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The 2009 G8: what has been achieved on development and finance?

13 July 2009

In the run-up to this year’s G8 meeting in L’Aquila, Italy, the media was full of criticism of Silvio Berlusconi and his officials. But in the end the summit produced some announcements on food security, climate change, financial regulation and financing for development. There are a few new elements but much reaffirmation of previous promises that have not yet been kept. Eurodad member CAFOD has produced an excellent run-down of the 2009 G8 communiqué, pointing out that they “contained a lot of good intentions and insufficient concrete statements”. Another member CRBM in Italy concludes that the “G8 has failed to achieve the goals it set itself”, contending that the G8 has become “obsolete”.

Food security funding, but no action on speculation

A food security package worth $20 billion over three years was announced. The money is probably not all new, although the source has not been fully clarified. The initiative is to be funded by G8 countries and international organizations, including the World Bank. The new money for agricultural development is designed to advance the fight against hunger, according to officials. The food security part of the G8 communiqué points out that “While the prices of food commodities have decreased since their peak of 2008, they remain high in historical terms and volatile”. However the G8’s solutions rest on liberalizing trade and announcing some extra money. This sentence is key: “markets must remain open, protectionism rejected and factors potentially affecting commodity price volatility, including speculation, monitored and analysed further”. Notice how vague is the language on speculation compared to the part on open markets.

As for the $20 billion funding it has announced, the G8 initiative will “partner with vulnerable countries and regions to help them develop and implement their own food security strategies, and together substantially increase sustained commitments of financial and technical assistance to invest in those strategies”. This is supposed to be done via “effective coordination, support for country-owned processes and plans as well as by the use of multilateral institutions whenever appropriate”.
Angela Wauye, food rights coordinator at ActionAid Kenya commented that: “the G8 is failing over one billion hungry people". ActionAid calculates that some US$23 billion per year are needed to meet the MDG goals of halving hunger by 2015.

Aid promises repeated, whole country approach endorsed

Many NGOs slammed the government of Italy for completely failing to live up to its promises from the 2005 G8 summit to double aid to Africa by 2010. Instead Italy halved its aid level (from a low base) in the months leading up to the summit. Meles Zenawi, Ethiopian prime minister, was widely quoted in the media saying "the key message for us is to ask the G8 to live up to their commitments." Anticipating such criticism the G8 has released a “G8 Preliminary Accountability Report”. This covers follow up of previous commitments on food security, water, health and education. It is good that such a report is being produced, as it highlights certain statistics and official insights. But is it to be trusted? Several NGOs think not, saying that its figures are partial and selective. ActionAid UK called the report an “accountability sham”, pointing out that the report avoids talking about the $15 billion shortfall in the pledge made four years ago to double aid to Africa.

In this year’s communiqué the G8 leaders simply “reiterate[d] the importance of fulfilling our commitments to increase aid made at Gleneagles”, adding no detail on who would do what when to get on track with this increasingly unlikely goal. Although the USA, Japan, Canada, Germany and the UK may meet their targets, their progress is being held back by France and Italy, which are reducing rather than increasing their ODA.

The government of Italy has been trying to move political discussion away from aid targets and towards a more comprehensive assessment of countries’ contribution to development. This “whole of country” approach to development finds its way into the G8 communiqué. It reads “we will work with partner countries to maximize the impact of investment, trade, debt relief and sustainable debt financing, microfinance, remittances, domestic resources of partner countries, as well as development assistance, with a view to diversifying the mix of available financial resources and gradually reducing aid-dependency”.

The OECD is tasked with reporting to the 2010 G8 on “the feasibility and relevance of a new assessment tool designed to fully comprehend the various contributions to the sustainable development of partner countries”. This would cover “a wide range of factors such as government aid and non-aid policies, private sector and civil society efforts”. Two paragraphs later the issue of tax evasion and illicit capital flight is mentioned (“we will continue to support partner countries’ efforts to increase domestic revenues through modernized tax and customs regulations, improved revenue collection capacities and effective fight against tax evasion, illegal financial flows and corruption. We will enhance cooperation on financial transparency and tax information exchange”. But it does not appear that such outflows will be part of the whole of country analysis, as Eurodad has suggested (LINK) since the idea was first mooted in early 2009.

