Civil society urges G8 to focus on true global priorities

President Bush’s G-8 summit belittles true global priorities, claims an Africa Action report.

From June 8-10, 2004, the leaders of the world’s seven wealthiest countries plus Russia will gather on Sea Island in Georgia. The “Group of Eight” leaders will be secluded from alternative educational events and protests in nearby Brunswick in mainland Georgia – and guarded by security forces, and a marsh full of alligators and quicksand. At this meeting, US President George W. Bush will lead private discussions on the key issues identified by this elite club of rich country leaders – but these are unlikely to reflect TRUE global priorities.

The main items that President Bush will likely propose for discussion include the “War on Terror,” the reconstruction of Iraq, the Greater Middle East Initiative, and global economic growth. G-8 leaders may also discuss issues such as those that arose at the May 22nd-23rd meeting of the G-7 Finance Ministers, including an assessment of the IMF/World Bank at 60 Years and debt cancellation.

While the US and G-8 leaders define their most urgent international priorities, the reality is that these are the pre-occupations of a global minority. The majority of people in the rest of the world are more concerned with more immediate threats to human security, such as HIV/AIDS and poverty. This difference between a global minority and the global majority reveals a system of global apartheid, where the elites in rich and powerful countries control the major global decision-making bodies and preserve an economic system that favors their own interests at the expense of the majority of the world. This is the context that frames the upcoming G-8 meeting.

While some African leaders will be invited to attend the summit, as has become tradition, their presence is unlikely to prompt real action on key African issues. Instead, President Bush is leading the G-8 to set an agenda that addresses safeguards the G-8’s own interests at the expense of global peace and security.

Civil society – both in the US and abroad – challenge the legitimacy of this self-appointed body and call on the G-8 to take action on the true global priorities and recognize its responsibility to the global majority.

**G-8 members must instruct the IMF and World Bank to cancel 100% of the debts of all impoverished nations using the institutions’ existing reserves and resources. G-8 leaders have failed to meet their own commitments on debt cancellation for impoverished countries and have claimed that Iraq’s debt must be cancelled, while refusing to recognize the odious debts of African, Asian & Latin American countries.

**HIV/AIDS, the greatest global threat to human security, should appear at the top of the G-8 agenda. The G-8 must commit to fully funding the Global Fund to Fight AIDS, Tuberculosis, and Malaria and must make it the principal vehicle for financing the war on AIDS. The G8 must also ensure adequate resources are available to implement the World Health Organization’s 3 x 5 plan with generic medicines.

**The strategic review of the World Bank and International Monetary Fund on the G-8 meeting agenda is a stalling tactic. For example, the evidence to support the termination of the Structural Adjustment Program has already been internally documented, yet the institutions continue to push their failed programs and resist doing their fair share of debt cancellation. The only reasonable option left to the G-8 is to radically transform these institutions by ending their practice of pushing loans and grants heavy with conditions that hinder pro-poor growth, and by providing 100% debt cancellation from these institutions’ own resources. The G-8 members together control 46% of the votes in the World Bank and 48% of the votes in the IMF.

**The contested “Washington Consensus” on privatization and “free trade” must be abandoned by the G-8. By simply lowering trade barriers, countries in the developing world have not experienced the economic growth necessary to alleviate poverty.

The following talking points offer further analysis on these key issues:

The G-8 Fails on Debt

**G-8 leaders have failed to meet their own commitments on debt cancellation for impoverished nations. Barely half of the $100 billion in debt relief promised at the Cologne G-8 Summit in 1999 has become reality. While bilateral debts have been largely cancelled, debt owed to the IMF and World Bank continues to drain impoverished nations of resources desperately needed to fight AIDS and poverty. The IMF and World Bank’s debt relief scheme, the Heavily Indebted Poor Countries Initiative (HIPC), has provided debt relief too slowly, for too few countries and with too many harmful conditions. G-8 members must direct the IMF and World Bank to enact 100% debt cancellation for impoverished nations using the institutions’ existing reserves and resources.

**As G-8 leaders address the reconstruction of Iraq, proposals by James Baker to relieve Iraq’s odious debt have fallen short. The commitments made so far will actually increase the value of Iraq’s debt and will still leave Iraq paying more – roughly $5 billion per year – for their own oppression than prior to Mr. Baker’s efforts. This is because Iraq is not currently paying on its debt bill. Rather than forcing the country to repay, Iraq’s debt, clearly odious, must be cancelled outright. The Bush Administration reveals a double standard by claiming that Iraq’s debt must be cancelled, while refusing to apply the same criteria to odious debts of African, Asian, and Latin American countries’ debts.

