How the G8 lied to the world on aid

[Briar]

(Apologies if this has already been posted. It is, of course, an all too familiar story.)

How the G8 lied to the world on aid
The truth about Gleneagles puts a cloud over the New York summit

Mark Curtis

World leaders are now preparing for the millennium summit to be held in New York next month, described by the UN as a "once-in-a-generation opportunity to take bold decisions". Yet the current draft outcome simply repeats what was agreed on aid and debt last month in Gleneagles. The reality of that G8 deal has recently emerged - and is likely to condemn the New York summit to be an expensive failure.

The G8 agreed to increase aid from rich countries by $48bn a year by 2010. When Tony Blair announced this to parliament, he said that "in addition ... we agreed to cancel 100% of the multilateral debts" of the most indebted countries. He also stated that aid would come with no conditions attached. These were big claims, all of which can now be shown to be false.

First, in recent evidence to the Treasury committee, Gordon Brown made the astonishing admission that the aid increase includes money put aside for debt relief. So the funds rich countries devote to writing off poor countries' debts will be counted as aid. Russia's increase in "aid" will consist entirely of write-offs. A third of France's aid budget consists of money for debt relief; much of this will be simply a book-keeping exercise worth nothing on the ground since many debts are not being serviced. The debt deal is not "in addition" to the aid increase, as Blair claimed, but part of it.

Far from representing a "100%" debt write-off, the deal applies initially to only 18 countries, which will save just $1bn a year in debt-service payments. The 62 countries that need full debt cancellation to reach UN poverty targets are paying 10 times more in debt service. And recently leaked World Bank documents show that the G8 agreed only three years' worth of debt relief for these 18 countries. They state that "countries will have no benefit from the initiative" unless there is "full donor financing".

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http://www.guardian.co.uk/print/0,3858,5268357-103677,00.html