Good, but not great

Jul 8th 2005
From The Economist Global Agenda

Leaders of the Group of Eight countries have concluded their summit in Gleneagles with a series of communiqués, despite the London terrorist attacks that disrupted the meeting. Though the declarations are not as bold as activists had hoped, they nonetheless represent progress on poverty in Africa and—to a lesser extent—climate change and global economic imbalances

WITHIN hours of the blasts that ripped through London’s transport system on the morning of Thursday July 7th, Tony Blair was on television telling the world that despite the horror of the attacks—which left dozens dead and hundreds wounded—the summit of the Group of Eight leaders being held in Gleneagles would go on. The British prime minister said it was clear that the explosions had been timed to coincide with the summit. It was “particularly barbaric”, he noted, that terrorists would attack Britain when the leaders of the world’s richest nations were trying to hammer out solutions to some of the world’s biggest problems, including a big new development initiative for poverty-stricken Africa and a policy programme to deal with global warming. The G8, Mr Blair promised, would not allow terrorism to disrupt this good work. True to his word he kept the summit on track, though he himself left the meetings for several hours in order to assess the situation in London.

The summit had already attracted a great deal of attention from activists, who tried to pressure the G8 into undertaking big new initiatives with a series of concerts and demonstrations in the week running up to the event. World leaders outside the G8 also flew in, in the hope of facilitating deals they deemed critical. Mr Blair, who had promised robust action on climate change and African poverty when he assumed the presidency of the G8 in January, was hoping to deliver something bold enough to satisfy them.

He failed in this, though not completely. The flurry of communiqués delivered by the G8 on Friday—an hour early, so that Mr Blair could return again to London—was, of course, long on well-meaning talk, short on concrete details like targets and timetables. But at least some progress was made in one or two key areas.

African poverty, which received the most attention in the run-up to the summit, also saw the most tangible progress. The G8 announced that it will double overall aid to roughly $100 billion a year by 2010, with about half of that going to Africa. Campaigners professed themselves pleased with this increase, though some claimed that the delay in new funding would cost millions of lives.

Africa is not the only area getting help. The G8 also pledged new aid to the Palestinian Authority (PA), in the hope of giving a boost to the Middle East peace process, which has gone nowhere since talks collapsed five years ago. Mr Blair said on Friday that G8 leaders had agreed to a new package that would give up to $3 billion to the PA in years to come. This should help to shore up the new Palestinian president, Mahmoud Abbas, who was elected in January after the death of Yasser Arafat. Mr Abbas has worked hard to consolidate his power over the fractured Palestinian territories, a precondition of making a lasting peace with Israel. Putting more cash at his disposal to alleviate the suffering of an angry, impoverished populace can only help.

On climate change, though, the progress was glacial. The G8’s communiqué acknowledged that human activity is causing global warming, and that the current state of scientific knowledge justifies trying to slow, and eventually reverse, the process. But intense lobbying by America kept the actual commitment to do anything tepid. The G8 vowed to “act with resolve and urgency”, but did not go into specifics about what that action would be, or when it might be undertaken.

Even empty words are important

Nonetheless, as G8 summits go, this one was pretty effective. America at least agreed to allow the group to acknowledge man-made global warming, a concession big enough to make France back off from its threat to issue a separate communiqué on climate change that excluded the United States. And $50 billion-worth of new aid is big news from a summit that usually specialises in the most general of generalities.

Moreover, while the overwhelming majority of climate experts are undoubtedly disappointed that the G8 chose to punt on the issue of global warming, some poverty experts will be glad of a more measured pace of aid dispersal than previously proposed. The evidence that aid alleviates the misery of poor people in the developing world is at best mixed: dumping billions of dollars more into countries run by corrupt and/or incompetent governments may simply further entrench the dysfunctional institutions that have strangled African development for so long.

The heads of state also made a few pledges that—however vague—are sure to put smiles on the faces of those who study the wider world economy. There was agreement on ending the rich-world agricultural-export subsidies that aggravate rural poverty in the developing world (though, alas, no agreement on when). And the summit tackled the global economic imbalances which, if unchecked, could lead to a “hard landing” that would deepen economic hardship in poor countries as well as rich ones. Along with considering steps to ease the tight oil market, the G8 outlined macroeconomic policies that will gladden the hearts of fretful economists, including structural reform in Russia and the European Union, broad-based macroeconomic changes in Japan, and fiscal discipline in America in order to raise its abysmal national savings rate. It is unlikely that all, or even most, of these goals will be achieved in the near future. But as Alcoholics Anonymous will tell you, admitting you have a problem is the first step towards recovery.

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