About the G-8
The group of Eight (G-8) is "the coalition of eight of the world's leading industrialized nations," to borrow the phrase from the Wikipedia, the free online encyclopedia. Its member states are France, Germany, Italy, Japan, the United Kingdom, the United States, Canada and Russia. It is not an institution. It has no constitution or charter. It has no permanent secretariat or headquarters. The membership of the G-8 has evolved over time to include the US, UK, France, Germany, Italy, Japan, Russia, Canada and the president of the European Union. Although the summit is more likely to influence the policies its member states adopt, it is not held as part or the whole of the process involved in making policies they adopt. It is important to be clear that the G-8 summits are not a policy-making forum. They are a time for the leaders of these states to network and build relationships. They are a time to discuss complex international issues and crises, to allow for a more powerful collective response. The presidency of the G-8 and the location of the summit rotate annually among its member states in the following order: France, United States of America, United Kingdom, Germany, Japan, Italy, Canada, and Russia. The heads of the G-8 member states, including the European Union will be attending this summit. Its member states assume presidency of the G-8 on January 1. The tradition of the G-8 summit is that the country holding the presidency hosts a series of ministerial level meetings before the summit begins. The traditional meeting of G-8 finance ministers is, in fact, the meeting of finance ministers of the G-8 minus Russia, as well as officials from the European Union. There is also a briefer "G-8+4" meeting for the finance ministers of the full G-8, as well as China, India, Brazil, and South Africa.
How Did the G-8 Evolve Over Time?
The 1973 global oil crisis and the subsequent global economic recession made the then global economy find itself in deep crisis. It was against this backdrop that the G-8 originally came into being as a group of six countries as part of the broader attempt on the part of the then major industrialized countries to make the then world economy free from this deep crisis. In 1975, French president Valery Giscard d’Estaing arranged for the heads of state of six major industrialized democracies to meet in Rambouillet, France with a view to developing the best possible way out of both the economic crisis that was then prevalent, and the potential subsequent economic crisis, and proposed regular meetings. It was the first summit of the group of major industrialized nations. They agreed to an annual meeting, and to organize it under a rotating presidency. The group of these democracies was dubbed the group of six (G-6), which included France, Germany, Italy, Japan, the United Kingdom, and the United States of America. Canada joined it at the behest of U.S. president Gerald Ford in the second summit held from June 27-28 in 1976 in San Juan, Puerto Rico, United States. After that, the G-6 became the G-7. The G-7 became G-8 when Russia joined the G-7 in the 24th summit, which was the first G-8 official summit, held in Birmingham, the UK from May 15-17 in 1998. However, Russia was not allowed to attend the meeting for financial minister as it wasn't a major economic power. Russia still lacks some of the preconditions required for being part of the G-8, which other member states want Russia to have. Wikipedia, the free online encyclopedia states that "on February 18th , 2005, United States Senators Joe Lieberman and John McCain called for Russia to be suspended from the G-8 until democratic and political freedoms are ensured by Russian president Vladimir Putin." It also states that "because the original G-7 are effectively the leading industrial democracies and the Russian economy (as well as democracy) is still struggling, there are still some G-7 sessions on economic affairs in which the Russians do not participate."
The Gleneagles Summit: Capitalism as the Solution?
The forthcoming Gleneagles summit is expected to discuss issues such as challenges of Africa, and climate change. Other announced items on the agenda are counter-terrorism, non-proliferation, and reform in the Middle East. Tony Blair, head of the hosting state of the Gleneagles summit, states in his "welcome message" on December 9, 2004, "I really want to focus on the challenges of Africa and climate change during our presidency. There are other issues that G-8 countries are working on together, such as countering the spread of material used in nuclear and chemical weapons, fighting terrorism, supporting social and economic reform in the Middle East, and joint activity to make international travels safer. I want the G-8 to push on with this work too, as well as other foreign policy priorities including, in particular, helping find a peaceful and sustainable solution to the Israeli/Palestinian conflict." As Mick Brooks says, "Tony Blair wants to go down in the history books as something more than a squalid war criminal. He is anxious to present the summit as an opportunity to deal with the burning issues of world poverty, disease and climate change."
On June 10 and 11, 2005, the traditional meeting of G-8 finance ministers, took place in London. On June 11, they agreed to write off one hundred percent of the $ 40 billion in debt owed by 18 highly indebted poor countries to the World Bank, the International Monetary Fund, and the African Development Fund. The meeting also agreed that twenty more countries with an additional $ 15 billion in debt would be eligible for debt relief if they fought corruption, and eliminated impediments to private investment. It had been hosted by British Chancellor Gordon Brown. For these agreements to take effect, they must be approved by the lending institutions. Given the past, it is not certain that these agreements reached on debt relief will take effect. "In 2003 at the Evian summit, the advanced capitalist countries decided to waive $ 100 million of the debt burden on a handful of highly indebted countries that had swallowed their nasty IMF medicine. It never happened," says Mick Brooks. As Oxfam complained, "the World Bank and its board continue to fail to deliver on its mandate and its vision, most visibly on debt relief." As Mick Brooks has put it, "This is like complaining about a tiger failing to deliver on its mandate to vegetarianism."
