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Last Updated: Sunday, 5 June, 2005, 22:21 GMT 23:21 UK
Big push for a new world agenda
By Paul Reynolds
World Affairs correspondent, BBC News website

George Bush, Tony Blair
The PM is hoping to win concessions ahead of the G8 summit

British Prime Minister Tony Blair is flying to Washington for talks with President Bush on Tuesday.

He is anxious to narrow differences which are threatening the success of the G8 summit Britain is chairing in Scotland next month.

Mr Blair and his Chancellor Gordon Brown are pushing a new, post-Iraq war, peace agenda of increased aid for Africa and progress on climate control.

If Mr Blair can pull it off, it will help provide a positive legacy to balance the losses he suffered among British voters for his support of the US-led war in Iraq.

He must be hoping that this is payback time for him in Washington.

Sticking point

This is the British plan on Africa:

  • Write-off African debts to international financial institutions the IMF, the World Bank and the African Development Bank. This would save African countries $15bn over the next 10 years. This must be paid for by extra money, not money taken off future aid. And the money must go to education.

  • Launch an International Finance Facility (IFF) to raise $4bn for immunisation initially and a much bigger facility later. This would involve taking out loans in the bond market secured against pledges by rich countries, a kind of spend-now pay-later scheme.

  • Hugely increase direct aid. Double it if possible.

  • Give Africa and other developing regions much better trade agreements, cutting down in particular on export subsidies for farm produce from richer countries.

A major issue with the United States concerns what is called "additionality."

The US is happy to write off African debt, but it wants to take that into account when it provides aid in future.

Good governance

"The US plan is dastardly," said Max Lawson, a policy adviser at the British charity Oxfam.

"It wants to cancel debt but cut aid flows in future by the same amount. This would not provide one new school or hospital."

The American argument is that Africa needs much better economic policies - not open-ended amounts of aid - and that aid is best tied to good governance.

This policy is now enshrined in the Millennium Challenge Account under which countries wanting American aid have to apply for it and have their use of it approved.

The US does not like the percentage game and points out that it is already the largest foreign aid donor in cash terms

If the additionality argument is not bridged, grand statements at Gleneagles about debt having been written off will be a bit hollow.

Mr Bush is also opposed to the IFF, saying that he cannot commit Congress to future spending. American and other opposition has also led Britain to downplay an idea to sell surplus IMF gold to help pay for more aid.

Ideally, Mr Blair would also like Washington to commit itself to spend 0.7% of national wealth, to which the EU signed up recently, but that is a lost argument.

The US does not like the percentage game and points out that it is already the largest foreign aid donor in cash terms.

All this does not mean that there will not be some kind of agreement in Gleneagles. But it does mean that any agreement will be hard and must be examined closely.

Avoiding rows

The same goes for the other problem - climate control.

As is well known, Mr Bush is hostile to targets. He summarily dismissed the Kyoto agreement with the German Chancellor Gerhard Schroeder sitting beside him in the Oval Office.

The Blair hope is to bypass that kind of row and make progress in three areas:

  • A statement on the seriousness of the problem. This will be important to look at carefully to see exactly what is being agreed. Mr Bush will not want to sign up to what he regards as a suspect scientific consensus. The others will not want a weak compromise.

  • Agreement on common actions, especially those dealing with energy efficiency, clean power and new technologies. These are areas where American industry is interested - and so is Mr Bush.

  • A set of principles for the longer term. Again, the words might be waffle and will need examining.

This will not be easy either, if it is to mean anything beyond a quick-fix for a summit at which leaders will be under pressure to produce something.

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