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2005 G8 Pre-Summit Conference

Development, Sustainability and Finance:
The Role of the G8 and the Gleneagles Summit

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Conference video available for June 29 and June 30.
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Program • Speakers • Résumés des articles (en français)

Ade Adefuye, Commonwealth Secretariat [Program]
The G8 and Africa: Political Aspects
Paper: [HTML] [PDF]

Sir Nicholas Bayne, London School of Economics and Political Science [Program]
The Past: Has the G8 Met Its Objectives [version française]
Full paper: [HTML] [PDF]
The G8 summit, like the G7 summit before it, has three abiding objectives: to provide political leadership, launch new ideas and resolve disputes that persist at lower levels; to reconcile domestic and international pressures generated by the advance of globalisation; and to provide collective management of the international system by Europe, North America and Japan. The summit seeks to attain these objectives by decisions that prove durable, acceptable to other players and consistent one with another. Only the hardest problems come up to summit level for resolution and often need iterative treatment before they can be settled.

Since the reforms introduced at the 1998 Birmingham Summit, the last time the G8 met in the UK, the summit has performed well against the first and third objectives. The G8 has launched new initiatives and resolved disputes on, for example, financial architecture, debt relief, Kosovo, information technology for development, infectious diseases, helping Africa, counter-proliferation and Middle East reform. It has preserved its collective approach, despite deep divisions over Iraq, while associating non-G8 countries (especially African leaders) and non-state actors with its work. It has even identified a new objective, in promoting combined political and economic programmes.

But performance against the second objective has been less satisfactory. Despite some successes, the G8 members have often failed to agree at the summit or to follow up their own initiatives because of inability to overcome domestic resistance. This accounts for slow progress in the economic aspects of the Africa programme and for persistent disagreement on environmental issues, especially climate change. By choosing these two subjects as the lead items for the 2005 Gleneagles Summit, the British hosts are setting a challenge to the G8, to see whether it can still fulfil its fundamental aims in the context of the 21st century.

John J. Kirton, Director, G8 Research Group [Program]
Energizing Global Sustainable Development: Prospects for the Gleneagles G8 [version française]
Full paper: [PDF]
The 31st annual G7 and now G8 Summit, being held at Gleneagles, Scotland, on July 6-8, 2005, promises to be a summit of solid accomplishment in unexpected ways. It will usefully advance its priorities of African development and climate change, while falling short of the ambitious goals that its host, British prime minister Tony Blair, set out to achieve, especially in regard to the G8’s now half decade old African file. Some debt reduction for the poorest, stronger aid commitments, new famine relief and a new front-load international finance facility to develop needed vaccines will make the Summit a worthwhile decisional event in regard to Africa, but will not satisfy the large numbers of civil society participants demonstrating on the outside. Gleneagles’ greatest accomplishments could well come elsewhere, especially in setting new normative directions to combat climate change from a reluctant George Bush’s America and its Kyoto-committed G8 partners, and in involving the rising climate change powers of China, India, Brazil and Mexico as more regular participants in the G8 summit and a future carbon constraint regime.

Limiting Gleneagles achievements and skewing them toward the area of climate change are the way those outside forces highlighted by the concert equality model of G8 governance are unfolding as the Summit draws nigh. The small shocks that remind G8 leaders of their common vulnerabilities to one another and the global community are coming through volatile and generally rising energy prices, rather than financial crises, infectious disease, or terrorism from the broader Middle East and North Africa. It is in regard to oil, gas and nuclear energy where the 1944-45 generation of multilateral organizations are weak and failing, while in the case of African development a revitalized World Bank can be relied upon to do much of the work. Economic growth and currency values are generally rising in countries outside rather than within the G8, and in the United States rather than most of its partners within the club. The British public emphasis on debt relief and aid, rather than peace, good governance and anti-corruption as the key to African development takes the Gleneagles discussions away from the G8’s core shared social purpose of globally fostering open democracy and individual liberty. While the G8 leaders at Gleneagles are a uniquely experienced group, the low domestic political capital and control of most will limit their willingness to accommodate their international partners, while giving a relatively secure George Bush a veto on ambitious collective leaps. And while Tony Blair is hosting his second G8 Summit, has set and stuck to a clear agenda, and is now engaging in a flurry of pre-Summit travel to find common ground, his election-induced delay in the Summit preparatory process, the demands of his Africa Commission and domestic civil society voters, and the large number of outside significant powers involved in the heart of the Summit’s discussion could well erode his ability to let the G8 leaders be leaders and adjust to each other enough to produce large package deals.

Princeton Lymon, Council for Foreign Relations [Program]
The Dollar and World Development: A Conflict to Be Solved
Overall, the G8 performance in meeting the commitments under the G8-Africa Action Plan (AAP) has been good. Quoting from the University of Toronto’s G8 Research Group: "Issue areas that garner the largest degree of attention from the G8 are those require little coordination among G8 states, involve little obligation beyond the commitment of funds and produce ends that are both easily quantifiable and media-friendly. As such the G8 has delivered an excellent record on debt relief and bilateral funding of the Global Polio Eradication Campaign and Africa peace training centres." Other areas of some accomplishment are programs for food security, commitments (though mostly from the U.S.) to combating HIV/AIDS, and programs to increase governance, general capacity, and private sector development. The areas in which the G8 has done least well are trade and co-ordinating their assistance. Trade looms large at this year’s summit in advance of the next Doha round in Hong Kong.

