UNU Conference: Aiding the Bottom Billion

The discussion of compliance and policy delivery raised the question of the G8’s role in addressing extreme poverty. Professor Vesselin Popovski of UNU suggested that this issues is often complicated by conflict within developing states. His talk, “Waiting for Action for the ‘Bottom Billion’,” engaged the literature from Jeffrey Sachs to Paul Collier.

He challenged Sach’s notion of brining an ‘end’ to poverty, aligning more with Collier who sees extreme poverty as the important policy area. Collier submits that among the world’s population there are 1 billion rich, 4 billion improving, and 1 billion of extreme poor. Sub-Saharan Africa has a disproportionate amount of extreme poor, nearly 70%, while this level of poverty affects 58 countries.

Popovski outlined a number of poverty traps, two of note. First, the natural resources trap. One would think that abundance in natural resources would provide wealth for a nation, providing the ability to export for profit and employ many. However, in many cases, resources have been a curse as control of these resources have caused conflict, wealth accumulation by a small group and exploitation of lax labour standards. It seems off kilter that resource wealth has institutionalized poverty and this destructive abusive behaviour.

The second trap is conflict. Popovski engaged in this issue in detail. Africa provides a number of disturbing examples of this, as ethnically-driven conflict has prevented economic productivity. He asked, is the bottom billion poor because it fights civil wars or do they fight civil wars because they are poor? In most cases it is the second, which perpetuates the first, creating a troubling cycle of violence. This has had significant economic impacts, where one year of civil war often causes $50 billion in GDP loss. This, combined with the fact that non-combatants have become targets of violence is increasingly troubling.

What can the G8 do? Popovski identified four instruments available to major industrialized nations to engage in and prevent such economic traps in the developing world. First, Aid; economic growth is fundamental to reduce and prevent conflict but this cannot be done exclusively through foreign assistance. When aid surpasses 16% of GDP it has been shown to be counter-productive, creating dependency and reducing domestic innovation. If effective governance mechanisms pre-exist in the state, chances of aid success is improved. Second, Peacekeeping and/or Military Presence; foreign observation of military activity and peacekeeping among civil factions can promote a climate where economic activity can resume. This is especially important in civil conflict as wars among domestic actors last 10 times longer than wars between states. Third, Laws and Charters; international organizations – with the G8 as key members – are able to enact international pressure to force compliance of fragile or weak states. The overriding rule of law in the international system can at times supersede the lack of domestic institutions. Fourth, Trade Policy; this can be used to penalize or reward, but most successful are times when good behaviour is rewarded with market access. Trade policy can be used to reverse marginalization of developing countries providing avenues to wealth generation and retention.

Using these four instruments, the G8 can help to alleviate poverty and help poor states fall into the traps of conflict and wealth disparity. A multi-track approach, with a good mix of each instrument – appropriate to unique situations – where developing countries are treated with respect can be the most successful. Popovski tasked the G8 to adopt these tools as the world’s steering committee.

UNU Conference: Expansion, Outreach or Status Quo?

The morning session of the United Nations University conference on, Global Development Challenges, Desired G8 Responses: A G8-Developing Country Dialogue for the Hokkaido Summit, focused on a set of issues related to G8 processes and its policy compliance on health and development issues.

The first panel surveyed the G8 summit structure and processes, looking particularly at its history in evolving interests. Former U.S. economic sherpa Robert Fauver traced the G8 back to its economic roots, noting its performance has been strongest on building close economic ties among the group. He suggested that the group should not stray too far from its original purpose and charge relevant international organizations to tackle the social and political issues of the day.

Andrew Cooper introduced CIGI’s research on the G8 outreach process, centering on the functional issue of climate change as a purpose and mechanism for G8 reform. He noted that the Major Emitters Meeting (MEM-16) demonstrates the need for a wider cast of countries to be effective. Here, an expanded G8 also attains a level of legitimacy that it presently lacks as a body rooted in a past era.

Clemente Adibe of De Paul University reaffirmed that the G8 is an important institution not only for its members but also for the global South. He observed that the G8 has been where major international initiatives have originated as it has shown its ability to bridge between the developing world and the major international institutions. He submitted that there would be no G8 without a G77 of developing nations who have fought to bring their communal concerns to the global agenda. In this informal, leaders-based forum, individuals are able to be influenced and champion key issues. Over the last decade, health, development and aid have been important issues. The G8 has been able to assist developing country issues to be addressed in established international organizations. A change in the structure and function of the G8 risks losing this bridging mechanism and its place as the driver of the international system.

The last presenter, Zhu Jenjin of Shanghai International Studies University indicated that the successes of the Heiligendamm Process – to include new economic powers in the decision-making process – has proven the logic of G8 expansion. However, this must be done in a similar fashion as it is now, keeping the group as small as possible with a flexible agenda and informal nature. The HP, then, shares in the logic of the original G8, to amass the relevant countries on an identified set of issues. Yet, the legitimacy of the organization lacks without the inclusion of major African countries nor Muslim nations.