**Leaders are ignoring a vital source of resources to fight the AIDS pandemic that is ravaging Africa and other regions. In the midst of the AIDS pandemic, African nations are spending $15 billion/year in debt service payments. Meanwhile, the United Nations estimates that $10 billion per year is needed on the continent to fight the pandemic. The debts of impoverished nations must be cancelled to fight AIDS.

G-8 Neglects AIDS and Africa

**The G-8 is undermining the World Health Organization’s (WHO) “3 x 5” plan to treat 3 million people with HIV/AIDS by 2005. The success of the plan is contingent upon procuring anti-retrovirals and other essential medicines, including fixed-dose combinations (FDCs), at the lowest possible cost in order to serve the largest number of people. The pharmaceutical industry, concentrated in the US and other G-8 countries, is actively campaigning through G-8 leadership to block the bulk purchase of these drugs and to prevent their use generally.

**Though HIV/AIDS is the greatest threat to human security, and Africa is “ground zero” of the global HIV/AIDS pandemic, both AIDS and Africa will receive insufficient attention on the G-8 agenda. The HIV/AIDS pandemic is the worst health crisis in human history. Defeating HIV/AIDS at its epicenter in Africa must be a top priority of the G-8 governments.

**The Global Fund to Fight AIDS, Tuberculosis, and Malaria, founded with the blessing of G-8 countries, has been under-funded by the very same rich countries. The Fund pools donor resources and directs this money to effective HIV/AIDS programs designed by those people most affected in African countries and elsewhere. It is the most effective vehicle to fund the war against AIDS, when it has the necessary money. The Bush Administration has further destabilized the Fund by launching its own bilateral funding mechanism, the President’s Emergency Plan for AIDS Relief (PEPFAR). The G8 countries must fully fund the Global Fund and make it the principal vehicle for financing the war on AIDS.

The G-8’s Ineffective World Bank/IMF Strategic Review

**G-7 Finance Ministers indicated in their May 23rd statement that on their 60th Anniversary year, the World Bank and IMF must reform themselves. The G-8 must take the opportunity of the institutions’ 60th year to look more closely at the ongoing negative impact of these institutions on human development. Over the last two years, the World Bank has greatly accelerated its pressure on impoverished countries to privatize government-owned entities, now extending to the most basic services, such as clean water, healthcare, and education. The G-8 should examine the Bank’s claims that private sector involvement makes provision of basic services more efficient.

**After a well-documented 25-year history, Structural Adjustment Programs have not succeeded in ending any client country’s debt problems; they have stagnated economic growth, and led to the wholesale violation of democracy in developing countries. In their May 23rd statement, G-7 Finance Ministers have admitted that reforms of the World Bank and IMF need to be broadened. The G-8 needs to undertake a serious assessment of the costs of structural adjustment programs and related policies.

** The World Bank is not responsive to critical review. In December 2003, the Extractive Industries Review (EIR), an independent report commissioned by the World Bank in 2000 on the impact of the Bank’s extractive industries (mining, petroleum) to poverty alleviation, was released. The EIR found that the extractive industries financed by the World Bank do not contribute to poverty reduction and should be phased out. The World Bank has delayed announcing whether it will accept the recommendations, but a draft response indicated that most would be rejected. The G-8 should insist that the World Bank demonstrate accountability by adhering to the recommendations of the report it requested.

The G-8’s Caustic Consensus on Trade

***While the G-8 pushes an “Agenda for Growth” for rich nations, they are undermining growth in the rest of the world. The G-8 claims that trade liberalization is critical for improving the world economy. Yet the last 25 years of so-called “Washington consensus” economic reforms of opening up global South economies to trade and investment while privatizing many government services has not succeeded.

**The record of global South countries on economic growth indicates that the “Washington Consensus” policies have been a dismal failure; they have actually succeeded in exacerbating poverty throughout the developing world. Latin America stands out as a region that has both most aggressively embraced these trade liberalization and privatization policies while experiencing the worst long-term economic failure (as measured by per capita income growth) in more than a century.

** While members of the G-8 have begun to re-examine their sizeable agricultural subsidies and are entering into dialogues about increased market access for poorer countries, improving the livelihoods of people in the rest of the world will not occur simply through trade liberalization and the “success” of the Doha Round. Countries in the global South must be given the political and economic space to be able to formulate national development strategies specific to their internal economic conditions, rather than be forced to comply with rigid economic models that have not been proven to work.

Africa Action,, June 2, 2004

Categories: Africa, Debt Relief, Odious Debts

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