Page last updated at 09:22 GMT, Monday, 11 July 2005 10:22 UK

Will G8 money match the rhetoric?

By Evan Davis
BBC Economics editor

Prime Minister Tony Blair
A thumbs-up from Tony Blair, but for many the jury remains out

It may have been the most unpredictable week many of us can remember.

But looking back at the Gleneagles summit and its measures to make poverty history, we can at least say the G8 leaders were reassuringly unsurprising.

No-one can claim the G8 summit, which concluded on Friday, saved the world. No-one can claim the G8 failed to act. The deal that was struck on Africa was the very one we could have expected the week before.

To summarise, the deal got nowhere on the issue of trade (and was never really likely to), but it made progress on debt relief and aid.

Big cheque

The G8 love to make their modest steps sound like giant leaps. They are adept at getting big headlines for little money.

A water vendor peddles water near a slum in Kenya
More G8 money has been directed at Africa's poorest

The debt relief package cost so little - maybe $1.5bn (860m) a year across all the G8 countries - we would normally barely feel that that kind of money was worth reporting.

A second debt package, specifically aimed at Nigeria, brilliantly involves Nigeria buying itself out of its debt, and thus writing a big cheque to western governments rather than us writing a cheque to them.

However, looking at the overall resources directed towards Africa by the West in the form of both aid and debt relief, the Africa Commission asked for an extra $25bn a year in 2010 compared to 2004, and that is what the G8 appears to have delivered.

So is $25bn a significant sum or not? Is it enough?

Here is my guide to whether the 2005 G8 summit was worth the trouble.

More for Africa

It isn't entirely appropriate to measure western efforts for Africa and the world in terms of the percentage of national income handed over in the form of aid. But it is probably the single best statistical way of capturing the effort if you want to put it in numerical terms.

And in those terms, progress was made.

G8 leaders gather at the end of the summit
The G8 leaders made little progress on trade issues

Before the round of meetings and pledges associated with the G8 in 2005, you could add up donor aid promises and get an overall aid level (to the whole world) of about 0.3% of national income in 2006.

What this 'Year of Africa' has done is raise new promises that add up to about 0.36% of national income for 2010.

One might therefore summarise the effect of all this year's work as being an uplift of 0.06% of national income going to poorer countries. That's the approximate difference between previous promises and the new ones.

As the basic rule of thumb is that half the increase in aid can be expected to go to Africa, essentially we have pledged an extra 0.03% of national income to Africa as a result of this year's extraordinary efforts.

That is the extra aid over and above what might have been achieved in the absence of this year's efforts.

Promises, promises

To put that in context, for someone on a typical British wage of 25,000 a year, 0.03% is 7.50 a year.

That doesn't sound a lot, but it also takes us back to the kinds of aid levels (measured in percentage of national income terms) that we had in the 1980s.

It does, of course, leave us far short of the 0.5% that was given in 1960; it is far short of the 0.46% sought by the Sachs Commission for the UN; and it is only half the 0.7% level promised in 1970.

And it has to be said that even what was achieved is still only a promise.

We have not yet achieved the previous promises of reaching 0.3%. And we are making new, bigger promises. The money is not in the bank.

So looking back at it all, if you were someone who marched in Edinburgh, or who went to Live 8 with a strong sense of hope, should you now be giving much credit to our leaders for that achievement?

Or should you feel slightly duped by a process that seems to have come up with the same old answers?

My judgement is that you can be content. A modest step forward is still a good deal better than the few steps back that have characterised recent years.

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