The divergence of opinions here are significant. Each believe in the importance of the G8 but see very different futures. Surprisingly, a G8 purist like Fauver and an African expert like Adibe agree more than any other – despite the shifting global order away from U.S. dominance, both see the maintenance of the G8 body as it stands to ensure the smooth management of major global issues. Cooper and Zhu, however, perceive that new international issues require an expanded G8 membership. Key to the CIGI research in this area, these questions promise to be important and ongoing to the next days of discussion.

Pre-G8 Summit Conferences

In partnership with the G8 Research Group of the University of Toronto, CIGI has sponsored three pre-summit conferences in Tokyo to examine the various issues on this year’s G8 agenda. These conferences have been organized by some of Japan’s leading organizations on international affairs and bring togeter some of the world’s leading experts on the G8. The conferences include;

Global Development Challenges, Desired G8 Responses: A G8-Developing Country Dialogue for the Hokkaido Summit
Tuesday, July 1, 2008 – Partner: United Nations University
This conference will explore the mechanisms of the G8 and how development assistance has played an important role in the last decade of summits. Of special interest will be sustaining economic development in fragile and post-conflict societies and how the G8 and international institutions can assist transitional states. This conference will be webcast live and archived at: http://c3.unu.edu/unuvideo/index.cfm?fuseaction=event.home&EventID=191

G8 and Global Security Governance: Japanese and G8 Approaches
Wednesday, July 2, 2008 – Partner: Keio University
This conference will explore in particular, the G8’s role in mediating and avoiding global conflict. Japan has been a leader in nuclear non-proliferation and the avoidance of nuclear conflict. This conference will explore how this element can be instituted by the G8 and how G8 security governance can be strengthened through the next presidencies of Italy in 2009 and Canada in 2010. The conference will include presentations from academics, security experts and government officials.

Pre-G8 Summit Conference 2008: Global Challenges, Global Environment, G8 Innovations
Thursday, July 3, 2008 – Partner: Center for International Public Policy Studies
The third and final pre-summit conference takes a wider lens, looking at the purpose and functions of the G8 process in the 21st century. Special attention will be paid to the challenge of addressing climate change. The keynote address will be delivered by former Japanese Prime Minister Junichiro Koizumi on “Innovation in Global Environmental Governance.” This session will assess the interaction between technology advances and policy-making, and will question whether a wider cast of members is needed within the G8 to address these modern policy challenges.

This blog will summarize conference activities and comment on running themes of the G8 agenda and the ongoing Heiligendamm Process of outreach dialogue. Log-in for the webcast of the UNU conference and add your comments to this discussion.

High Hopes for Toyako

No country devotes as much attention and resources to the G8 than Japan. For its last summit, hosted at Okinawa in 2000, the Japanese government assigned a budget of an about US$750 million for infrastructure upgrades, security measures and entertaining the worlds’ major leaders. This was a particularly lavish amount as it came in the middle of a banking crisis, but the hosts ensured that protocol was handled flawlessly.

This year will likely see the same sort of investment of effort and resources. The remoteness of the summit site – the beautiful lakeside resort in Hokkaido – eases issues of security and demonstrations management that have come to symbolize G8 summit imagery. Every minute detail seems to have been looked after. Gestures to mark the occasion range from the issuing of new 1000 yen coins to the formal recognition of the Ainu people – located mainly in Hokkaido – as indigenous.

Difficulties in meeting expectations appear, however, once we stretch the wish list to substantive achievements – easily exhausted by a wide set of pressing global issues. Many of these items are all too familiar to the G8, whether on security (Iraq, Afghanistan) and nuclear non-proliferation (North Korea, Iran) or African development and health issues (as rehearsed at the recent high profile Fourth Tokyo International Conference on African Development). But what is striking this year is the manner in which so many other concerns have jumped up so dramatically, notably the food crisis, soaring oil prices, or sovereign wealth funds.

Amidst this scattered agenda, a stubbornly persistent issue remains that of the environment generally and climate change specifically. For Japan to put this item at the top of the priority list is unassailably logical. The home-grown Kyoto Protocol remains the most tangible – if utterly unenforceable – global commitment to emissions reduction targets for key a group of countries. Technically and diplomatically, Japan has been hugely innovative in this area, bringing both the recent multilateral Kobe climate initiative and the clean technology fund concept prominently into play.

In advance of the summit, CIGI is sponsoring three conferences that will explore these themes in more detail. This blog will report on the research findings of these events, with special attention to how the Heiligendamm Process and G8 membership expansion can assist in enhancing the club’s legitimacy and efficiency.