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Year 2005 No. 92, July 11, 2005 ARCHIVE HOME JBBOOKS SUBSCRIBE

The G8 Summit:

A Fraud Assailed from All Sides

Workers' Daily Internet Edition: Article Index :

The G8 Summit:
A Fraud Assailed from All Sides

G8 and Corporate Interest

Africa's New Best Friends

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The G8 Summit:

A Fraud Assailed from All Sides

The G8 summit at Gleneagles, in which it was declared that African poverty and climate change were placed top of the agenda, concluded with even Tony Blair admitting that the leaders of the world’s richest countries have not been able to "make poverty history" and have made no substantial progress on resolving the issue of climate change either. The decisions that were announced in the 32-page Gleneagles Communiqué have thus been criticised from nearly all sides. Apart from the G8 leaders, the most enthusiastic supporters seem to have been Bob Geldof, Bono and World Bank president Paul Wolfowitz. The Make Poverty History campaign itself issued a statement that demanded that the world’s leaders do much more to catch up with the aspirations and expectations of the world’s people; Christian Aid called it a "serious disappointment", while Kumi Naidoo, Chair of the Global Call to Action Against Poverty, concluded: "The people have roared but the G8 have whispered."

The Gleneagles Communiqué outlined an increase in "aid" to the world’s poorest countries of $50 billion and to Africa of $28 per year by 2010, confirmed support for the "debt relief" measures announced for 18 African countries last month and promised some measures to deal with preventable diseases in Africa, including providing "as close as possible" universal access to treatment for HIV/Aids by 2010. No agreement was reached on ending the export subsidies of rich countries that disadvantage poorer countries, and therefore no measures were taken to create a more equitable environment for world trade. In addition, the G8 countries announced that $3 billion will be provided for the next three years for the Palestinian Authority, a package that will be administered by the World Bank and will create all the conditions for further economic and political interference in Palestine.

As the Communiqué makes clear, the G8 countries have put Africa high on their agenda since the late 1990s, but it cannot be said that the involvement of the big powers in Africa has assisted in solving that continent’s problems. Indeed the major preoccupation of the big powers has been how to make globalisation work in Africa; that is to say, to create the conditions whereby the big monopolies and financial institutions can continue to plunder the continent. The Gleneagles Communiqué continues along this well-trodden path using both "aid" and "debt relief" as means to further open up African countries to political and economic interference by the big powers. Thus the Communiqué announces a whole raft of measures that will serve to increase external intervention in Africa: the training and supplying of African "peace-keeping" forces; increasing the effectiveness of sanctions; supporting "good governance" and "transparency" through a variety of means, including funding some bodies of the African Union itself; and interference in the economies of African countries by promoting a variety of so-called anti-corruption measures and economic reforms, many to be administered by such institutions as the World Bank.

All of these measures, including the demand for what is referred to as "good governance" and "transparency", are designed to facilitate the penetration of foreign capital and privatisation and thus to exacerbate the problems facing Africa. According to the Communiqué, "African countries need to build a much stronger investment climate" and naturally the G8 countries will do everything to help them, including promoting "partnership between the public and private sectors" and strengthening African countries abilities to meet the needs of the global market. Increased "aid" and "debt relief", the Communiqué announced, will only go to those countries that are prepared to accept the demands of the G8 to open up their economies and adopt political systems approved by the big powers. Even the poorest countries are now resisting this programme. All the Heavily Indebted Poor Countries that have qualified for "debt relief" have already been forced by the World Bank to accept massive privatisation programmes. In Tanzania, for example, the capital city’s water supply was privatised in a deal led by the British company Biwater. The Tanzanian government have since been forced to strip Biwater of its contract after the supply of water deteriorated.

There can be no doubt that some African countries have made great strides forward in recent years, but these have been made in spite of not because of the interference of Britain and the other big powers. At the same time, as recent events shown there is massive support for ending world poverty and for creating a different world in Britain and other countries. But the people must not allow their aspirations to be diverted or hi-jacked by those who claim to be able to solve the world’s problems. Rather they must keep the initiate in their own hands and step up their struggles so as to create the conditions to usher in the new world themselves.

Article Index



G8 and Corporate Interest

Mark Curtis*, July 9, 2005, The Guardian

The government will try to pull off a PR coup in the aftermath of the G8 summit by posturing as Africa's champion – hiding Britain's real agenda and how agreements on debt and aid will further impoverish the continent.

While the G8 agreement commits the richest countries to increase aid and write off the debt of 18 countries, it requires developing countries to pursue a raft of free-market policies. The G8 is united behind this agenda, which Britain has taken a lead in pushing.

