Group of Eight and Poverty in Africa - Essay Example

G8 and Poverty in Africa The Group of Eight (G8) consists of Canada, France, Germany, Italy, Japan, the United Kingdom, the United s of America,and the Russian Federation. Altogether, those countries represent 66.5% of the world economy (source:www.undp.org). The hallmark of the G8 is an annual economic and political summit meeting of the heads of government with international officials, though there are numerous subsidiary meetings and policy research. The G8 is not supported by a transnational administration, unlike institutions such as the United Nations or World Bank. The presidency of the Group rotates among the member states annually. The G8 Summit has consistently dealt with macroeconomic management, international trade, and relations with developing countries. Questions of East-West economic relations, energy, and terrorism have also been of recurrent concern. From this initial foundation the summit agenda has broadened considerably to include microeconomic issues such as employment and the information highway, transnational issues such as the environment, crime and drugs, and a host of political-security issues ranging from human rights through regional security to arms control. According to UN estimates, poor countries need $45 per person per year in aid in order to have any chance of winning the fight against poverty and reaching the Millennium Development Goals. All four countries currently affected by the West Africa food crisis receive less than this. Mali receives $19 per head, Mauritania $20 and Burkina Faso $13. Africa's 48 countries have people who want for their children education, good health, security and opportunity. They want a voice, a chance to make a better life for them and respect for their human rights. It is a continent where even though some progress has been made, the fact remains that few, if any, of the Sub-Saharan African countries are likely to achieve the goal of reducing the proportion of those living in absolute poverty by half by 2015. Instead the number of the poor in the region is estimated to grow by 45 million over the next 12 years. The richest countries of the world, as represented by the G8, have a responsibility to help the poorest. This is not just charity, but a moral obligation. The world's wealthiest countries have emitted more than their fair share of greenhouse gases. Resultant floods, droughts and other climate change impacts continue to fall disproportionately on the world's poorest people and countries, many of which are in Africa. Finance Ministers from the Group of Eight industrialized nations have agreed to cancel at least $40 billion in debt owed by the world's 18 poorest nations (Cowell, 2005). Under the agreement, 18 countries - Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia, will receive immediate forgiveness for more than $40 billion they owe to the World Bank, African Development Bank and the International Monetary Fund (Blustein, 2005). The deal will save the initial 18 countries about $1.5 billion annually that they could use toward health care, education and poverty alleviation programs, according to British Chancellor of the Exchequer Gordon Brown. (New York Times, 2005). An additional nine African countries likely will qualify for debt forgiveness once they have satisfied IMF and World Bank requirements for good governance and sound economic policies. The agreement also requires G8 countries to compensate the World Bank and AFDB at a total cost of $16.7 billion, based on the payments the lenders would have received from the 18 countries between now and 2015. The debt-forgiveness cost to the IMF will be absorbed by the institution's already existing resources. The United States agreed to pay up to $1.75 billion to the lenders over the next decade, and the United Kingdom agreed to pay up to $960 million (New York Times, 2005). Germany will pay between $848 million and $1.2 billion to the World Bank and AFDB (Johnson, 2005). Other G8 countries made undisclosed pledges, and additional pledges are expected from World Bank and IMF members this year. The debt-forgiveness deal will allow countries to address health care, social issues and poverty eradication only if leaders agree to good governance and transparency, according to Brown. The $40 billion write-off, which came after years of campaigning by debt cancellation activists and months of negotiations among rich country policymakers, is substantive but modest compared to Africa's estimated total external debt of $300 billion. While celebrating the decision, many commentators and campaigners were quick to point out that the move was only a first step to provide countries with the chance to meet globally agreed minimum development goals. Although nine other countries might soon become eligible, as many as 40 more are still in need of similar action. Capital is needed to buy the plant and equipment that can add value to the raw materials before export. But most African governments cannot accumulate capital, because they lead a hand-to-mouth existence, due to the low and often fluctuating prices they are paid for their raw materials. This stranglehold held over them by the West is considered by knowledgeable Africans to be cruel and immoral. It is the principal cause of Africa's poverty. The real reason is that Africa has been involuntarily locked into an earnings logjam on the international market, which keeps it poor when it sells to others, and poor when it buys from them. Simultaneously, it has been swerved away, by the promise of foreign exchange, from producing food and goods for its own use. A report