Because the forthcoming Gleneagles summit meeting is what Mick Brooks calls "a real summit meeting of world capitalism," which serves only the interests of the advanced capitalist countries. As Mick Brooks puts it, "for the issues of debt, for trade, and for aid, the G-8 is not the solution. It is the problem."
One of the main issues expected to be discussed in the forthcoming summit is third world debt relief. Third world debt may be thought of as part of the broader process involved in the development of world capitalism, which is lopsided, and therefore only benefits the richer countries. Mick Brooks argues that "debt is one of the main levers for keeping poor people poor." To substantiate this claim his argument involves, he says, "interest repayment represents a huge continuous transfer to rich nations and an unbearable burden on underdeveloped countries." Zambia spends more on debt servicing than on education. Malawi remits one third of its government budget to rich countries. This amount is twice what is spent on its own people's health. Sao Tome and Principe's debt is nine times their National Income (NI). Congo-Brazzavile groans under an incredible debt burden of nearly two times its NI.
The advanced capitalist countries have been using such permanent institutions as the International Monetary Fund (IMF), and the World Bank, which are essentially owned by them as a means of benefiting themselves at the expense of the poorer countries. As Mick Brooks has put it, "The IMF and the Bank are institutions designed to suck the lifeblood out of poor people living in poor nations."
"Just like other capitalist firms, they aim to maximize shareholder value- and that means making sure the lenders get their money back with interest," says Mick Brooks. They operate under essentially "neo-liberal" principles in the belief that the market can solely, and by its own nature, bring property to nations that practice free market competition. The IMF imposes a standard blueprint called Structural Adjustment Programmes (SAPs) on the poorer countries it gives loans to. There are many stories telling how SAPs impoverished many poor countries upon which the IMF imposed the SAPs.
One example of where IMF Structural Adjustment Programmes aggravated the problem is in Kenya. Before IMF got involved in the country, the Kenya central bank oversaw all currency movement in and out of the country. Mick Brooks says, "SAPs have been a disaster for the countries they have been imposed on. Argentina experienced a catastrophic economic crisis in 2001, which had been caused by IMF-induced budget restrictions, which undercut the government's ability to sustain national infrastructure even in crucial areas such as health, education, and security. Many other South American countries faced similar economic problems, which are attributable to the IMF's standard blueprint that we know as SAPs. The current – as of 2005-trend towards "moderate" left-wing governments in the region and a growing concern with the development of a regional economic policy largely independent of big business pressures can be seen as a result, at least partially of this crisis.”
Is debt relief lasting way out of the poverty trap the indebted poorer countries find themselves in? Since the beginning of the HIPC programme- HIPC stands for Highly Indebted Poor Countries- beneficiary countries have used some of the money saved on debt repayments for social programmes. For example, in Benin, 54 percent of the money saved through debt relief has been spent on health, including on rural primary health care and HIV programmes. In Tanzania, debt relief enabled the government to abolish primary school fees, leading to a 66 percent increase in attendance. These statements may fool us into thinking that this question can be rightly answered in the affirmative. These only suggest that debt relief may help the poorer countries reduce the severity of the poverty they are plagued with to some extent, at least for some days ahead. The answer is not difficult. One does not need to be extremely perceptive to answer this question. "So long as the terms of trade continue to move against the poor countries and as long as world trade is rigged against them, then debt relief will give no lasting way out of the poverty they find themselves in," says Mick Brooks.
The terms of the trade continue to move against the poor countries. This results in Inter alia, the collapse in the prices of the things they sell to the advanced capitalist countries. Five grams of tea sell in the west for £ 2. This means a kilo costs £ 400. Nestle and the other big processors buy that bag for just £70. Just 0.2% of the price of a cup of coffee bought in London goes to the growers. The WTO is the third institution the advanced capitalist countries use as a means of impoverishing the third world. It imposes "free trade" on poor countries. It forces them to open up their markets.
Haiti, for example, was forced to allow US grains to be imported into it. The grain that poured in from the USA was exported by agribusiness heavily subsidized by the American taxpayer. The result was that thousands of peasant farmers in that country lost their livelihoods. Farming is subsidized in the west to the tune of $ 1 billion a day. $ 1 billion is shelled out to 25,000 cotton farmers – that's $ 160,000 each, which is more than their crop is worth. This has a negative impact on the competitive strength of the poorer farmers from the poorer countries. Moreover, Europe's common agricultural policy not only keeps out third world produce but also subsidizes European producers. The forthcoming Gleneagles summit is not expected to take into account these things, which have a lot to do with the attempt to ensure that the poorer countries become free from the problem of poverty.
The forthcoming Gleneagles summit will discuss third world debt relief, among other things. According to Oxfam, if things continue to go on as they are now in Africa, by 2015, 45 million more children will die; 247 million more people will be living on $ 1 per day or less; 97 million more children will not be in school; 53 million people will be without proper sanitation. It is impossible to prevent such things from happening if the advanced capitalist countries force the poorer countries to swallow what Mick Brooks calls "nasty IMF medicine."
Whether the forthcoming summit will help the African countries plagued with abject poverty get rid of it or not, depends upon to some extent, whether it will decide to not force them to swallow the nasty IMF medicine, which has essentially taken them to their present pitiable condition. But, unfortunately, the forthcoming 31st Gleneagles summit will be "essentially" no more than an opportunity to further develop and strengthen world capitalism, which serves only the interests of the advanced capitalist countries.
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