Climate change: long-term target, no baseline

On climate change the only targets agreed at this summit are for 2050, aeons away in political time. Among many others UN Secretary General Bank Ki-Moon criticised the lack of interim 2020 targets. The G8 communiqué also contains another worrying fudge, with the baseline left ambiguous. It states "we also support a goal of developed countries reducing emissions of greenhouse gases in aggregate by 80 per cent or more by 2050 compared to 1990 or more recent years." The Independent environment editor Michael McArthy points out that “those last four words, put in to keep all parties happy, in effect render the commitment so imprecise as to be meaningless”. This because emissions have risen rapidly since 1990, especially in the USA.
Economic and financial regulation, Lecce framework.

On the question of improving regulation to prevent further financial crises G8 leaders went no further than what was agreed at the meeting of their finance ministers in Lecce one month ago. The record that “to ensure the effectiveness of the Lecce Framework, we will make every effort to pursue maximum country participation and swift and resolute implementation. We are committed to working with our international partners to make progress, with a view to reaching out to broader fora, including the G-20 and beyond”. Practically speaking the World Bank, IMF, WTO, ILO and OECD are invited to “enhance their cooperation and improve coherence”. No easy task, and one that has not been given a significant boost in L’Aquila.

Conclusion: was the G8 worthwhile?

Financially speaking a shocking comparison was provided by Flavio Lotti, national coordinator of the Peace Round Table. He commented that in 2009 “Italy spent €400m on G8 summit, €321m on international aid”. Clearly the G8 claims that this money is an investment that will result in improvements in the quantity and quality of policies and spending that will benefit millions of people worldwide.

But in a year with multiple summits the G8 has produced very little new that will make a big difference, and its record in implementing its pledges is not at all impressive.
Consider the views of two senior journalists from different ends of the political spectrum. Simon Johnson in The New Republic writes : “today, honestly, what's the point? The L'Aquila summit seems likely to achieve nothing that could not have been agreed upon in a conference call among deputy ministers. Just because there's a communiqué does not mean it has any real content”. He says the G8 has faded because emerging markets have risen in power, “the idea that the U.S. and its allies "lead" by any kind of economic policy example is plainly in disarray” and the Europeans should organise better at the European Union level before getting involved in global ones. He concludes: “the G7 is still a useful forum for senior staff meetings on some technical issues, but it would be much more appropriate and effective for the high profile pinnacle organization to be the G20, not the G7.”

Quentin Peel, writing in the Financial Times, appears to agree. He wrote “the annual G8 summit, which is supposed to be an informally organised ‘fireside chat’ of world leaders from the wealthiest nations, has swollen into a monstrous gathering of literally thousands of officials and security staff and spin-doctors, not to mention the media circus that follows them. They produce vast communiqués but little substance. Moreover, in the wake of the global financial and economic crisis, its place as the key forum for debate on the world economy has been seized by the rival G20”. Peel wondered whether in L’Aquila Silvio Berlusconi has just presided over “the last great extravaganza of an obsolescent organisation”.

G8 communiqué and other official documents

Main communiqué Responsible leadership for a sustainable future

Other development and finance related documents:

• Joint Declaration "Promoting the global agenda";

• Declaration of the Major Economies Forum on Energy and Climate;

• Joint G8-Africa Statement ("A stronger G8-Africa Partnership on Water and Sanitation");

• Joint Statement on Global Food Security - "L’Aquila Food Security Initiative" (AFSI).

Eurodad member outputs on the G8

Vision du Monde article (in French) Vision du monde dénonce une grave affaire d'escroquerie

CNCD article (in French) G8 : inverser la vapeur pour le climat!

Oxfam France press release (in french) Le G8 tiendra-t-il ses promesses avant de disparaître?