Gordon Brown's new deal talks of the poorest and richest countries "each meeting our obligations". Poor countries' obligations are to "create the conditions for new investment" and "more favourable business environments" while "opening up trade". Only in return for these will rich countries provide aid and debt relief and open up their markets.

One might think that countries where poverty kills thousands every day have no obligations towards the rich. But in the world of Brown and the G8, they are to help western companies make more profits by pursuing policies that have increased poverty and inequality from Ghana to Zambia.

New Labour appears to be keen on debt relief because it is a lever to reshape the global economy for the benefit of private investors. It's a cheap strategy, too – last month's G7 finance ministers deal cut in aid what countries got in debt relief.

The new deal was recently morphed by spin doctors into a Marshall aid plan. Brown told a Chatham House audience that this was "a smart business proposition: enlightened self-interest at its best ... for the world economy to prosper and for the companies operating in it to have markets that expand, developing country growth is a necessity". Without this, rich countries were "unlikely to maintain the growth rates we have enjoyed over the past 20 years". Again, poor countries help western companies, at their own expense.

A March Treasury report on priorities for the UK presidency of the EU calls for "greater flexibility in product markets, labour markets and capital markets ... a new approach to regulation and "taking a lead in multilateral trade liberalisation". This is a strategy that would make Margaret Thatcher blush.

While Brown has been telling development groups of his commitment to Africa, he has given speech after speech on his pro-business policies. Last November, for example, he told the CBI that "rewarding enterprise is ... central to a renewed British national economic purpose".

Deregulation is to be applied globally. The white paper on trade states that "the UK government has a key role to play at the international policy level to ensure that ... the UK can compete in global markets – a more eloquent rendition of former trade secretary Patricia Hewitt's comment that "we want to open up protected markets in developing countries".

The G8 and British goal of free trade for poor countries deprives them of levers to regulate trade for development and is a recipe for deepening poverty. Brown's only concession is that poor countries should have time to adopt such policies. Richard Caborn, the former trade minister, explained that this "is the message we need to hammer home if we are to get the developing world to agree to another round of WTO talks" – i.e. further opening of their markets.

Here is where aid comes in. The Foreign Office was not joking when it stated in a 1958 file that aid was "a weapon in the armoury of foreign policy". The Department for International Development's (DfID) recent document, Partnerships with Business, states that most aid recipients "are commercially important to the business sector, not just as export markets, but also for sourcing inputs and raw materials, for foreign investment and joint ventures ... Business may become involved in the identification of key policy and regulatory constraints to the business environment." DfID's aid is "typically" used to "enable the private sector to invest with more confidence". This explains why tens of millions of pounds go to British companies to force water privatisation on poor countries.

Africa needs less aid like this. And less debt relief, if it comes with these conditions. And less trade with rich countries, if it is forced to open up markets.

The basic aim of British elites has traditionally been to help companies get their hands on other countries' resources. Secret 1960s files state that "we should bend our energies to help produce a world economic climate in which our external trade, our income from invisibles and our balance of payments can prosper". The key was to protect sources of raw materials in the Middle East and southern Africa by promoting "freer" global trade and "increasing our efforts to open up new markets".

Post-war planners never intended to allow African countries to be truly independent. After decolonisation, they sought to establish pro-western elites – like those who now welcome the G8 agreements – and impose indirect economic rule through levers such as aid. The Attlee government, which established the aid programme in 1948, drained millions from Africa to help Britain's post-war recovery. Current development policies are ways to control nominally independent economies in a post-imperial world.

G8 leaders favour private business interests, and their agreement is a vehicle to facilitate the corporate plunder of Africa. Britain's lead in this needs to be exposed and challenged.

* Mark Curtis, until recently director of the World Development Movement, is author of Unpeople: Britain's Secret Human Rights Abuses.

Article Index



Africa's New Best Friends

by George Monbiot, July 7, 2005, The Guardian

I began to realise how much trouble we were in when Hilary Benn, the secretary of state for international development, announced that he would be joining the Make Poverty History march on Saturday. What would he be chanting, I wondered? "Down with me and all I stand for"?

Benn is the man in charge of using British aid to persuade African countries to privatise public services; wasn't the march supposed to be a protest against policies like his? But its aims were either expressed or interpreted so loosely that anyone could join. This was its strength and its weakness. The Daily Mail ran pictures of Gordon Brown and Bob Geldof on its front page, with the headline "Let's Roll", showing that nothing either Live 8 or Make Poverty History has done so far represents a threat to power.

The G8 leaders and the business interests their summit promotes can absorb our demands for aid, debt, even slightly fairer terms of trade, and lose nothing. They can wear our colours, speak our language, claim to support our aims, and discover in our agitation not new constraints but new opportunities for manufacturing consent. Justice, this consensus says, can be achieved without confronting power.

