G8 disappoints on debt, heartens on development

G8 disappoints on debt, heartens on development
Alan Wheatley

Okinawa, Japan, July 23: For development lobbyiststhe Okinawa summit ended on Sunday as it began, an exercise in frustration at the failure of the world's rich nations to keep a promise to wipe out the debts of the world's poorest states.

The Group of Eight, meeting on this southerly Japaneseisland, admitted they had to try harder but dismayed campaigners by refusing to relax the strict conditions on a year-old debt relief initiative that has fallen far short of expectations.

The debt-cancellation coalition Jubilee 2000 promptlypromised to march on Prague, where the International Monetary Fund will meet in September, to keep up pressure on the G8 and make up for what it called a squandered summit.

"While the G8 leaders have enjoyed Japan's $750 millionhospitality, they have squandered a historic opportunity to cancel the unpayable debts of the poorest countries."

"They have squandered the hope of a fresh start for theworld's poorest people in this new millennium. Their failure to act on this issue was the defining moment of the summit," Ann Pettifor, who heads Jubilee 2000 in Britain, said in a statement.

But less strident voices took away some hope from the summit,pleased that the Eight had spent a lot of their time debating the tangled web of factors beyond debt that drive development.

"This is the first time, at least in my experience, and thisis my last G8 conference, that there has been such a systematic focus on the developing world -- on the problems of disease and the digital divide and education," said U.S. President Bill Clinton, who announced $300 million in aid to provide free school lunches in developing countries.

DEVELOPMENT TARGETS

The leaders committed their governments to a raft of U.N.development goals, including numerical targets to reduce AIDS and other infectious diseases, the halving of absolute poverty by 2015 and a place in school by then for every child on earth.

"This is an important step forward -- achieving universalbasic education is the greatest development challenge facing the world today," Rasheda Choudhury of the Global Campaign for Education, an international alliance of teacher unions and non-governmental organisations.

Improving health and education costs money, of course, andrich-country voters are in no mood to pay higher taxes. The British charity Oxfam estimates it would cost $8 billion a year to put every child in school.

"The G8 summit has announced bold targets but without comingup with the necessary increases in aid spending and debt relief these goals are in danger of becoming simply worthy aspirations," said Henry Northover of CAFOD, a British development agency.

Indeed, over the past five years official developmentassistance (ODA) from developed countries has fallen 20 percent.

But could the winds be shifting?

Canadian Prime Minister Jean Chretien said he had proposedthat the G8 use the fruits of today's strong economic growth to increase its overseas development assistance by five-10 percent.

The idea was rejected but Chretien said his fellow leadershad recognised the need to increase their development aid.

French President Jacques Chirac regretted the G8's responsebut added: "It marks a turning point all the same, since for the first time this year development aid did not drop."

CORROSIVE CANCER

One academic observing the summit said the G8's comprehensiveapproach to development was a welcome departure from the narrow focus on debt relief that has dominated past summits.

"Writing off some debt or throwing billions of dollars atcountries without worrying about infrastructure -- IT, health and education -- and the corrosive cancer of bad governance and corruption is a shallow form of engagement that doesn'T do them any good," George von Furstenberg, a professor in economic and Financial policy at Fordham Universityin New York, told Reuters.

Only nine out of 41 very poor countries have qualified so farfor an ambitious debt relief plan that the G8 launched a year ago. They stand eventually to benefit to the tune of $15 billion.

Although the G8 hopes to raise its success rate to 20countries and $35 billion by the end of the year, that would still be a far cry from the $100 billion figure that leaders trumpeted at last year's summit in Cologne.

There are many reasons for the slow progress. Thirteencountries for a start are at war. Some do not want to apply for the scheme, fearing they will be shunned by commercial lenders.

Others resent the political interference in their domesticaffairs by the IMF, with which they must agree and implement detailed economic reforms and poverty reduction strategies to qualify for debt relief.

It was this strict IMF conditionality that debt-abolitionlobbyists wanted the G8 to relax in Okinawa.

But the leaders held firm. "We have to make one point clear:we're not going to pass over human rights violations and the presence of military conflicts in the countries selected for debt relief. It would be a big mistake to ignore these conditions," said Italian Prime Minister Guiliano Amato.

Von Furstenberg said the IMF was right to recognise that badgovernment was at the root of stunted economic development and to tie more political strings to debt reduction, a goal that the rich countries first proclaimed as far back as 1987.

"Debt relief is a wonderful example of a very slow, arduousprocess of learning that has made comparatively little progress at each step. The leaps of insight have been slow in coming," he said.