It’s not the Marshall Plan, but it’s a start
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The last time London held the Olympic Games was in 1948, the year that Harry Truman revealed the Marshall Plan for the reconstruction of post-war Europe. 2005, we were told, would be another double whammy: London would get the games, the G8 would agree a new Marshall Plan for Africa. In the end, we got one out of two. Whatever could be said about last week’s agreement at Gleneagles, it was not a Marshall Plan Mark II. That’s not to say the deal was insignificant. By G8 standards, it was far and away the most comprehensive package that has been delivered since the power of protest forced Africa on to the agenda in Birmingham seven years ago. It was also the most that was ever likely to be achieved in the circumstances. Africa in 2005 is not Europe in 1948: there is no immediate geopolitical threat to the west from communism, even though it could be argued that extreme poverty contains the seeds of a long-term threat to global stability. The countries that make up the G8 are hard up and have their own economic concerns; they had to be dragged, if not kicking and screaming, certainly with great reluctance, to the negotiating table. Even the last-minute concessions by Germany and Japan that broke the deadlock on Friday had a lot more to do with power politics than with concern for Africa; both Berlin and Tokyo are angling for permanent seats on the UN security council. In our dreams, we could all have come up with a perfect Gleneagles communique. On aid, it would have noted that every country in the west spends more - in many cases, much more - on defence than it does on aid. There would have been a shamefaced admission that any of the generosity being boasted of now is in marked contrast to the record of the past 15 years, when the G8 has increased aid to Africa by the princely sum of $3 a head while per capita incomes have risen by almost $6,000 (£3,450) a head. Under the terms of the Gleneagles deal, Britain, Germany, France and Italy have set timetables for hitting the target set by the United Nations for giving 0.7% of national income in aid. This was originally set in 1970 and will - unless the commitment is again reneged on - be achieved between 2012 and 2015, a mere 45 years too late. But at least the European donors have set themselves a target; Japan, the United States and Canada have not even done that. Given that it is the only G8 country running a budget surplus, Canada’s foot-dragging is particularly blameworthy. As far as debt is concerned, there is still plenty of unfinished business. Many of the countries that qualify for a write-off under the heavily indebted poor country initiative (HIPC) are in a less parlous state than those that do not. Kenya, for example, is not an HIPC country but has a stronger case for debt relief than Mozambique. There should be a new and expanded HIPC agreement under which debt sustainability is measured in terms of government revenues. On trade, our fantasy communique would have gone beyond a vague commitment to phase out export subsidies and got to grips with the wider question of the financial support that distorts production. Export subsidies form only a small part of the overall package for agriculture in the US and the EU, and the wrangling over whether they should be phased out by 2010, 2012 or 2015 is the equivalent of angels dancing on pin heads. In a sense, the most encouraging part of the Gleneagles deal was not the debt relief package (which will be worth around $1.5bn) or the new aid money (worth perhaps an extra $20bn over and above what was already in the pipeline) but the tacit acceptance that the conditions imposed on African countries in the past have been both onerous and counterproductive. “It is up to developing countries themselves and their governments to take the lead on development. They need to decide, plan and sequence their economic policies to fit with their own development strategies, for which they should be accountable to all their people.” This was an important concession by the G8 and they should use their voting power at the International Monetary Fund and the World Bank to ensure that it translates into action on the ground in individual African countries. The one condition that should be put on aid and debt relief is that national governments should report to their own populations each year on exactly how the money has been spent. Was there ever a chance that the G8 would agree to the sort of package adumbrated above? The blunt answer is no and it is somewhat naive to have imagined that it would. Most of the heavy lifting on aid and debt had already been achieved by the G8 finance ministers at their meeting in London last month, and last week’s summit was more about preventing heads of government from backsliding than it was about securing new commitments. |