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From The Socialist newspaper, 16 June 2005

G8 debt deal won't end poverty

Join the protests

MOST PEOPLE would have cheered the news that 18 of the world's poorest countries are to have their World Bank and International Monetary Fund debts cancelled. How could anyone justify the situation where for every dollar of aid granted to developing countries, more than $13 came back in debt repayment?

Henry Reeve and Gareth Davies

However, this new aid agreement is still just 3% of the $50 billion dollars a year that the Make Poverty History campaign is calling for. Many countries have already paid back more than they originally borrowed under earlier International Monetary Fund schemes.

So far the 'summit' meetings have changed very little. That's why tens of thousands of people will still be joining the protests at the G8 meeting in Gleneagles on 6 July or the Make Poverty History demo in Edinburgh on 2 July.

US President George Bush allocated the miserly sum of $674 million extra for aid - very small change for the world's largest economy. Compare this to the huge amounts of 'aid' Bush gave to some of the US's allies in 2004. $782 million went to Colombia ($630 million on military aid). $2.2 billion went in military aid to Israel; $1.3 billion on military aid to Egypt.

On average, $12.9 billion is spent by African and Middle Eastern states each year on arms, 86% of which come from the US, Britain, France and Russia (all G8 countries). One person a minute is killed by arms, so wealthy elites can profit from the export of arms, averaging in excess of $25 billion.

Meanwhile, a third of the world's people cannot afford essential drugs and the number of African children dying due to poverty-related diseases has risen to over 500 every hour. Only 10% of global health research is devoted to diseases that account for 90% of the world's disease burden, like malaria, which kills a child every thirty seconds.

The pharmaceuticals industry is becoming increasingly profitable (its rate of return of over 18% is more than 4% higher than commercial banks) as an ever-smaller number of ever-expanding companies control the global drugs market.

Voracious self-interest

The G8 summit has done nothing to curb the voracious self-interest of the world's richest, most powerful capitalist companies. That is bad news for the poorest people in the world.

In recent years more and more of aid given has been linked to forcing developing nations into privatisation. This has had devastating effects.

Britain's Department for International Development (DFID) has given up to 9 million a year to the Adam Smith Institute since 1997. This right-wing 'think tank' thought of such bright ideas as Thatcher's poll tax, privatising Britain's railways, and partially privatising the NHS.

The DFID gives the Adam Smith Institute more than countries like Liberia or Somalia received in aid. They paid them over half a million in UK aid money for organising a campaign to convince Tanzanians of the virtues of privatisation such as a video claiming: "Our old industries are dry like crops and privatisation brings the rain."

This rings hollow after eleven million South Africans had their water and electricity disconnected after privatisation despite a three million strong general strike with workers protesting: "We didn't fight for liberation so everything we won could be sold".

The struggle in Tanzania forced the government to pull out of IMF plans to privatise the water supply under British company Biwater. Workers can resist neo-liberal policies.

Aid given to multi-national corporations

Aid is also given directly to multi-national corporations. Since 1992, the World Bank has given over $6.9 billion dollars of public money to Halliburton, Chevron Texaco, Unocal, British Petroleum, Exxon Mobil and Petronas to build oil pipelines that are literally pumping the wealth out of developing countries.

As the IMF and World Bank force "free trade" upon poorer countries, Britain's government is providing a welfare state for the rich by spending 3.9 billion a year (more than enough to get all the world's children into school) on the Common Agricultural Policy (CAP).

Britain's richest man, the Duke of Westminster, gets over 896 a day from the CAP, whereas a single mother with two children, on the lowest income bracket, gets just 7 a day in family tax credit.

These huge subsidies (47 million paid to the biggest 224 farms) are pushing the prices of crops down, forcing more and more of the world's people into poverty.

What causes this catastrophic misallocation of resources? Within a system of private and undemocratic ownership of industry, economic decisions are made that maximise profit, whatever the consequences. In order to tackle poverty we must create a democratic socialist system, with an economy geared to need, including an international public health service and global provision of education.

If you agree with us, join us in protest at Edinburgh and Gleneagles!

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 16 June 2005:

G8 debt deal won't end poverty

Come and join 150 young socialists from all over Europe

Capitalism unbound: the oil industry

Is nuclear power the solution?

Hands off our education!

New Labour's sham democracy exposed

On the public sector front line

We won't see you in Courts!

Striking against the two-tier workforce

Saving Royal Mail from the vultures

Pakistan: Government clamps down on telecom protesters

Mugabe tightens his grip on Zimbabwe


 

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Related links:

G8:

triangleG8 Summit - what were the decisions?

triangleThem & Us

triangleNo to G8 austerity

triangleMarch against the G8

Poverty:

triangleKnife and gun crime a product of poverty and austerity

triangleBuild a working-class movement to force an election

triangleThem & Us

triangleWhat we saw

Debt:

triangleMass movement topples governor of Puerto Rico

triangleTheresa May admits tuition fees system is broken - but plans new attacks on students

triangleWhat lies behind the US-China trade war?

Aid:

triangleNo to fat-cat top judges' 59k pay hike - fight for decent pay for criminal justice workers

triangleDerby public meeting: Women's Lives Matter

Britain:

triangleWaltham Forest Socialist Party: The role of trade unions in the fight against racism in Britain

US:

triangleTrump, impeachment and the need for an independent workers' party

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