They invite our representatives to share their stage, we invite theirs to share ours. The economist Noreena Hertz offers, according to the commercial speakers' agency that hires her, "real solutions for businesses and individuals. Hertz teaches companies how to be smart and avoid the frictions that surface when corporate interests conflict with private life ... the political right is not necessarily wrong." Then she stands on the Make Poverty History stage and calls for poverty to be put at the top of the agenda. There is, as far as some of the MPH organisers are concerned, no contradiction: the new consensus denies that there's a conflict between ending poverty and business as usual.

The G8 leaders have seized this opportunity with both hands. Multinational corporations, they argue, are not the cause of Africa's problems but the solution. From now on they will be responsible for the relief of poverty.

They have already been given control of the primary instrument of US policy towards Africa, the African Growth and Opportunity Act. The act is a fascinating compound of professed philanthropy and raw self-interest. To become eligible for help, African countries must bring about "a market-based economy that protects private property rights", "the elimination of barriers to United States trade and investment" and a conducive environment for US "foreign policy interests". In return they will be allowed "preferential treatment" for some of their products in US markets.

The important word is "some". Clothing factories in Africa will be allowed to sell their products to the US as long as they use "fabrics wholly formed and cut in the United States" or if they avoid direct competition with US products. The act, treading carefully around the toes of US manufacturing interests, is comically specific. Garments containing elastic strips, for example, are eligible only if the elastic is "less than 1 inch in width and used in the production of brassieres". Even so, African countries' preferential treatment will be terminated if it results in "a surge in imports".

It goes without saying that all this is classified as foreign aid. The act instructs the US Agency for International Development to develop "a receptive environment for trade and investment". What is more interesting is that its implementation has been outsourced to the Corporate Council on Africa.

The CCA is the lobby group representing the big US corporations with interests in Africa: Halliburton, Exxon Mobil, Coca-Cola, General Motors, Starbucks, Raytheon, Microsoft, Boeing, Cargill, Citigroup and others. For the CCA, what is good for General Motors is good for Africa. "Until African countries are able to earn greater income," it says, "their ability to buy US products will be limited." The US state department has put it in charge of training African governments and businesses. The CCA runs the US government's annual forum for African business, and hosts the Growth and Opportunity Act's steering committee.

Now something very similar is being set up in the UK. Tomorrow the Business Action for Africa summit will open in London with a message from Tony Blair. Chaired by Sir Mark Moody-Stuart, the head of Anglo American, its speakers include executives from Shell, British American Tobacco, Standard Chartered Bank, De Beers and the Corporate Council on Africa. One of its purposes is to inaugurate the Investment Climate Facility, a $550m fund financed by the UK's foreign-aid budget, the World Bank and the other G8 nations, but "driven and controlled by the private sector". The fund will be launched by Niall FitzGerald, now head of Reuters, but formerly chief executive of Unilever, and before that Unilever's representative in apartheid South Africa. He wants the facility, he says, to help create a "healthy investment climate" that will offer companies "attractive financial returns compared to competing destinations". Anglo American and Barclays have already volunteered to help.

Few would deny that one of the things Africa needs is investment. But investment by many of our multinationals has not enriched its people but impoverished them. The history of corporate involvement in Africa is one of forced labour, evictions, murder, wars, the under-costing of resources, tax evasion and collusion with dictators. Nothing in either the Investment Climate Facility or the Growth and Opportunity Act imposes mandatory constraints on corporations. While their power and profits in Africa will be enhanced with the help of our foreign-aid budgets, they will be bound only by voluntary commitments: of the kind that have been in place since 1973 and have proved useless.

Just as Gordon Brown's "moral crusade" encourages us to forget the armed crusade he financed, the state-sponsored rebranding of the companies working in Africa prompts us to forget what Shell has been doing in Nigeria, what Barclays and Anglo American and De Beers have done in South Africa, and what British American Tobacco has done just about everywhere. From now on, the G8 would like us to believe, these companies will be Africa's best friends. In the name of making poverty history, the G8 has given a new, multi-headed East India Company a mandate to govern the continent.

Without a critique of power, our campaign, so marvellously and so disastrously inclusive, will merely enhance this effort. Debt, unfair terms of trade and poverty are not causes of Africa's problems but symptoms. The cause is power: the ability of the G8 nations and their corporations to run other people's lives. Where, on the Live 8 stages and in Edinburgh, was the campaign against the G8's control of the World Bank, the International Monetary Fund and the UN? Where was the demand for binding global laws for multinational companies?

At the Make Poverty History march, the speakers insisted that we are dragging the G8 leaders kicking and screaming towards our demands. It seems to me that the G8 leaders are dragging us dancing and cheering towards theirs.

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