Page last updated at 12:51 GMT, Friday, 10 July 2009 13:51 UK

Has the G8 done enough for the poor?

By Steve Schifferes
Economics reporter, BBC News

A Nairobi market
Developing countries have been hard hit by the global recession and rising food prices

World leaders have pledged an additional $20bn (£13bn) in aid to boost agriculture in poor countries at the end of the G8 summit at the Italian city of L'Aquila - $5bn more than originally expected.

It is part of a package designed to show that the rich countries are working together to ensure that poor people do not suffer in the global recession.

"Wealthier nations have a moral obligation to help," said President Barack Obama. "There is no reason why Africa cannot be self-sufficient in food."

Aid agencies say that poor people have suffered a "triple whammy" from rising food and oil prices and the economic downturn.

And World Bank president Robert Zoellick points out that the GDP of developing countries, excluding India and China, is expected to fall by 1.6% this year, and "most developing countries are not in a position to borrow and spend to reverse the downward spiral".

Growing hunger

The UN estimates that the number of malnourished people has increased over the past two years and will reach one billion this year.

A woman does her washing in a Kenya slum
Given the G8's smoke-and-mirrors approach to its aid commitments, the announcement needs to pass several tests
Tennille Bergin, World Vision

But the head of the UN's Food and Agriculture Agency, Jacques Diouf, says that the aid falls short of what is needed.

"Certainly, it's not enough," he told the Reuters news agency. "But compared to where we were, it's a big jump."

The FAO points out that the percentage of foreign aid devoted to helping agriculture has fallen from 17% to 5% since 1980.

"You don't develop a sector by cutting resources," Mr Diouf added.

Details of the deal, and the time-frame for delivery, are still sketchy.

Aid agencies are sceptical about the form the aid might be delivered in. They fear that the deal might allow private charitable aid to count as part of the total.

Foreign aid by G7 countries

"Given the G8's smoke-and-mirrors approach to its aid commitments, the announcement needs to pass several tests," says World Vision's Tennille Bergin.

"Is it new money? How much will be loans through institutions like the World Bank? And is it going to the poorest, most-affected countries?"

Their concerns have been fuelled by the fact that G8 leaders have not fulfilled their promises, made at the Gleneagles summit in Scotland in 2005, to double aid to Africa.

Broken promises

World leaders in Gleneagles, 7 July 2005
The Gleneagles Summit agreed to double aid to poor countries

The advocacy group One, set up by Bob Geldof and Bono after that summit, says that the G8 has only delivered on one-third of the aid promised - with Italy particularly lagging behind.

Mr Geldof publicly upbraided Italian Prime Minister Slvio Berlusconi for the cutbacks in Italian aid, asking, "Where is your credibility?"

The organisation says that sub-Saharan Africa needs at least $25bn.

Nevertheless, the emphasis on helping small farmers to improve agricultural productivity would be a major shift, especially for the US, which supplies 25 times more food aid (shipments of grain by US farmers) than it supplies in cash to help farmers grow more food.

Many development experts believe that food aid undercuts local production and makes poor countries more dependent on foreign aid.

The plan is important to President Obama, who will be visiting Ghana in his first trip to an African country since becoming president.

G8 or G20?

ExCel centre in east London
G20 leaders in London agreed $1tn to boost the world economy

The G8 summit has had a strong focus on Africa this year, with African leaders from Nigeria, Angola, Algeria, Senegal, Ethiopia, and Libya taking part in the third day.

And the G8 is increasingly seeing its role as promoting dialogue with other big emerging market countries, with the G5 (Brazil, India, China, Mexico and South Africa) automatically invited each year - and also now take part in a regular series of meetings during the year (known as the Heiligendamm Dialogue Process, from the site of last year's G8).

In fact, leaders from 39 countries attended this year's G8 summit - more than attended the G20 London summit in April.

That meeting was widely seen as a symbol of the shift in world economic away from the rich countries, and the new emphasis on co-operation is perhaps an attempt by the G8 to maintain its relevance.

Professor John Kirton of the University of Toronto, says that the two bodies are "now required to define what the relationship between these two central clubs of global governance will be".

But argues that the failure of multilateral UN organisations such as the World Trade Organization and the IMF to play a major role in the world economic crisis, and the lack of any formal body to deal with climate change, makes the G8 and G20 more important.

In fact, the G8 has stuck to its separate agenda - which is much broader than the G20's emphasis on the financial crisis and its resolution. Its major focus was climate change, development and security, with any real update on tackling the financial crisis delayed until the next G20 summit in Pittsburgh in September.

However, some analysts say that the more countries that get involved in the decision-making process, the harder it is to reach meaningful deals.

Robert Fauver, who was a key official preparing the groundwork at G8 summits for President Bill Clinton, says that the more people in the room, the more complicated it becomes. "If you get above 10, it makes it too hard to get things done."

Nevertheless, French president Nicholas Sarkozy has suggested that in the future, the G8 might be transformed into the G14 (including the five big emerging market countries and Egypt).

If this is accepted by Canada, whose turn it is to organise the next G8 summit, that would be yet another symbol of the transfer of economic power across the globe.

Donor aid

The G8 countries are the US, the UK, Germany, Japan, Italy, France, Canada and Russia.



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