By Glenn Ashton · 12 Jul 2008
Looking at the annual gathering of G8 leaders, one could be forgiven for believing that the real reason behind these meetings is to address global concerns. But it is not. The G8 is nothing more than a meeting where a great deal of political posturing takes place to present the image of a sympathetic west.
Phantom aid is a neat concept coined by Action Aid to describe the kind of aid given to the developing world by Western powers. Action Aid’s clarification of the flow of international aid money, more aptly depicts a picture of money that doesn’t reach the developing world at all, but that gets stuck in a system designed to recycle most of the money within western countries. Up to 61% of aid money remains in the West, going up to 90% in the case of France and the United States.
The phantom aid report was released almost three years ago to coincide with the G8+5 Summit, an important summit that included the participation of emerging economies where poverty in Africa, was high on the agenda. Indeed it was at the G8+5 Summit that US$25 billion in aid was promised to Africa by 2010.
However, we have learned from the recently concluded 2008 G8 Summit in Japan that in total, the G8 has only delivered US$3 billion of the USS$25 billion it committed to Africa in 2005.
The One Campaign reports further that this year’s G8 summit has emerged with an "agreement to provide $60 billion over five years to fight disease globally, although a large sum, does not reflect a substantial increase in real terms. This is the same $60 billion announced at the last G8 in 2007 without a time line attached".
The failure to prioritize Africa’s development is a story that goes much deeper than the West simply being lazy about allocating sufficient funds to aid.
Let us examine the G8 summit that took place in Germany last year. According to Avi Lewis, the official story at this G8 Summit was that leaders of rich countries were meeting to discuss African development through a combination of aid and debt relief. At this meeting, as with others before it, the same old picture of northern money flowing southward was painted yet again on the G8’s canvas of care.
It is simply not true that money flows from the North to the South, contends Lewis. In fact, quite the opposite happens. When you add up all the cash that wealthy nations send South and compare it to the money going in the opposite direction, you find that more money is leaving poor countries than arriving; and according to the United Nations, at last count, the difference was more than 780 billion dollars in one year, says Lewis.
Summing up his critique of the 2007 G8 Summit, Lewis argued that the poor have paid the rich more than two trillion dollars for the privilege of staying poor.
It is clear that the inefficient aid industry – and industry it certainly has become – is not the only culprit contributing to Africa’s burgeoning poverty problem. Unfair trade is equally, perhaps more to blame.
Lewis indicates the important relationship between the extraction of Africa’s mineral wealth, conflict on the continent and the role of international trade. While the West calls for good governance and a stable investment climate in Africa, "conflict and profit are getting along just fine on the ground", he says. Four million people have died in the Democratic Republic of Congo’s conflict, while oil, diamonds and gold continue to be trucked out.
So as the G8 pats itself on the back yet again this year for its commitment towards eradicating the world’s problems, we should be asking questions that delve behind the genuineness of the promises that they make.
What good is the recently pledged US$10 billion to tackle the global food crisis through agricultural development when the Doha round of trade relations stalled largely on the question of agricultural trade and the over-subsidisation of Western farmers?
This is just one example, but farming subsidies to American cotton farmers have all but killed the cotton farming industry in Mali where poor African communities have now become more vulnerable to conflict and terrorism. At the same time, we hear that in the United States, the 2008 Farm Bill is expanding the subsidies that America can provide to its agriculture.
In the coming weeks, anti-poverty poverty campaigners will be turning their attention to the forthcoming WTO mini-ministerial meeting that is due to take place on 21 April 2008; and is aimed at trying to resolve some of the sticky points of the Doha round.
Amongst the many issues that need to resolved at this meeting, Robert Kuttner reports that "Over a hundred developing countries want an amendment to the WTO’s patent laws to prevent the misappropriation of their genetic resources and traditional knowledge by companies that patent these resources and knowledge. But most developed countries resist this".
Despite the rhetoric of the aid industry, it is the actions of the trade industry that reveal the true intentions of rich Western nations. Much will be revealed in the upcoming WTO mini-ministerial meeting.
The G8 and its leaders can continue churning out phoney pledges, but unless Western powers stop putting their own interests before the interests of poverty eradication, we will continue to live in an unequal global society, driven increasingly further apart by the grossly unfair system of 'business as usual'.
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TRADE NOT AID
Aid is not what societies that wish to remain psychologically healthy need. What they need is fair trade and then they will be able to lift themselves up through their own skills and abilities.