G8 Great? Debt and the art of deception
benj | 09.06.2005 09:53 | G8 2005 | Analysis | Social Struggles | World
It's all getting a bit weird... the lines are bing blured and the goal posts unclear. The PR machine throwing white wash and confussion into the mix as the G8 summit approaches. With climate change and African poverty apparently the key issues on the official agenda and the great and the good of planet celebrity all pledging support, and even corporations getting in on the game, it's no wonder people are getting confused.
So what are the issues? Well forget climate change, all attention is now on Africa and the alleged goals are removing the burden of debt, increasing aid and improving trade. Keep your eye on that last one cause that's what it's really all about.
Staring with the so-called debt. 'Poor' countries (ie. those in the south with all the natual resources, land and cheap labour we cherish so much in order to maintain our owe extravigant western lifestyles), have debts to three sorts of creditors: individual countries (bilateral debt); institutions such as the World Bank and IMF (multilateral debt); and the the private sector. Previous rounds of debt relief following the Jubilee 2000 campaign were rescricted to fairly insignificant bilateral debts for countries that qualified for help under the heavily indebted poor country initiative (HIPC). Vast sums remained owing to the multilateral creditors.
Campaign groups have identified more than 60 countries whose ability to hit the UN development goals for 2015: a halving of extreme poverty; a two-thirds cut in infant mortality; and universal primary education, is severly hampered by debt repayments which amount to $39bn in total.
The Blair agenda falls far short of wiping out these debt and proposals are arguably designed to increase the countries ability to pay. The planned agreement applies to just 18 countries who have received debt relief under the HIPC agreement. Together they pay around $1bn a year to the IMF, the World Bank and the African Development Bank. The IMF debts are not currently included in the deal so the total 'benefit' is likely to be as low as $500m a year - a drop in the ocean amounting to about five days worth of debt repayment.
On the aid front, America falls well short of hitting the target set by the United Nations in 1970 for donating 0.7% of national income to aid. Any 'aid' increases is unlikely to account for even as much as half the level of debt relief agreed. And aid is conditional, but more of that later.
Gordon Brown has a proposal for doubling aid called the international finance facility. It is a highly dubious scheme that involved generating new debts for poor countries. Described as a 'live-now-pay-later 'scheme, governments would get a chance to float bonds on global markets to raise extra funds for development, and pay back those who bought the bonds in 15 years' time out of future aid budgets.
Aid is a funny word. Aid is given typically given in the form of food, often food which has no market and is worthless (ie. large quanities the GM grain grown in the states which can't find a willing market outside of the US). This 'aid' acts as government subsidies to US agibusiness through the World Food Program and companies like Cargil do very nicely out of it. Meanwhile, the recepients of the 'aid' find their domestic markets for home grown crops is underminded by the imports which further adds to the decline in countries ability to feed itself.
Additionally, 'aid' has conditions based on the corporate agenda of the governments providing it and are tied to contracts for arms sales, major construction projects, resource consessions etc.
The infamous structural adjustments of the IMF are typical of the interference imposed on indebted nations by the west - forcing opening of markets to westen companies, privatising national resources, and creating 'flexible' labour forces to encourage foreign investiment.
So what of the hype around the G8? It is clear that the deal being proposed is a white wash. Sure there will be a deal on debt, and perhaps a token increase of 'aid'. But don't expect multilateral debt to be writen-off.
G8, IMF, World Bank, WTO - all are feeling the heat from opposition to their destructive policies. The hype around the July G8 summit is an attempt to improve their image and put a dent in the growing oposition movement. Debts are the shackles that facilitate the continued exploitation of the south and the G8 isn't about to give that up. Over the next decade we debt used to facilitate a massive acceleration of resource exploitation (sorry, that's 'trade' in their language) throughout Africa.
And progress on curbing Climate Change? get real!
Staring with the so-called debt. 'Poor' countries (ie. those in the south with all the natual resources, land and cheap labour we cherish so much in order to maintain our owe extravigant western lifestyles), have debts to three sorts of creditors: individual countries (bilateral debt); institutions such as the World Bank and IMF (multilateral debt); and the the private sector. Previous rounds of debt relief following the Jubilee 2000 campaign were rescricted to fairly insignificant bilateral debts for countries that qualified for help under the heavily indebted poor country initiative (HIPC). Vast sums remained owing to the multilateral creditors.
Campaign groups have identified more than 60 countries whose ability to hit the UN development goals for 2015: a halving of extreme poverty; a two-thirds cut in infant mortality; and universal primary education, is severly hampered by debt repayments which amount to $39bn in total.
The Blair agenda falls far short of wiping out these debt and proposals are arguably designed to increase the countries ability to pay. The planned agreement applies to just 18 countries who have received debt relief under the HIPC agreement. Together they pay around $1bn a year to the IMF, the World Bank and the African Development Bank. The IMF debts are not currently included in the deal so the total 'benefit' is likely to be as low as $500m a year - a drop in the ocean amounting to about five days worth of debt repayment.
On the aid front, America falls well short of hitting the target set by the United Nations in 1970 for donating 0.7% of national income to aid. Any 'aid' increases is unlikely to account for even as much as half the level of debt relief agreed. And aid is conditional, but more of that later.
Gordon Brown has a proposal for doubling aid called the international finance facility. It is a highly dubious scheme that involved generating new debts for poor countries. Described as a 'live-now-pay-later 'scheme, governments would get a chance to float bonds on global markets to raise extra funds for development, and pay back those who bought the bonds in 15 years' time out of future aid budgets.
Aid is a funny word. Aid is given typically given in the form of food, often food which has no market and is worthless (ie. large quanities the GM grain grown in the states which can't find a willing market outside of the US). This 'aid' acts as government subsidies to US agibusiness through the World Food Program and companies like Cargil do very nicely out of it. Meanwhile, the recepients of the 'aid' find their domestic markets for home grown crops is underminded by the imports which further adds to the decline in countries ability to feed itself.
Additionally, 'aid' has conditions based on the corporate agenda of the governments providing it and are tied to contracts for arms sales, major construction projects, resource consessions etc.
The infamous structural adjustments of the IMF are typical of the interference imposed on indebted nations by the west - forcing opening of markets to westen companies, privatising national resources, and creating 'flexible' labour forces to encourage foreign investiment.
So what of the hype around the G8? It is clear that the deal being proposed is a white wash. Sure there will be a deal on debt, and perhaps a token increase of 'aid'. But don't expect multilateral debt to be writen-off.
G8, IMF, World Bank, WTO - all are feeling the heat from opposition to their destructive policies. The hype around the July G8 summit is an attempt to improve their image and put a dent in the growing oposition movement. Debts are the shackles that facilitate the continued exploitation of the south and the G8 isn't about to give that up. Over the next decade we debt used to facilitate a massive acceleration of resource exploitation (sorry, that's 'trade' in their language) throughout Africa.
And progress on curbing Climate Change? get real!
benj