Social Watch’s Basic Capability Index: G8 fails to meet responsibility for MDGs

According to the recent Basic Capabilities Index (BCI) published by Social Watch, at the current rate of progress universal access to a minimum set of social services will only be achieved in 2108 in Sub-Saharan Africa, a delay of almost a century with regards to the target date of 2015 set by the so-called Millennium Development Goals. Rich countries committed themselves to do their part in creating an enabling global economy and assisting poor countries for it to happen.

Unless the pace of progress is substantially speeded up, by 2015 the average level of social development in most of South Asia and Sub-Saharan Africa will only have advanced to a very low level. All other regions of the world, except for Europe and North America, will still be far from achieving an acceptable level of social development.

Social Watch, an international network of more than 400 civil society organizations, launched this index on poverty and deprivation in coincidence with the G8 summit, which will bring together the leaders of the world’s most powerful countries in Heiligendamm from 6 to 8 June. “The world’s wealthiest countries have made very little progress in fulfilling their side of the agreement and allowing a majority of the world population to work their way out of poverty,” stressed Social Watch co-ordinator Roberto Bissio.

Most developing countries, including the poorest among them, continue to receive minimal foreign aid while struggling under the burden of foreign debt and confronting unfair trade conditions that keep them from rising out of poverty. In 2002, the developed nations reaffirmed the pledge they had made in 1970 to allocate 0.7% of their national income to official development aid (ODA). Nevertheless, current ODA spending falls far below this level. None of the G8 countries has fulfilled this commitment to date. The United States devotes 0.17% of its income to aiding developing countries, while Italy allocates 0.2%, Japan 0.25%, Canada 0.3%, Germany 0.36%, France 0.47% and the United Kingdom 0.52%.

The Social Watch figures show that half of the world’s countries score within the low, very low or critical categories of the basic capabilities index, and are unable to ensure coverage of minimum essential needs (health, education an others) for most of their population. The BCI is used to evaluate and compare situations of poverty at a national, provincial and local level, based on three basic indicators: the percentage of children who successfully complete the fifth grade, child mortality under five years of age, and the percentage of births attended by skilled health personnel.

Signal before G8: Federal government announces increase in German development aid

As anticipated the German government announced before the G-8 summit was convened that it would significantly increase its development aid. As (nearly) all papers reported, development aid is to be increased by EUR 750 million each year until 2011. This is intended as fulfilment of its 2005 commitment to increase the German ODA quota from its current 0.36% to 0.51%. The federal government will finance this in part by means of so-called innovative financial instruments, e.g. auctioned CO2 emission rights Chancellor Merkel proposed. The latter is expected to generate EUR 350 million.

The announcements by Chancellor Merkel in Bild and by overseas development minister Wieczorek-Zeul to the Süddeutschen Zeitung are the first specific figures after a long series of generally similar declarations. To that extent it is the first substantive indication since the 2005 Gleneagles summit after it had appeared that the German government remained far behind on its promises. With the significant quantitative top-up of development aid, the need for qualitative improvement and reform becomes more obvious.

As praiseworthy as the German initiative certainly is, it is just as uncertain or even unlikely that the hoped for signal effect will occur and the other G-8 partners inspired to similar announcements at the Heiligendamm summit. Only this would really give the lie to the thesis of the "G-8's broken promises". It is clear that the new German ODA initiative does not diminish the other criticisms of German G-8 policy, primarily substantive in nature: unwillingness to accept reform of the summit structure, overemphasis on the private sector in Africa policy, The one-sided attitude toward innovation and investment protection of the North and the general habit of the G-8 to preach a lot but to do little to clean its own stables. For a critical analysis of the German G-8 policy from this perspective, see the recent article by Rainer Falk and Barbara Unmüßig (>>> German G8 Politics on the Eve of Heiligendamm).

Guest Comment: Four points for the G8 to act on finance

By Martin Khor

1. Curb speculation. The world is on the brink of a new global financial crisis. There has been not action by the G8 to regulate the speculative flow of funds, and new dangerous forms of speculation, carried out by hedge funds and through derivatives etc, have emerged. The G8 must now act to control hedge funds and derivatives, and regulate the flows of hot money and speculative funds. Hedge funds should not removed from the agenda.

2. Fundamental changes to the Bretton Woods institutions should be initiated. The IMF should not involved in policy-based lending to developing countries. It has a very bad record with the adverse effects of its conditionalities. The World Bank should also be reformed by lending only for projects with sustainable development criteria for its project loans. The governance system of both institutions must be fundamentally reformed, so that the developing countries have fair voice and representation. The September 2006 measure relating to the IMF is clearly insufficient and in some ways detrimental.

3. Deepen and widen debt cancellation. The move to cancel debts of some developing countries should continue. The G8 must not lose momentum on debt relief and cancellation. Debt cancellation must be extended to more countries including middle-income countries. Also, a mechanism for debt restructuring and rescheduling should be set up for countries facing debt-repayment problems, in which these countries can suspend their debt payment until a debt rescheduling scheme is worked out.

4. Aid should be reformed to really serve development needs, and the volume of aid should increase, as promised in previous G8 summits but not realised. Aid volume has instead declined in the past year. There should be an increase in aid for example for R and D and innovation for medicines for diseases that especially affect developing countries. Such R and D funds should be linked to medicines that will not be patented as the funding comes from the public sector. The medicine prices can be controlled to a low level so that they are accessible to the poor.

Martin Khor is director of the Third World Network, Malaysia. This comment is taken from his presentation to the Civil G8 Dialogue (25-26 April) in Bonn. We will report.

Oxfam Poll: Majority of Germans favour doubling of development assistance

71% of Germans consider it important that the federal government keep its promise to the developing countries and double its official development assistance (ODA) by 2015. That is the result of a representative opinion poll commissioned by Oxfam Deutschland. Oxfam sees this poll result above all as a signal to the German government. It should “submit a concrete plan for meeting its financial commitments in the coming years” as soon as possible, according to Reinhard Hermle, former spokesperson of the Association of German Development NGOs (VENRO) and currently development policy consultant to Oxfam Deutschland.

According to the poll, conducted by TNS Emnid Institute, 82% of those surveyed consider poverty in the developing countries an important or a very important issue. It also shows that there is substantial mobilisation potential among German citizens. Thus 72% would sign a petition calling on the federal government to do more against global poverty. 53% would support a charity and 30% would possibly participate in a demonstration for more and better development aid.

However, according to recent OECD figures the European Union and its member states will have to sharply increase their ODA if they want to keep their commitments. Although EU-ODA rose substantially in 2006, a quarter of this increase was due to adding one-time debt cancellation for Iraq and Nigeria. If the debt cancellations are factored out, four EU members gave less in 2006 than in 2005.