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Impressions Of The Kananaskis Summit, 26-27 June 2002

Sir Nicholas Bayne, G8 Research Group
(Revised Version of 23 July)

The Kananaskis summit was secluded and intimate, with none of the violent demonstrations that upset Genoa. It was productive, in that it reached agreements that were not attainable at lower levels. It was also innovative in several aspects of summit format.

FORMAT

The Canadian hosts introduced various distinctive features into the summit format in 2002:

• They held the summit in the remote mountain resort of Kananaskis, within a tight security cordon. This was necessary protection against both violent demonstrations, as at Genoa, and terrorist attack. The security operations, however, were costly (figures of C$300-500 million are quoted). The leaders were cut off from the world at large. In particular, civil society and most of the media were kept in Calgary, 100km away - only Chirac and Aznar among the leaders visited the media centre.
• Kananaskis was a small resort, with limited accommodation. The size of delegations had to be kept down and everyone was lodged close together. This encouraged an informal and spontaneous atmosphere, with Blair and Bush meeting by chance in the gym at 6.30 am.
• The duration of the summit was cut back to a day and a half.
• Chretien chose a three-part agenda - terrorism, Africa and economic growth - at an early stage and stuck to it, resisting additions.
• There was no G7 statement and no agreed G8 communiqué. Instead, Chretien issued a 'Chair's Summary' of just over two pages, covering only points raised by the heads themselves.

A number of other, more substantial, documents, however, issued from the summit. These covered: the Africa Action Plan; the spread of weapons of mass destruction; cooperative action on transport security; and Russia's role in the G8. The heads also endorsed the report of the G8 Task Force on Primary Education and put their names to a statement on the Heavily Indebted Poor Country (HIPC) initiative clearly prepared by their finance ministers.

There were two innovations in participation:

• Africa. Four African leaders - Mbeki of South Africa, Obasanjo of Nigeria, Wade of Senegal and Bouteflika of Algeria - together with UN Secretary General Annan, joined the G8 heads for a joint meeting on the Africa Action Plan. The Africans were more than guests, as they had been at Tokyo in 2000 and Genoa in 2001; they were participants in the summit itself.
• Russia. . The G8 agreed that Russia could host a G8 summit for the first time in 2006, fitting into the cycle between Britain and Germany. This decision was taken by the heads themselves, without any advance preparation. It was expected that G7 meetings at the heads' level would cease in 2005, since by then Russia should be in the WTO and capable of taking part in all economic meetings. The G8 also laid out the cycle of summit hosts up to 2010, making clear they expected the summit to persist in its present form and membership up till then.

FROM GENOA TO KANANASKIS

A review of the follow-up to the major decisions taken at the Genoa summit of 2001 shows a reasonable record of success:

• The WTO meeting at Doha in November 2001 successfully launched a new round of trade negotiations. The G7 members worked well together there and responded to the aspirations of the developing countries.
• The Global Fund to fight AIDS, malaria and tuberculosis became operational early in 2002, with resources of about $2 billion. At its first Board meeting it allocated up to $616 million dollars to projects over the next two years.
• The DOT-Force applied the principles agreed at Genoa to a range of specific projects and prepared to hand over its responsibilities to the UN.

In addition, the G8 Africa Group and the Task-Force on Primary Education completed their work in time for this year's summit.

As usual, a number of G8 ministerial groups met in the run-up to the summit: environment ministers; labour and employment ministers; energy ministers (in Detroit rather than Canada); and justice and interior ministers (with special emphasis on terrorism). These groups have now developed a life of their own and their work had little impact on the summit itself.

The meetings of the G8 foreign ministers and G7 finance ministers in mid-June were more clearly linked to the summit. The foreign ministers focused on terrorism, conflict prevention and selected regional issues - Afghanistan, India-Pakistan, the Middle East and the Balkans. The finance ministers declared their confidence in the economic recovery. They agreed on an allocation between grants and loans for IDA financing and discussed the problem of replenishing the HIPC Trust Fund in the World Bank.

