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July 20, 2001In preparation for the G-8 meeting beginning in Genoa today, US President George Bush issued a call for new World Bank funds to the poorest countries to be provided as grants rather than loans. And World Bank President James Wolfenson called for rich countries to give up some $300 billlion in agricultural subsidies that deny poor countries equal access for their exports. President Bush made no commitments to finance his new proposal, however, and while President Wolfenson has leverage with poor countries to enforce calls for "open trade," he has no such leverage with the rich countries that direct his institution. Meanwhile, the G8 are offering nothing new on debt cancellation and a tiny fraction of the sums required for the new global health fund. My commentary below, published in today's Mail and Guardian (Johannesburg), gives an overview. -- Salih
The G8 Play God in Genoa
The agenda for the summit in Genoa this week of the seven richest countries -- joined by Russia to make the Group of Eight (G8) -- will include issues from both sides of the global economic divide. Preoccupied with their own economic well-being, they nevertheless wish to be seen as compassionate about the global poverty at their door that they can no longer ignore. Those seated around the table represent little more than one-eighth of the world's 6.2-billion people. But they account for almost two-thirds of the world's annual income. Together they have a decisive influence over international financial institutions, including direct control of 46% of the votes in the World Bank and 48% of the votes in the International Monetary Fund (IMF). The G8 members similarly control other powerful international institutions, such as the World Trade Organisation (WTO). In short, the G8 represents a sort of global minority rule, largely dictating the architecture of the world's political economy. The European Commission also participates in these meetings, giving representation to some smaller European countries. Asia's only representative is Japan. And the rest of Asia, Latin America and Africa are entirely unrepresented, though these regions comprise the majority of the world's population and nearly all of the world's poor -- those earning less than $2 a day. Although their decisions may mean life or death for tens of millions with no seat at this table, there is no global body that can demand accountability from the rich-country leaders. Increasingly, however, world public opinion is monitoring the words and actions of the "Global Eight". Spurred by demonstrations, global civic networks and press coverage of topics such as Aids and debt, an international movement for global justice is emerging to provide a counterweight. African countries, equal in population to the G8 but with only one-fortieth of their income, will be watching the Genoa meeting closely for action on cancelling poor-country debt, supporting greater global investment in health, education and other public goods, and addressing developing country concerns on international trade rules. Despite their impoverishment and in the face of the worst plague in human history, sub-Saharan African countries are nevertheless paying out more than $13-billion in debt service a year to wealthy creditors. Meanwhile, the debt reduction initiative launched by the G8 two years ago in Cologne has shown negligible results. The key to making more resources available in Africa to fight Aids is cancelling the debts owed to the World Bank and the IMF. So far the rich countries have evaded the issue of cancellation. The same rich countries have also demonstrated a brutal unwillingness to finance the war against Aids. Total pledges for the global health fund proposed by United Nations Secretary General Kofi Annan may top $1-billion by the end of the G8 summit. But much of that is for future years and so the commitments still add up to much less than one-tenth of the estimated $10-billion a year needed to fund prevention and treatment efforts that could end the pandemic. The richest countries do not yet consider making public investments in addressing global problems as obligations to provide their fair share for the common good. The rich countries have repeatedly promised to provide 0,7% of their gross national product for overall official development assistance for poorer countries. Although five small European countries now meet the target, not one of the G7 members reaches even half that figure. The United States ranks at the bottom, with only 0.1% of gross national product going to development assistance, and the Bush administration plans even further decreases in US commitments. Amazingly, the mantra of the G8 is simply that greater world trade will eventually benefit everyone. African and other developing countries are divided on whether the WTO should open a new round of trade talks. But they are united in their concern that issues of intellectual property rights and patents not be allowed to cripple efforts to cope with the Aids pandemic and the wider global health emergency. Whatever happens in Genoa, these issues will not go away. The same rich countries will also be the key players in the IMF/World Bank meetings in Washington later this year, the WTO meeting in Qatar in November, and the meeting on global development finance in Mexico in March. Increasingly, whenever and wherever they meet, the question posed will be whether the G8 will respond to the needs of the world's majority or whether it is merely a vehicle for exercising minority rule within a system of global apartheid.
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