Monday, 11 June 2007

G8 Summit: a total farce?

For Oxfam it was a failure to deliver, and for Bob Geldof “a total farce”. But was last week’s G8 outcome for Africa really that bad? For sure, little of the money announced for Africa was new, and the restated resolve by G8 leaders to meet their 2005 commitments comes against a backdrop of painfully slow progress on delivery.

But the NGO reaction – by focusing on money - misses one of the most significant achievements of this G8. That is, to a far greater extent than previous G8 Summits, the world leaders have recognised that – as in every economy – it is growth and private enterprise that offers the best long-term opportunity for making poverty history.

The most striking finding of a World Bank survey of 60,000 poor people was that the vast majority see self-employment, starting a business or getting a job as offering the best prospects for escaping poverty. African’s, themselves, are sick of hearing their continent being talked about in the language of charity, poverty and despair, urging instead for the focus to be shifted towards creating the conditions for enterprise, trade and employment.

The business community made this point clearly in advance of the Summit (in a letter to Chancellor Merkel, at the Africa Business Forum 2007 and in the publication “A Path to a Prosperous Africa”). It is therefore refreshing, though clearly less headline-grabbing, that the G8 framed its discussion on Africa within the topic of “Growth and Responsibility”.

The emphasis, though lacking many detailed commitments, was on the elements needed to stimulate growth, enterprise and investment: good governance, with a clear statement that the Africa Peer Review Mechanism “can serve as an effective tool only if its results are recognized and implemented” (a swipe at South Africa’s recent rejection of APRM’s recommendations?); support for the Extractive Industries Transparency Initiative (EITI) and an extension of its transparency principles to other sectors “where appropriate”; a reaffirmation of support for the Infrastructure Consortium for Africa; support for African countries’ efforts to improve the business climate, including through initiatives such as the Investment Climate Facility; and activities to strengthen financial markets and enhance the effectiveness of remittances. Special mention is also made of agriculture, with the G8 urged to increase support for the Comprehensive Africa Agriculture Development Programme (CAADP). Interestingly, the statement also mentions that the G8 Presidency is “planning a business leaders' campaign, including an investment conference aimed at improving Africa's image as a ‘continent of opportunity’”.

The big outstanding issue is trade, and on this the G8 made some positive noises about their commitment to pushing for a deal by the end of the year, alongside a boost for Africa’s capacity to trade – which was as much as could be expected at this forum. But of course unless this is followed through, no amount of aid will be enough to offset the damage that a collapse in trade talks would cause.

Clearly, accelerating delivery on their Gleneagles aid promises is critical. But recognising that these aid commitments are only part of the story is as important – and it is one clear success that the G8 has recognised this fact.

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