THE PLAYERS

The Heads of Government

There was unusual continuity with the Genoa summit, with Aznar (Spain, EU Presidency) as the only newcomer. Chirac (just re-elected), Bush, Blair, Berlusconi and Putin were all electorally secure and should also be at the 2003 summit. Schroeder (who has elections in October), Koizumi and Chretien are less certain to reappear.

The seclusion of the summit made it harder than usual this year to judge the personal performance of the heads. Blair and Chirac were active and effective players, as usual. Bush was an energetic participant, though his style (as Chirac commented) is rather different from the others. Putin held his own on the issues of concern to him and the Bush/Putin chemistry seemed good. Koizumi had skilfully disarmed in advance any criticism of the Japanese economy. Schroeder clearly had a hand in the decision on Russia hosting the summit, as Germany had to delay its turn. Aznar spoke up for Latin America. It was less easy to discern where Berlusconi or Prodi contributed to the outcome. As chairman, Chretien had the satisfaction of seeing the summit work as he planned it, but he seemed ill at ease in his public appearances.

Among the Africans, Mbeki and Obasanjo were articulate and assured. Annan made clear that his interest in the summit went beyond Africa.

Civil Society.

Mercifully, the Kananaskis summit attracted no violent protests. No windows were broken; only two demonstrators were arrested; and the security forces were never put under pressure. Marches and rallies in Calgary attracted no more than 2000 people at a time; the police handled them gently and they passed off peacefully. This contrast with Genoa was due partly to the inaccessibility of the summit site but partly also to the reaction against anti-globalisation rioting since 11 September 2001.

An 'alternative summit', the G6 Billion, was held in Calgary in the run-up to the summit. The Canadian foreign minister attended its final session and transmitted its conclusions to the G8 heads, as had been promised. This event, however, took a wholly negative attitude to the G8. The Canadian government had put a lot of effort into outreach to civil society, but were frustrated that this only seemed to generate more strident criticism, especially on Africa (see below). Leading charities like OXFAM and Medecins sans Frontieres followed the actual summit proceedings closely. Their comments were also critical, but usually from a more constructive basis, and influenced the media because the heads themselves were less accessible.

SUMMIT PROGRAMME

The first day, Thursday 26 June, began with a G7 meeting. After Putin joined them, the G8 started their discussion of terrorism, including cleaning up nuclear material in Russia, which took up a lot of time. Economic growth was taken later in the afternoon and regional political issues over dinner. The second day was wholly devoted to Africa. The G8 heads first met on their own and were then joined by the African leaders and Annan.

The analysis that follows looks at political issues first - terrorism and regional problems - followed by economic issues, starting with Africa.

POLITICAL ISSUES: TERRORISM

The heads used the summit to take stock of existing measures against terrorism, including terrorist financing, and added two new instruments to the existing armoury.

The first was an agreement on transport security, including travel documents, containers, ports and aviation security. It envisaged joint G8 action in international bodies such as the ICAO and IMO. The summit provided useful pressure to complete agreement, but the heads themselves did not have to intervene.

The second instrument embodied 'The G8 Global Partnership against the Spread of Weapons and Materials of Mass Destruction'. Its aim was to prevent nuclear, chemical or biological weapons falling into the hands of terrorists. The most important provision was a commitment by the G8 to raise up to $20 billion over 10 years to finance the destruction or clean-up of nuclear and chemical weapons and other material, initially in Russia but also in the other countries of the former Soviet Union.

