The G-8's bottom line on helping poor nations

5. Who picks up the tab when debts are canceled? How much will this cost Americans and other citizens of the "wealthy" nations?

It depends who the creditor is, but in most cases, when debt is written off, the burden is borne by taxpayers in the creditor country. With the cancellation of debt to the IMF and World Bank, there has been concern that these lending bodies will be starved of capital to make future loans.

The onus of replenishing their coffers will fall on rich countries that provide much of the funding to these institutions. The US share of the debt write-off is estimated at $1.75 billion over 10 years - less than a dollar per year per person.

6. Which countries stand to benefit? How is the G-8 ensuring that more "odious debt" does not ensue?

Initial beneficiaries of last month's debt announcement are 18 of the so-called heavily indebted poor countries (HIPC) initiative: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda, and Zambia.Another nine countries are close to qualification and a further 11 have yet to get to first base on account of concerns over governance, war, instability, or all three.

This initiative has enabled the rich world to audit aid flows. The US, in particular, insists on tying aid to good governance. President Bush said before the summit that he wanted a partnership with Africa and "that's different than a relationship of check-writer." He told the Times of London, "We've got obligations and so do the people we're trying to help."

Aid agencies argue that it takes two to create the conditions for corruption - one paying the bribes and one taking them. But economists say that some good has been done by trying to ensure that cash - from debt relief, aid, or other development projects - is used judiciously.

"It is my impression that there have been improvements - particularly with arrangements and mechanisms to monitor the way that foreign exchange saved from debt write-off is used," says Prof. Robert Wade, an expert in development at the London School of Economics.

7. What about aid?

Debt relief is just one part. Britain also wanted to double aid donations to $100 billion a year, via two methods.

First, it has urged rich countries to meet commitments made 35 years ago to earmark 0.7 percent of national income to aid - and has secured a pledge from European countries to do so by 2015.

Second, it has proposed the International Finance Facility (IFF), which allows nations to borrow money using future aid budgets as collateral. The US opposed the IFF. A pilot plan to fund vaccinations for babies will launch this summer. Another idea is to channel receipts from an existing tax on air travel to the aid coffers.

8. What about trade?

Development experts say that trade - the third item on the British agenda - is even more vital to Africa's prosperity than aid and debt relief. Without fairer trade rules for African exporters, they argue, aid and debt relief just treat the symptoms - not causes - of poverty.

"Trade is crucially important," says Rich-ard Tarasofsky, a sustainable development expert at the Royal Institute for International Affairs in London. "If one wants to have sustainable economic growth in Africa and other developing countries, there needs to be an effective trade-liberalization package."

Developing countries say that the global trade system is stacked against them through rich-world subsidies, particularly on agricultural goods, and other barriers to markets. Yet rewriting the rules is complex and controversial - as proven by one failed round of World Trade Organization (WTO) talks in 2003 and recent rows in Europe about scrapping farm subsidies. Indeed, at Gleneagles, G-8 summiteers may decide to defer to a WTO ministerial conference in Hong Kong in December.

9. What else is on the G-8 agenda?

Blair wants to galvanize action on climate change, but consensus will be difficult, given Bush administration skepticism about global warming.

Officials have haggled over the text of the final communique to be issued in Scotland, with Americans reportedly unhappy at wording that links definitively the evidence of global warming with human activity. Bush has said he will give little ground in Scotland. Blair admits that there will be no persuading the US to reconsider the Kyoto treaty that aims to limit emissions thought to raise global temperatures.

Page: 1 | 2