released by the British NGO, ActionAid, at the end of June 2005 talks of a survey of the past seven summits, which has demonstrated that when it comes to a range of issues that are critical for Africa's development, from debt to education and climate change to trade, the G8 has failed to match rhetoric with action. In Birmingham in 1998, G8 leaders pledged to extend debt relief to all 'Heavily Indebted Poor Countries' (HIPC) by 2000. They also committed to ensuring that all countries receive speedy relief when they qualify. Yet in 2005, of the $523bn owed by the world's poorest countries, just $48bn, or half of what's been pledged, has actually been cancelled. Twenty of the 42 HIPCs have yet to reach completion point where their debt gets cleared. According to Steve Tibbett, head of policy at ActionAid, the G8 has made grand statements on Africa for over a decade and in that time it has continually forced African countries to adopt policies to their detriment. "The G8 has cancelled only a fraction of poor countries' debts and has given less and lower quality aid. It is time for the G8 to show some remorse and take positive action." (Tibbett, 2005) In Okinawa (Japan) in 2000, G8 leaders promised to end the practice of tying their aid to purchases of goods and services from their own companies. Yet in 2005, over a fifth of all aid to Africa continues to be tied. The US and Italy have failed to report on the extent to which they tie their aid, while almost 50% of Canada's aid remains officially tied. On present trends, only half of Africa's population is likely to meet the education target of universal primary education, and 14 countries are falling further behind. Only 14 countries are likely to meet the target on maternal mortality reduction. Only nine countries will meet the target for access to safe water. Currently one quarter of the 1.1 billion people worldwide without access to portable water live in Africa. On present trends, AIDS, which has already infected 28 million Africans and is daily infecting 9,000 more will, if not reversed, affect over 50 million families more than the next 20 years. These challenges will only grow over the next 30 years, as sub-Saharan Africa's population increases by over 500 million to 1.1 billion people. The United States confirmed its commitment to Africa by promising close to $15 billion by 2006. A week before the summit, Bush pledged an additional $300 million in spending on HIV/AIDS, while also outlining a plan that would see U.S. aid to education in Africa double, with $200 million tagged over the next five years. He also announced that he would travel to Africa early next year. Yet critics contend that Bush and other G8 leaders should have committed still more money to Africa at the summit. At the continental level, there is new promise in the New Partnership for Africa's Development -- NEPAD. The agreement of African heads of states on NEPAD pointedly asserts African commitment to and responsibility for poverty eradication on the continent. There are other, more tangible, rays of hope in countries where once such progress would have been unimaginable: Mozambique, once devastated by war, is now among the most rapidly growing countries in Africa. Uganda, where the number of children in primary school has doubled, and where HIV/AIDS infection rates fell by 50% in less than five years. Ethiopia, where despite years of conflict, six million Ethiopians are now benefiting from better education and health services. Mauritius and Tanzania, where there has already been noteworthy success in promoting stronger private sectors and attracting foreign investment. At a time in the 1990s when most African leaders were putting better policies in place to achieve economic growth and poverty reduction and while rich countries prospered, foreign aid fell from 35 dollars a head to 19 dollars over the last 10 years. At a time in the 1990s when African countries were putting better policies in place, non-oil commodity prices fell by 33% for many African economies, wiping out millions of dollars from African economies. At a time in the 2000s when rich countries are beginning to recognize Africa's progress, agricultural subsidies in those same rich countries are on the rise, threatening much of Africa's exports and precipitating likely reciprocal actions across the globe. In order to better deal with the poverty issues in Africa, there must be a political commitment on the part of the G8 to a substantial proportion of the new resources going to Africa. Tom Okello argues further on these lines. Second, rich countries must focus on more and better trade. While aid has been at the centre of discussions among donors about Africa's, Africans themselves have been stressing trade. According to President Museveni, trade is crucial to Africa's future. Without better access to markets and lower agricultural subsidies, it cannot fully prosper. Lack of access to trade is what holds the continent back. Given market access, a level-laying field for African products and goods and a trade partnership will do more than the financial aids. Worldwide, agricultural subsidies in developed countries to the tune of $350 billion a year, are seven times what countries spend on development assistance and roughly equivalent to the entire GDP of Sub-Saharan Africa. Those subsidies are crippling Africa's chance to export its way out of poverty. Rich countries' escalating tariffs which peak with processed agricultural products are stopping Africa's manufacturing in its tracks. Rich countries must work to dramatically reduce these escalating subsidies and tariffs, which are huge barriers