After the Africa Action Plan, this agreement is the most important achievement of Kananaskis. The initiative has been driven by the United States, which launched a national programme in the 1990s to clean up plutonium and other fissile material in the former Soviet Union. (This was discussed at the Okinawa summit of 2000). The US has already committed $10 billion to this activity and it has become a major aspect of US/Russian relations since the recent Bush/Putin meetings. The increased concern with terrorism since 11 September 2001 helped to persuade the rest of the G7 to commit a matching $10 billion. But in return they insisted that the Russians give proper local support to their assistance projects in Russia. Funds that they had earmarked earlier could not be spent because of Russian reluctance to provide adequate access or legal and insurance cover.

The negotiation of the agreement at Kananaskis took up a great deal of time, between expert officials, the Sherpas and the heads themselves. Under pressure, the Russians reverted to Cold War reflexes and resisted giving the necessary assurances until the last moment. Exchanges among the heads themselves were needed to ensure that the Russians were fully committed to facilitating this programme on the ground and the matter was was only resolved at a bilateral between Putin and Bush.

REGIONAL ISSUES

The Middle East.

One day before the summit opened, Bush made a major speech outlining a new basis for a democratically based Palestinian state and its relations with Israel. This speech had been delayed by the spate of suicide bombings and it looked as if it might distract attention from the main summit agenda. But in fact the Middle East was discussed over dinner, as planned.

The most striking aspect of the speech was a refusal by Bush to deal with Arafat as Palestinian leader (though he did not name him) because he was tainted with terrorism. The other G8 heads welcomed the US proposals on how Palestine should become a viable state, which reflected in part European ideas. They took the position that the Palestinians had the democratic right to choose their own leaders, though Blair, Berlusconi and Chretien, in different ways, showed some sympathy with Bush's frustration with Arafat. There was thus no open disagreement at the summit, but no great advance either.

Other Regional Issues

The heads certainly discussed Afghanistan (including the destruction of the opium crop), India/Pakistan and Korea over dinner. It was widely expected that Bush would raise Iraq, but there is no evidence that he did so. Apart from Korea, all the regional issues which the heads chose to discuss had strong links with terrorism.

ECONOMIC ISSUES: AFRICA

At Genoa, the G8 heads had launched the 'Genova Plan for Africa', as an immediate and spontaneous initial response to the 'New African Initiative' presented to them there by Presidents Mbeki, Obasanjo and Wade. The G8 set up an Africa Group to prepare their definitive response, to be agreed at Kananaskis.

Over the next year the New African Initiative mutated into the New Partnership for Africa's Development (NEPAD). The key concepts underlying the NEPAD are:

• African countries must take responsibility for their own development. They must not blame their problems on others or rely on programmes imposed from outside.
• African countries must set and attain better standards of political governance and economic management. They should hold each other accountable for meeting these standards and set up a system of peer review for this purpose.
• Regional and sub-regional economic integration in Africa should be encouraged and the flight of African capital should be reversed.
• Better domestic performance on these lines should encourage Western countries to offer aid and market access and make Africa better able to attract private foreign investment. This would enable Africa to end its marginalisation in the international economic system.

The G8 Africa Action Plan, adopted at Kananaskis, welcomes NEPAD and seeks to respond to it while leaving its ownership clearly with the Africans. The key concepts of the Action Plan are:

• G8 countries will set up 'enhanced partnerships' with African countries that are seeking to meet the NEPAD standards.
• The NEPAD peer review will influence the G8 in their choice of 'enhanced partners', though each G8 country will make its own assessment.
• The G8 countries have already promised at the Monterrey meeting in March 2002 to increase their total aid spending by $12 billion per year over five years. (In fact this total includes extra money from all EU member states, while Japan's aid is contracting.) Half or more of this new aid money 'could be directed to African nations that govern justly, invest in their own people and promote economic freedom'.

This awkward phrasing, which attracted criticism from development NGOs, reflected a difference within the G8. The Europeans, with Canada, were eager to commit 50% to deserving African countries. The United States was reluctant. Bush did not want to provide grounds for Congress to attach conditions to the Millennium Challenge Accounts, the channel for the new aid announced at Monterrey. This issue was discussed up to the last moment and had to be settled at head of government level.

