G8: do the right thing, before it’s too L8

by Stephen Tall on July 9, 2005

The deal is done. After all the hype – the white wristbands, the Long Walk for Justice, the concerts, the Bob ‘n’ Bono Live 8 show – the communiqué was, today, signed and sealed (it has yet to be delivered) by the leaders of the world’s eight most powerful economic nations. Let’s be clear: a $50 billion boost in aid for developing countries is a result. Let us also be clear: the G8 had the chance to do a whole lot more, and flunked it for fear of the public reaction.

Some of you may have just performed a quick double-take: ‘for fear of the public reaction’…? The casual reader of last Sunday’s newspapers would have been in no doubt that everybody, but everybody, was united behind the ‘Make Poverty History’ campaign’s ambitions: ‘”We don’t want charity, what we want is justice”’ (The Observer), ‘Is that loud enough for you?’ (The Sunday Times), ‘5 billion people can’t be wrong’ (News of the World). As John Harris noted in his post-match analysis in the Independent: “… six million Britons have those white wristbands. As well as the audience and performers at Hyde Park, the campaign’s cheerleaders include almost all the Tory leadership candidates, the cup-winning Liverpool team, Jeremy Clarkson and Rupert Murdoch.”

So why would the G8 have been at all nervous that acceding to Make Poverty History’s demands would in any way upset their electorates? Because public opinion in rich nations like Britain is confused (at best) and hypocritical (at worst). We want to help developing countries; so long as it in no way impacts negatively on our own standards of living. The three stated aims of Make Poverty History, lest we forget, are ‘Trade Debt Aid’ – note the order of priority. Bob Geldof summed up the summit summat: “10 out of 10 on aid, eight out of 10 on debt”.

One crucial word, the sharp-eyed may have observed, is missing from his grading: trade. No date was set for the rich nations to end the tariffs and subsidies which cripple Africa’s economies, the biggest single step the G8 could have taken to help alleviate African poverty. Mr Blair argued for 2010, was rebuffed by his counterparts, and was able only to pledge vaguely that he was optimistic a date would be set at the World Trade Organisation talks in December. Here are three stats which illustrate why this issue matters so much:

    * The world’s least developed countries face tariffs four or five times higher, on average, than the richest economies.
    * Farmers in rich countries received $311 billion in assistance in 2001, six times as much as those rich countries’ development aid budgets.
    * The EU subsidised each cow in its member states by $913 in 2001. It gave away just $8 in aid to each sub-Saharan African.

The rationale for world leaders’ wariness in confronting the issue of trade is easy to comprehend, if not to forgive. The polling organisation YouGov undertook a survey of public perceptions of the crisis in sub-Saharan Africa in the lead-up to the G8 summit. The results make depressing, if unsurprising, reading:

    * 79% blame incompetent and corrupt governments, just 17% put the blame at the door of unfair trading practices of the developed world;
    * 80% think African countries are not doing enough to help themselves;
    * 53% support cancelling all or some of Africa’s debts, though only 38% believe it will make any difference.

But the killer questions was this: when asked if European farm subsidies should be abolished to help poor countries “even if that meant British farmers would lose out”, just 30% were in favour, with 44% against. Each of the leaders of the G8 nations will have received polling evidence revealing similar indifference among their own courts of public opinion. They will have done the math, and calculated carefully exactly how much political capital they dare expend.

There are two fundamental flaws in the thinking which prefigured the G8 protest rallies. The first was to believe there was ever any real unity in the disparate groupings briefly united under the Make Poverty History umbrella. Yes, I’ve no doubt everybody at Hyde Park, Murrayfield, the Eden Project et al believes in the eradication of hunger in a world of surplus. But, though the organisers made a blatant (and disingenuous) grab for the attention of the slacker Generation Y anti-globalisation zeitgeist, their real pitch was – quite rightly – to open up the world’s agricultural and manufacturing markets to global competition. I wonder how many cheers would have greeted that announcement at last Saturday’s Live 8 concert, even if it had been made by Robbie?

Only last month, French voters delivered a resounding ‘Non’ to the European Constitution, partly owing to their concerns that the EU’s increasingly liberalised markets threaten the scandalously inflated subsidies their inefficient farming practices attract. The Common Agricultural Policy, which accounts for half the EU’s entire budget, is a corrupt boondoggle directly responsible for the deaths of hundreds of thousands of sub-Saharan Africans. But there is a reason it still exists: it is popular with those European voters whose livelihoods it protects.

The second fundamental flaw is one of which many of us who believe in liberal markets are guilty: we fail to explain the positive benefits of that little understood, catch-all term of lazy abuse, globalisation. Globalisers believe in private property rights, free enterprise and competition; non-globalisers believe in state ownership, planning and protection. It is empirical that the former economic system works, often imperfectly; and the latter has failed always, everywhere. Along the way, globalisation has helped deliver:

    * higher average real income: in China, for instance, it has risen 440% (between 1980 and 2000);
    * higher average life expectancy: up from 55 years to 64 years (1970-2000);
    * greater adult literacy rates: up from 53% to 74% (1970-98);
    * fewer people living in extreme poverty: in east Asia, for instance, the figure dropped from 486 million to 279 million (1990-99);
    * less hunger: the average daily food supply has risen 24% (1961-99);
    * lower levels of child labour: the proportion of children (10-14 years) in the labour force has declined from 23% to 12% (1980-2000).*

The point about opening up markets to global competition is that it will benefit us all: the poorer countries most of all, because they have more to make up, but those of us in richer countries also. Consumers here will benefit from the lower prices for agricultural and manufacturing goods the eradication of tariffs will bring; while producers will diversify away from high-cost, intensive and inefficient production methods into other employment sectors. A 2002 World Bank report, ‘Global Economic Prospects and the Developing Countries’, estimated that liberalising trade would boost world income by $355 billion a year by 2015, of which the developing countries’ share would be $184 billion. Which rather puts that $50 billion in perspective.

We do not have to choose between treating the developing countries fairly, and continuing rises in our own living standards: we can all have our cake and eat it. It now requires the G8 leaders to hold their nerves and recognise that it is within their power to do the right thing for Africa, and for their own nations. It’s not too L8.

* Figures from Martin Wolf, ‘Why Globalisation Works’, pp. 138-72.