Last weekend the Group of Eight leaders of industrialized countries (G8) held their annual summit in the city of Heiligendamm, Germany. But, even as G8 Summits go, this one couldn’t have been more boring…or depressing.
Take the issue of debt. Earlier this year, a “vulture” fund—a fund that specializes in buying debt at market prices and enforcing in court, or otherwise pressing the debtor government into paying its full value—bought Zambian debt for 4 million and then was able to enforce in court a claim for more than 15 million. This could have been much worse absent heavy civil society mobilization. Zambia, a beneficiary of debt relief, is just one of many countries that have been stripped of their debt service savings by “vulture” funds. Vulture funds have been preying on developing country debts for more than 10 years. The savings Zambia was forced to pay to the fund could have been used to build hospitals or pay nurses. The practice is quite unjust and you would think it’s time for action. The G8 didn’t.
Or take hedge funds-unregulated funds that pursue high-risk strategies to obtain higher-than-average returns in financial markets. The German government was bent on seeing some regulation of hedge funds (which some government officials have dubbed as “locusts” preying on the economy). Since every year the host country holds large sway over the G8 agenda—and with many reports showing large parts of all markets and all citizens exposed to the predatory hedge funds (yes, mutual funds and government funds increasingly invest your money in hedge funds)-- there seemed to be a fair chance of regulatory progress. Central bankers on both sides of the Atlantic spoke in favor of regulation. Even US lawmakers sent a letter to President Bush bringing to his attention hedge funds’ impacts on the long-term prospects of U.S. companies and jobs. And yet, the G8 did nothing.
And that commitment to double aid by 2010 that grabbed headlines at Gleneagles in 2005? Guess what. This year aid is not only not on track, but has actually fallen compared to the year before. You may ask, “Didn’t Tony Blair have all G8 leaders sign personally?” Well, five of those leaders are now out of office. The incoming leaders were actively debating whether they would recommit to the target or not (they finally did).
In this dismal context, it is no surprise that the mere commitment to negotiate within the United Nations a successor to the Kyoto protocol was hailed as the biggest success. No commitment to prevent temperatures rising, no commitments to binding frameworks of any sort to stop emissions, and certainly no commitments to what would actually happen in the context of the UN.
This is the fate of our shared planet Earth, our very lives, and all they could agree upon was a commitment to negotiate within the UN. In the face of such a global issue that can only be solved through international cooperation, a negotiation at the UN seems like something to be taken for granted, a starting point, rather than something to be shown as the biggest achievement reached at the end of intense negotiations. Apparently it was naïve to expect so.
It’s a sad day for the G8 when agreeing to negotiate at the UN is the biggest achievement.
For a longer analysis of the last G8 Summit please visit http://www.coc.org/index.fpl/1090/article/10796.html.
Posted by Aldo Caliari, Director, Rethinking Bretton Woods Project.
Please read the article by Muyatwa Sitali a member of The Jesuit Centre for Theologiacl Reflection Staff in Zambia. He also shares alot of the views expressed in this article. www.jctr.org.zm
Posted by: Chilufya Chileshe | June 18, 2007 at 07:08 AM