The Africa Action Plan brings together G8 commitments in two political areas (peace and security and strengthening governance) and six economic ones (trade and investment, debt relief, expanding knowledge, improving health, agriculture and water resources). In the mass of detail, it is difficult to distinguish ongoing commitments and new ones. Several areas, such as trade, health and education, overlap with the 'economic growth' item on the summit agenda and will be treated further below. In addition, it is worth noting:

• The peace and security chapter is distinct from the others. It deals mainly with countries who would not meet NEPAD standards; it sets deadlines (rare in the rest of the Action Plan) for enabling Africa to deal with its own conflict prevention; and it promises action on named trouble-spots like the Congo and Sudan.
• The other chapters broadly correspond to the detailed provisions of the NEPAD, but the match is not perfect. The Action Plan notes the Africans' interest in infrastructure, but does not endorse it, nor does it react to NEPAD ideas on debt relief. It is weaker than NEPAD on trade access and environmental issues, but gives more attention to women and civil society.

The African leaders at Kananaskis reacted positively to the Action Plan. Obasanjo said it was not perfect, but it was a good beginning. The G8's support for NEPAD provided enough impetus for it to be adopted by the leaders of all African countries at the meeting chaired by Mbeki on 9 July, that converted the old Organisation for African Unity (OAU) into the African Union.

Yet it is clear that both sides have a great deal more to do. On the African side, one major weakness of NEPAD is that, although it calls for more participatory democracy, it has been handled so far entirely at head of state level. This has provoked widespread criticism from NGOs of all kinds that it is being imposed from on top without consulting those who will be most affected by it. It is not clear how the actions envisaged by NEPAD can be put into effect at the grassroots. Another uncertainty is whether the peer review process (which is voluntary) will succeed in overcoming the traditional African reluctance to criticise one another or in changing the behaviour of non-cooperative states like Zimbabwe.

On the G8 side, the promise of $6 billion of additional aid per year has been attacked by NGOs as imprecise and inadequate in relation to the figure of $64 billion quoted as the total financing needs of NEPAD. In fact, this amounts to a very large supplement to existing aid levels. If African countries really improved their standards of governance, additional aid and private finance should be forthcoming. A more serious weakness is the apparent lack of consistency in the follow-up to the Action Plan. Several G8 countries, including the US, UK and Canada have taken advantage of the summit to announce additional aid for Africa. But each announcement has been uncoordinated and they are difficult to compare with each other. The implication of the Action Plan is that G8 members will each act on their own to set up 'enhanced partnerships', without this being a joint activity. Though there will be follow-up in the G8 context (see below), there is no coordination of the Action Plan elsewhere.

STRENGTHENING ECONOMIC GROWTH

There was a brief but lively discussion among the heads of developments in their own economies. Like their finance ministers, they expressed confidence in the economic recovery, though there was some anxiety about accounting standards in the light of the latest scandal at WorldCom. The heads expressed support for Latin American countries, naming Brazil though not Argentina. But most of their discussion concerned developing countries, especially poor ones, and therefore overlapped with the Africa Plan. The results were mixed.

Debt Relief and the HIPC

In the G7 meeting, the heads agreed to fund the shortfall emerging in the World Bank Trust Fund to finance debt relief under the HIPC, up to $1 billion. While the finance ministers had discussed this issue at Halifax, they had not been able to agree a figure, because of US hesitation. Under persuasion for Blair and others, Bush agreed to the S1 billion total, thus usefully producing a figure for new spending agreed at the summit. US readiness to accept a precise figure here helped to induce the rest of the G7 to make the commitments sought by the Americans in cleaning up Russian nuclear material. This was an example of the cross-issue deals that are possible at summits but seldom in fact happen.