In terms of African performance, most analyses of accomplishments under the G8-Africa Action Plan focus on the developed countries. African performance should be examined in more detail, disaggregated among different countries and with criteria for judging progress. For example, democracy has proceeded well in several countries but backsliding has occurred in Zimbabwe, Chad, and perhaps Ethiopia and Uganda. Should the African Union (AU) be held to account for these cases, or should they be treated wholly individually? If the latter, what is the value of the NEPAD (Africa-wide) partnership, which is at the heart of the G8-AAP?

On peace and security, weak capacity and political wrangling have slowed the AU’s response to Darfur (aggravated by squabbles among the European Union and the North Atlantic Treaty Organization). Regarding governance, there is still poor performance in promoting the private sector, e.g., in granting property rights and loosening regulations. Corruption remains a serious problem in many countries.

Clearly Sub-Saharan Africa will not make the Millennium Development Goals (MDGs). More aid will be needed with longer-term commitments. But the MDGs are quite diverse and the relationship to growth is not entirely clear, setting up choices. For example, the Commission on Africa and other analyses call for massive investment in infrastructure, not included in the MDGs. Doubling of aid may be justified but it will also deepen African dependence on aid. Already many African counties derive substantial percentages of their budgets, and indeed their gross domestic product (GDP), from aid. How to balance these considerations has not been put forward.

Are African capacities being stretched too soon over too many objectives? The AAP is also long and diverse, with 132 commitments, programs, and objectives. Some are quite broad, others quite specific. It is easy to get lost in the details, to highlight individual program commitments and achievements, without addressing the fundamental long-term issues surrounding aid, debt relief and growth. This should be the focus of the G8 and its African partners. Otherwise the meeting and the communiqué lose sight of the forest for the trees.

Sheila Page, Overseas Development Institute [Program]
Doing Doha for Development: A Development Perspectives
Full paper: [HTML] [PDF]
To understand how the Doha Round can contribute to development, this paper first asks whether it is possible or useful to define a trade negotiation round as a ‘Development Round’. Then, it looks at the trading interests of the developing countries in this round, and how they have become more able to articulate their own interests. Finally, it examines the particular interest of developing countries in ‘special and differential treatment’. While trade can increase the income available to reduce poverty or stimulate development, it does not do these directly. There is a risk that putting development at the centre of a trade round will reduce the potential for good trade effects without compensating gains for development.

A focus on development should lead to a determination to ensure that all developing countries see some income gains from the round: this is not easy. Some countries have potential large gains, but these are in the most protectionist negotiation areas, agriculture and services. Previous concessions mean that many other countries have little to gain on market access, and a few have much to lose from ‘preference erosion’. It may be necessary to find ways of incorporating financial benefits into the World Trade Organization system.
A focus on development should also lead to attention to what developing countries want, and how the system can make it easier for them to achieve their aims. They have become more aware of their own interests and more skilled at putting them forward. It is no longer possible or desirable, therefore, for developed countries to decide what to offer them. This growing participation makes the old discriminatory forms of special treatment more difficult, because those excluded are no longer acquiescent. Development advantages and special treatment must now emerge from negotiations and agreements; developed countries can help by not obstructing the negotiations and, of course, by pursuing their own national interests: by rejecting protection.

Paolo Savona, LUISS University, Rome [Program]
The Dollar and World Development: A Conflict to Be Solved
[version française]
Paper: [HTML] [PDF]
Two economic models are presently colliding in the global market: the "U.S. locomotive" and the "EE autopoietic" growth. The first, based on the international use of the dollar, requires exogenous pushes coming permanently from the U.S. foreign deficit and periodically from the U.S. federal budget deficit. The second, based on the growing of the domestic demands of emerging economies (EE), is fed by foreign direct investments induced by countries' liberalization and integration (i.e., globalization). The structural weakness of the dollar creates problems for the EE model. In light of insufficient international co-operation, there is the risk of a global currency crisis and a decrease in the rate of global growth, with a probable impact on international relations and related foreign policies.
(Note: Professor Savona was not able to attend the conference.)

George von Furstenberg, Indiana University, Bloomington [Program]
African Finance and Lack of Development [version française]
Paper: [PDF]
Of all major global regions, Sub-Saharan Africa has made the least progress over the past three decades, and – except for South Africa – it is now one of the world’s poorest. Even a country relatively untouched by war (though not by refugees) that had been widely hailed as "reformed" by the early 1990s, Tanzania, subsequently turned in a disappointing growth performance that is hard to explain. It is as if a quarter of its capital formation had gone missing and multifactor productivity had shrunk relentlessly from 1990 to 2003.

Tanzania has improved the soundness of its money and the quality of financial regulations, and its growth rate has risen in recent years. Yet financial and other forms of repression have not ended. This clouds the prospect of cumulative improvement in living standards and detracts from the effectiveness of foreign aid. Foreign assistance programs that try to bypass the national and local authorities in the recipient countries also cannot sustain progress. In the developing countries, their effect will be transitory to the extent they do not encourage institutional development and strengthen public-service ethos.

Domestic private interests, though often in cahoots with local authorities, have been more successful at generating cumulative development in China. There the central government, for its own survival, has been keenly interested in promoting the rise of most people’s living standards and the sense of national duty is strong and widely shared. In much of Sub-Saharan Africa, incentive compatibility of good governance for building the country together still has to be instilled before cumulative progress may be possible.

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