Debt Relief

Blair and Brown cannot afford to fail

Both Tony Blair and Gordon Brown have taken a big political risk in setting an ambitious programme on Africa – and will certainly struggle to disguise any failure to make progress in 2005.

Most governments that hold the presidency of the Group of Eight nations opt for relatively small targets, in order to claim victory. But in focusing on Africa, the government has put itself squarely in the firing line, raising public expectations that credible action will finally be taken to address Africa’s continuing problems.

Yet the policies that Britain is putting forward are not in themselves radical or innovative. Blair himself remarked last week that he saw no need for the world to unveil new initiatives in 2005, but that there had to be progress in several areas: doubling aid flows, completing the debt relief process, tackling protectionism, fighting corruption and resolving conflicts.

In particular, there are three issues which the government has pledged itself to push hard for during its presidency this year of both the G8 and the European Union.

On aid, Britain argues that a large surge is required if there is to be any chance of meeting the millennium development goals (MDGs), agreed under the auspices of the UN by 2015.

Britain wants its fellow members of the G8, with other wealthy countries, to sign up to annual contributions equivalent to 0.7% of national income in aid.

Brown, in particular, wants to significantly increase the flow of aid through a proposed international finance facility (IFF), which bundles up several years’ worth of future aid commitments – in effect mortgaging government spending – in exchange for a formidable up-front sum.

On debt, Britain argues that individual developed countries should assume and pay for a share of the debts owed to international financial institutions, such as the International Monetary Fund and the World Bank, as well as forgiving any debts owed directly by sub-Saharan countries. Brown has already announced that Britain will pay off 10% of the debts owed to the institutions, as well as forgiving the debts owed to it by Mozambique and several other countries.

Aid and debt will be debated by the G7 finance ministers this week, ahead of the G8 meeting in Gleneagles in July. The early indications are that Britain is making some headway in winning its peers over, having got its European colleagues on board for the IFF, along with fleeting signs of support from the US administration for the plan.

On trade – arguably the most critical issue of all – the British government is forced to leave most of the running to the European Union, in particular the trade commissioner Peter Mandelson. Behind the scenes the British are trying to help prepare the ground for the Hong Kong summit in December. There one key resolution should be the final declaration of a date for the EU to end export subsidies – long promised and long expected.

Overall, judging whether 2005 is a success or failure will not be easy. The table below [please go to:,5860,1401074,00.html] is a snapshot of some of the goals set by the British government for this year, as well as targets set by UN bodies and non-governmental organisations to meet the MDGs. It is not comprehensive, but it incorporates many issues likely to be discussed in the corridors of power this year, with an estimate of the chance of each problem beingresolved.

What is not up for debate are criticisms from campaigners of how western governments, including the British, continue to tie their aid or impose strict conditions that insist on liberalisation and privatisation.

Mail & Guardian, February 2, 2005

Categories: Debt Relief, Odious Debts

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