Trade and the WTO

The heads committed themselves to resist protectionist pressures and to complete the Doha round on time by 2005. In the Africa Plan they amplified this by reaffirming the negotiating mandate on agriculture and to promise more capacity building and market access for poor countries. Canada in fact announced measures to admit the products of least-developed countries duty-free (except for eggs, poultry and dairy produce), thus matching the existing EU and US measures. But otherwise these G8 commitments are no advance on the status quo; they do not correct the unfavourable impact of recent US trade measures nor promise action to accelerate the negotiations in Geneva. This was a disappointment to the Africans. They had hoped for precise G8 commitments to improve access for their agricultural exports, but France was reluctant to go beyond what was agreed at Doha.

Education

The G8 education task-force produced a clear report, stressing the importance not only of getting children into school but keeping them there and of doing more for girls. The report accepted the argument of the World Bank that countries that organise themselves effectively to make good use of aid should receive the aid they need. The G8 heads endorsed the report and 'agreed to increase significantly our bilateral assistance' for primary education. A similar commitment is contained in the Africa Action Plan and both the US and Canada announced more aid for education. But it is clear that this response will consist of piecemeal national contributions rather than a joint effort. The G8 did not commit themselves to help the 18 countries identified by the World Bank as deserving 'fast-track treatment', 11 of which are in Africa; nor to increase their aid to education on the scale the World Bank has recommended, as urged by a group of NGOs.

Health, Including AIDS

The G8 promised in the Africa Action Plan enough resources to eradicate polio. But the leaders ignored the funding pressures on the Global Fund to fight AIDS, malaria and tuberculosis, which they had launched only the year before. The Fund has got under way very fast in committing funds for projects, though it has already received far more bids than it can meet. Up to $616 million will be spent over the next two years on 58 projects, more than half in Africa. But if these projects were extended over five years, that would exhaust almost all the Fund's resources, which now stand at $2 billion. So the Fund already needs replenishment, but the G8 made no move to do this. While the US committed another $500 million to fight AIDS, this was outside the Global Fund. When the G8 are reluctant to sustain this instrument that they launched only a year ago, it casts doubt on the durability of their other pledges.

Sustainable Development

The G8 have accepted Annan's concept that the meetings at Doha (for trade), Monterrey (for finance) and Johannesburg (the World Summit on Sustainable Development - WSSD) form an ascending sequence and have written that into the Africa Action Plan. But after the failed meeting in Bali in May the preparations for the WSSD are in trouble, partly because of differences between the G8 members. Despite the presence of Mbeki and Annan, the G8 leaders showed no sign of intervening to make the Johannesburg meeting a success, especially by making a joint commitment to take part themselves. Chirac spoke at great length about sustainable development and said publicly that he had urged all his G8 colleagues to attend. But he and Blair were the only heads to indicate they would be at Johannesburg. If most of the G8 heads stay away, that will cast doubt on their commitment to Africa, as well as to sustainable development.

ASSESSMENT

The organisation of the Kananaskis summit was handled skilfully by the Canadians. They worked to ensure good continuity in the summit process, so that issues launched at Genoa were properly followed up. They focused on their chosen agenda, delegating other issues to subsidiary ministerial groups. They simplified the process at the summit itself, so that the heads could concentrate on the key issues and strike deals where needed. Chirac has already said that he intends to follow the Canadian model next year.

Kananaskis did what summits are intended to do: the heads acted to resolve issues that had not been settled at lower levels, in addition to giving their authority to work prepared by their officials. The intervention of the heads can be seen in:

• The decision on Russia hosting a summit in 2006 and on the summit sequence;
• The figure of $1 billion to replenish the HIPC Trust Fund;
• The negotiation of the programme to clean up nuclear and chemical material in the former USSR.
• The financial commitment to underpin the Africa Action Plan.

The attacks of 11 September 2002 inevitably brought terrorism onto the summit agenda, so that the political content of Kananaskis was much greater than Okinawa 2000 or Genoa 2001. But terrorism was accommodated without undermining the economic objectives of the summit and these were not even upset by the last-minute attention to the Middle East. Kananaskis produced two agreements in this area, the one on weapons of mass destruction being of great importance and demonstrating the benefits of having the Russians in this forum.

