would allow an expansion of the initiative to more of the fifty-plus countries that still need debt relief. To date, only six countries have received the full amount of relief available under the HIPC initiative, and that amount is still not enough to make a real difference. At this rate, the HIPC initiative will remain a weak response to the debt crisis.

Not Enough Aid. Prior to the G8 meeting, the World Bank had estimated that $40 billion-$60 billion a year was required to provide food, shelter, clean water, and primary education for all of Africa, while African leaders estimated they needed $64 billion per year to meet these goals and to invest in infrastructure that would stimulate economic growth. The African leaders offered to provide some of this money themselves, noting that the rest would have to come from investment, aid, and exports. But the rich nations together promised only $6 billion, less than one-tenth of the requested amount, and the U.S. earmarked its $200 million contribution for education only. TheG8 leaders spent their time instead discussing how African nations could improve governance, respect human rights, abide by the rule of law, initiate private investment, improve women’s lives, and resolve conflict. These concerns, while very important, were supposed to be worked out by the African leaders in consultation with civil society in their countries, not by the G8 leaders. In fact, the aspect of NEPAD that was considered groundbreaking was that it would make the governments of Africa responsible for assessing one another’s commitment to democracy and development. The G8 undermined the Africans’ efforts in this area.

Unfair trade practices will continue. The G8 leaders said that the answer to Africa’s financial needs is not merely aid, but also trade and investment. They promised to provide more trade-related technical assistance to help African countries benefit from global trade (particularly through U.S. and European consulting firms). And the G8 promised to facilitate the financing of private investment through their own export credit agencies, which are notorious examples of corporate welfare. (See www.environmentaldefense.org for more on this topic.)

But the G8 would not discuss the fact that record-high agricultural subsidies in the U.S. and Europe drive down the price of agricultural products worldwide, making it impossible for African farmers to export competitively or even to compete in their own markets. The new U.S. Farm Bill will provide $15 billion per year to U.S. farmers, while the European Union provides its farmers even more—$43 billion a year. Even worse, the U.S. and its G7 partners (all but Russia) work actively in other venues such as the World Trade Organization to prevent developing countries from subsidizing their own industries, thus ensuring that Africa’s new industries will never take off.

No new money for HIV/AIDS. Again, the G8 leaders discussed AIDS prevention and treatment as well as the need to support the Global Fund for AIDS, Tuberculosis, and Malaria (known as the Global ATM), but they did not provide any additional resources. Instead, they agreed to report on the Global Fund’s progress at next year’s G8 Summit in France. President Bush recently learned that HIV/AIDs can be transmitted from mothers to infants, and just before leaving for the G8 Summit, he announced that he would put $500 million into the International Mother and Child HIV Prevention Initiative. He said the program would reach one million women each year, reduce mother to infant transmission by forty percent, and improve health care delivery in Africa and the Caribbean.

What was not mentioned was that $200 million of the $500 million had already been approved by Congress in an unrelated emergency spending bill. The remaining $300 million would be spread out over three years and might even be taken from other development assistance programs. In addition, the Administration had tried to undermine bipartisan efforts in the Senate to allocate more than twice as much money to the Global ATM Fund.

IS THERE HOPE FOR AFRICA IN THE BUSH ADMINISTRATION?

The Bush Administration appears interested in Africa, at least to identify the major problems and opportunities. Treasury Secretary Paul O’Neill visited four countries in Africa with the rock singer Bono in May, and President Bush is planning a trip to Africa next year. On his visit, Secretary O’Neill said he was struck by the devastating levels of poverty and HIV/AIDS, and the impact of the debt. He repeated these observations and commented on the need for meaningful debt relief in testimony that he delivered on June 27 to the House International Relations Committee—the same day that President Bush was discussing debt relief at the G8 Summit. Secretary O’Neill said: 

Debt relief is in many cases an absolute necessity [for Africa]–just to square ourselves with reality . . . I think if we’re going to do the right thing, we must move in the directions that President Bush has suggested; for example, by stopping the fiction of being party to making loans to countries that could never possibly pay them back. If you can’t pay, the idea of debt is an absurdity on its face. In the corporate world, if you can’t pay and don’t pay . . . you would write it off.

Unfortunately, Secretary O’Neill’s words have not yet been translated into an effective response by the U.S. government. We now know that HIV/AIDs kills more than two million people in Africa every year, a figure that is projected to double in five years. By the year 2020, more than twenty five percent of the work force may be lost to AIDS in severely affected countries; already it has practically destroyed the managerial sector in many African countries. The growth rate in sub-Saharan Africa has fallen as much as four percent because of AIDS. If the Administration knows that the HIV/AIDS crisis is a matter of national security, why is it limiting its focus to preventing mother-to-infant transmission? And why is it not taking more effective steps to eliminate the debt payments that African governments must make instead of using that scarce money to deal with their health and economic crises? Absent a real response to the HIV/AIDS crisis, there is no hope for development in Africa. President Bush has called for more development assistance that is effectively targeted and that produces results. He called for a Millennium Challenge Account to provide up to $10 billion by 2006 and an extra $5 billion a year thereafter to countries that “govern justly, invest in their own people and promote economic freedom.” And the Administration also negotiated with fellow donor nations to convert about one-fifth of the loans that the World Bank makes to poor countries to grants. These sound like steps in the right direction, but critical questions remain. Who will decide whether a country governs justly? And based on what criteria? Is “economic freedom” code language for market reforms that leave poor people with fewer opportunities? On the face of it, it seems that the Administration is creating a special fund to reward developing countries that further the U.S.’s economic agenda in the world. Finally, President Bush began his Administration with the clear intention of staying out of other countries’ affairs. September 11 and the current crisis in the Middle East have forced a change. But why does the Administration insist on interfering in the internal affairs of African nations, who are themselves working out how to improve governance and eliminate corruption?

The Administration clearly lacks the will, or possibly the ability, to tackle the difficult problems of debt, HIV/AIDS, and economic growth in Africa. But other policymakers are asking the critical questions. Consider the statement of Representative Tom Lantos (D-CA) also at the June 27 hearing of the House International Relations Committee:

It is simply utterly irrational to anticipate some of the poorest countries on the face of this planet, which are at present unable to provide clean water, minimal health care, minimal primary education to their tens of millions of children, to seriously contemplate repaying tens of billions of dollars in debt.

This statement is a welcome reminder that some lawmakers are concerned about the world’s poor.

Barbara Kohnen served as Director of the Rethinking Bretton Woods Project at the Center of Concern.Reprinted from the Center of Concern’s quarterly newsletter, CENTER FOCUS, Issue # 157, September 2002. This and other Center of Concern articles may be viewed at www.coc.org

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