Hyped G8 Debt Forgiveness Deal Already Falling Apart

by Ulysses de la Torre

(IPS) UNITED NATIONS -- Speaking on the sidelines of a major UN summit Sept. 15, British Prime Minister Tony Blair warned that the much-touted debt relief deal negotiated at the June G8 meeting in Gleneagles, Scotland is in serious danger of being scuttled.

The G8 agreement, which promised to cancel the debts of 18 developing nations, with a possible increase to 38, was meant to provide debt relief for low and middle-income countries to help them achieve the eight Millennium Development Goals (MDGs) adopted by the General Assembly in 2000.

The MDGs include targets to improve health, water and sanitation, education, gender equality and the environment.

Recently, however, some European countries are trying to alter the terms of the deal to phase in its implementation, a measure that will hold back immediate funding for the countries meant to receive the aid.

"We are never going to be able to go as fast as the situation demands because actually it demands urgent action in every situation now. We are never going to be able to do everything that everyone wants," said Blair. "Let's just concentrate on getting these commitments delivered."

Appearing with Blair was artist-activist Bob Geldof, who said he was disappointed that the UN World Summit agenda "was not hijacked but suborned," drastically reducing the chances of success for many less-developed countries to achieve the MDGs.

Other observers have dubbed the Summit a "damp squib" because its outcome document -- after a flurry of last-minute demands for revisions chiefly by the United States -- has fallen far short of expectations.

The sentiments of the two men, who shared their thoughts during a joint press conference with Nigerian President Olusegun Obasanjo and European Commission President Jose Manuel Barroso, echoed those previously expressed by NGOs, civil society organizations and various other observers in recent days, particularly in their calls on other European nations to adhere to G8 Summit commitments that relieve Third World debt.

The G8 is made up of Russia plus the Group of Seven (G7) most industrialized nations: Britain, France, Germany, the United States, Japan, Italy and Canada.

"We need the Dutch and the Belgians to come along with us at the IMF (International Monetary Fund) and try and push through the great package of change on debt relief," Geldof said.

"They have very valid reasons, several reasons of why they may not agree with the package," he added, "but what is that in the face of Malawi, in the face of Niger, of the daily grind of sickening death, the pornography of poverty that parades across our screens every night?"

Despite his pointed references to Belgium and Holland, Geldof suggested that there is plenty of blame to go around in explaining how debt negotiations have slid so far.

"Who do I name? Who do I shame? Can the Japanese and the Americans and the Canadians and everyone else put a little bit more in the pot? Yeah. Can the UK? Of course. Everyone can. The shame is ours. The name is the world."

The four leaders also discussed the linkages between poverty, despair and terrorism, as articulated in President Bush's speech Wednesday to the General Assembly, and how they relate to the G8 proposal to train a 75,000-strong African peacekeeping force. Such a force, they said, would provide the stability needed to foster development in other areas.

Nigerian President Obasanjo drew attention to the stability issue in addressing proposals to implement a debt-equity swap in discussions about debt relief.

"What assets are Africans going to give up for debt forgiveness? Some countries in Africa don't have much in assets to give up at all. So what are you asking them to give up? The only thing left to give up is life," he said. "And that is why we are asking the world to live up to its responsibilities. We need stability in order to make progress."

Blair said that the peacekeeping force was necessary to maintain order in the face of the many structural problems facing Africa, in particular conflicts over resources.

But he said this peacekeeping force could not be implemented until the G8 debt deal is agreed upon, first in meetings this month at the International Monetary Fund and World Bank in Washington, and later at the Hong Kong round of the World Trade Organization, scheduled for December.

Blair vowed to do whatever is needed to keep the G8 agreement on schedule. "The fact is that everybody around the world at the moment is trying to call each other's bluff on this world trade," he said.

"We've got to start calling these bluffs and making sure that people understand that if we end up with a failure in December, that will echo right 'round the world -- and I'm not prepared to have that, at least not without a monumental struggle."