Kananaskis completes an entire summit cycle, starting in Lyon 1996, in which the G8 have constantly returned to problems of development. Little attention was given this year to other economic issues, such as the financial system. The G8 summit must not lose its capacity to intervene in these subjects or neglect danger signals, as happened at Denver in 1997 before the outbreak of the Asian crisis.

However, the summits are concerned with managing the advance of globalisation. The most intractable problem here is that poor countries can miss all the potential benefits of globalisation and thus fall further behind. Precisely because it is so intractable, this problem of enabling poor countries to benefit from globalisation has become lodged with the G8. Despite a series of initiatives in debt relief, IT, infectious diseases and trade access, the G8 have found this a Sisyphean task. Much of the economic agenda at Kananaskis, apart from Africa, covered areas where G8 initiatives, after initial progress, showed signs of running out of steam, either because of inadequate resources (like education and health) or because they met domestic resistance (like trade access).

The combination of the Africa Action Plan with the NEPAD is the latest initiative in this field. Having launched the process at Genoa on their own personal initiative, without advance preparation, the G8 heads now had to make good their promises. The work on Africa has revealed some of the strengths of the G8 process: its ability to launch innovative initiatives, to embrace a wide range of different issues and to combine political and economic actions. But both in Africa and the G8 the process only comes together at the summit, not at lower levels. There is no clear mechanism for coordination of G8 action, which would be robust enough to survive the inevitable setbacks on the African side. The G8 and NEPAD combination may now have lift-off, but it is not securely in orbit.

It is therefore welcome that Chirac, as the next summit host, has already said that Africa will have the top priority in June 2003 as it had this year. The G8 Africa Group remains in being, with Camdessus (former Managing Director of the IMF) taking over the chair, and will serve as a tracking mechanism in following up the Action Plan. Continued G8 summit attention to Africa should help to provide impetus to NEPAD and its peer review mechanism. But the coming year should also be used to improve the coordination of G8 and wider Western policy towards Africa at levels below the summit.

One of the original purposes of the summit, which remains valid, is to provide a system of collective management involving North America, Europe and Japan. Kananaskis therefore provides a test of how far President Bush is prepared to participate in multilateral arrangements and how far he is driven by a unilateralist agenda determined by domestic political interests. In the international economic field the message so far has been mixed. On the credit side the US showed enough flexibility to ensure the Doha round was started and launched a surprising new commitment on increasing aid at Monterrey. But domestic pressures have prompted unhelpful unilateral actions on the Kyoto Protocol, steel tariffs and the new farm bill.

The summit has provided useful guidance on how Bush operates. Though others took the first initiative on Africa, Bush clearly endorses the high priority given to Africa and has not tried to sidetrack it. He is committed to the general approach of the Action Plan and NEPAD and ready to allocate new funds to African programmes. But his Africa policy is his own, looking forward to his visit there in 2003, and he is reluctant to coordinate with others. In the discussion of other economic issues, Bush showed no sign of flexibility on trade or sustainable development, but it is not clear that he was put under pressure. Over weapons of mass destruction, which is now driven by the terrorism agenda, he was looking to his G8 colleagues to support something the US was doing already, but he formed an alliance with Putin for the purpose. So the conclusion is that Bush will promote collective action, not only as part of the terrorism agenda but also in other areas. But within that collective action he will decide what the United States does without much reference to what others do.

Kananaskis will be remembered as a well-prepared and well-organised summit which escaped the tensions of Genoa the year before. The heads exerted themselves to conclude two far-reaching agreements associated with substantial spending commitments over many years ahead. The G8 Africa Plan, in its link with NEPAD, could be the instrument of historic change - but only, as Annan said, if both the G8 and the Africans do all that they have promised to do.

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