to processed products from Africa. Confining Ghana and Cote D'Ivoire to ex port raw unprocessed cocoa beans; confining Uganda and Kenya to export raw coffee beans; confining Mali and Burkina Faso to export raw cotton. Rich countries' subsidies to cotton farmers, are increasing supply artificially on international markets, and depressing export prices for African producers. Removal of U.S. subsidies on this one crop alone would increase revenues from cotton by about $250 million in West and Central Africa. (Canadian Speeches 2002) Establishing freer trade is an issue that concerns almost all African countries and is an area where industrialized nations have been slow to move So far, pounds 14billion in additional aid has been promised by the European Union, America, Canada and Japan. But the United Nations says at least pounds 27billion of aid is needed every year from2006. Oxfam is also warning that most of the promised new money will not start arriving until 2010. On debt relief, the charities point out that only 14 of Africa's poorest countries have so far had 100 per cent of their debt cancelled. And they claim that the total debt relief on offer amounts to less than 15 per cent of the pounds 5.5 billion paid out in repayments every year by 60 impoverished nations. While an important contribution, the G8 debt deal will provide less than $1 billion this year - the equivalent of no more than one dollar per person in the countries that are due to benefit. It is an inadequate response to the global debt crisis, which needs an estimated $10 billion a year of debt cancellation to eradicate extreme poverty. Major issues on debt remain unresolved - the damaging economic policy conditions attached to debt relief, the many indebted countries not on the list, debts not covered by the deal. (Official Response from the Make Poverty History campaign) Years of neglect by rich countries have contributed directly to the current food crisis in Niger, Mali, Mauritania and Burkina Faso, which are all among the world's five poorest countries (UN Human Development Index). In a normal year in Niger, 40 per cent of children are malnourished and one in four children die before their fifth birthday. Oxfam's analysis shows that these four West African countries get only a fraction of the development aid that countries such as Iraq and Afghanistan receive from rich donor governments. "Sadly, rich countries give aid on the basis of news headlines and political priorities instead of need. - millions of people across West Africa are now paying the price of this bias," said Natasha Kofoworola Quist, Oxfam's Regional Director for West Africa. Niger along with other West African countries will benefit from the G8 decision to increase aid to Africa to a total annual figure of $50 billion by 2010. If Africa is to progress and poverty is to be made history, this exploitative nature of the world order has to be dismantled root, branch and leaf. But G8 does not seem to dismantle a system that has served, and continues to serve, them so well. It is now left to Africa to find alternative ways of organising world grassroots opinion to put pressure on the big powers to reform or dismantle this unfair system. References Cowell, 2005, "Finance Chiefs Cancel Debt of 18 Nations", New York Times, Online, http://www.nytimes.com/2005/06/12/international/12debt.html, March 22, 2006 Blustein, 2005, "Debt Cut Is Set for Poorest Nations", Washington Post, Online, http://www.washingtonpost.com/wp-dyn/content/article/2005/06/11/AR2005061100681.html, March 22, 2006 Johnson, 2005, "G-8 pact slates $40 billion in debt relief", Washington Times, Online, http://www.washingtontimes.com/world/20050612-123831-2674r.htm, March 22, 2006 Ankomah, Duodu, Okello & Price, 2005, "G8 & Africa", New African. Issue: 442. Page Number: 10+. James Harder, 2002, "G8 Meeting Ducks More African Aid: Despite Billions of Dollars in Aid Committed to Africa by the World's Industrial Powers, African Leaders Question Why There Is No Movement to Reduce Trade Barriers", Insight on the News. Volume: 18. Issue: 28. Page Number: 24+. References AfricaFocus: Economy and Development http://www.africafocus.org/econexp.php (Accessed 21 March 2006) Make Poverty History www.makepovertyhistory.org (Accessed 21 March 2006) Oxfam www.oxfam.org.uk (Accessed 21 March 2006) ActionAid International : fighting poverty together http://www.actionaid.org (Accessed 21 March 2006) G8 Gleneagles 2005 News http://www.g8.gov.uk/servlet/Frontpagename=OpenMarket/Xcelerate/ShowPage&c=Page&cid=1078995903270&aid=1115144320879 (Accessed 21 March 2006) Cowell, 2005, "Finance Chiefs Cancel Debt of 18 Nations", New York Times, Online, http://www.nytimes.com/2005/06/12/international/12debt.html, March 22, 2006 Blustein, 2005, "Debt Cut Is Set for Poorest Nations", Washington Post, Online, http://www.washingtonpost.com/wp-dyn/content/article/2005/06/11/AR2005061100681.html, March 22, 2006 Johnson, 2005, "G-8 pact slates $40 billion in debt relief", Washington Times, Online, http://www.washingtontimes.com/world/20050612-123831-2674r.htm, March 22, 2006 Ankomah, Duodu, Okello & Price, 2005, "G8 & Africa", New African. Issue: 442. Page Number: 10+. James Harder, 2002, "G8 Meeting Ducks More African Aid: Despite Billions of Dollars in Aid Committed to Africa by the World's Industrial Powers, African Leaders Question Why There Is No Movement to Reduce Trade Barriers", Insight on the News. Volume: 18. Issue: 28. Page Number: 24+. "G8: THE FINAL PUSH A DAY TO REMEMBER; EXCLUSIVE Hero Midge Tells of His Mega-Gig Fears" Newspaper Title: The Mirror. Publication Date: July 6, 2005. Page Number: 6. Read More