Rich nations face ‘credibility crunch’ as leaders meet to tackle global crises

“Half-way towards the Millennium Development Goals deadline, instead of coasting to victory the world is staring at defeat.”
Max Lawson
Oxfam Policy Advisor
Published: 13 June 2008

The credibility of G8 finance ministers will be tested this weekend as the world waits for more urgent and stronger action to tackle global poverty in the face of climate change and rising food prices.

Aid agency Oxfam International, which today launched its report “Credibility Crunch – Food, Poverty and Climate Change – an agenda for rich country leaders” says the ministers’ most urgent priority is to fill the US$30 billion hole in overseas aid. Failure to do this will cost five million lives, Oxfam says*. G8 leaders promised at Gleneagles in 2005 to increase aid levels by US$50 billion by 2010.

The report is being launched as G8 finance ministers meet in Osaka on June 13-14 to discuss African development and the food crisis amongst other issues. Oxfam says that after years of broken promises, rich country governments must not hide from previous aid commitments if they are to meet the Millennium Development Goals and keep their credibility intact.

Oxfam’s report author Max Lawson said:” Half-way towards the Millennium Development Goals deadline, instead of coasting to victory the world is staring at defeat.”

He said: “These are the same ministers who spent more than a trillion dollars in six months to bail out their own banks, but they cannot find a fraction of that to save millions of lives. With an economic recession looming, they must not make the poor pay the price by reneging on their aid promises.”

“The finance ministers must propose ambitious aid increases into this summer’s G8 in order to keep their promises and meet the challenge of the current global crises, so that a better future for everyone can be secured.”

On the food crisis, G8 leaders must also commit financial assistance and ensure that all the money – including the US$6 billion pledged at the Rome summit last week – comes on top of existing aid commitments.

Oxfam points to a similar situation for climate change, where a lot of the money pledged to help poor communities cope with the effects of changing weather patterns is simply being taken from existing aid budgets or instead being made in loans.

“Poor countries face a triple injustice,” said Vicky Rateau, head of Oxfam International’s delegation for this year’s G8 in Japan. “Not only do they have to pay the price for rich countries’ pollution, but the little money available to help them is being diverted from already promised and much needed aid. Finally, the crowning injustice is that they are being asked to repay this money with interest.”

Oxfam proposes an agenda into the G8 this year that includes:

  • A call to the G8 to stop burning food and start supporting poor farmers: Agree to freeze all new biofuels targets and urgently rethink existing targets as well dismantle subsidies and tax exemptions that provide incentives for the diversion of agricultural production. Oxfam estimates US$14.5bn is needed to scale up immediate assistance to at least 290 million people threatened by rising food prices, and a long-term plan to invest heavily into developing country agriculture systems. It is unclear whether the US$6bn pledged at the Rome Summit is new money or comes from existing aid commitments, and what is the time frame for its delivery.
  • Japan, France and Germany must scale up their aid spending to 0.7% of GNI. In 2005, rich countries promised to increase aid by US$50 billion annually by 2010. Since then, they have done very little to meet this goal, failing to reach it by a staggering US$30 billion. Rich donors must improve the quality of their aid and agree to monitor this under the UN.
  • Funds must be forthcoming to provide high-quality public services - health, education, water, sanitation – in developing countries. G8 countries should support plans for hiring 4.25 million health workers who are vital in the battle against poverty.
  • Urgent action is needed now to cut emissions so that we can minimize the impacts of climate change. The G8 must lead other rich countries by example by cutting carbon emissions year on year by 2015 at the latest***. Funds for poor countries to adapt to the impacts of climate change must be made available on top of aid and in grant form. Money must be made available through the UN fund so that it can be spent where it is needed most.

Vicky Rateau concluded: “If no action is taken now to seriously reduce greenhouse gas emissions, not only will it be a clear step backward in the fight to combat global warming, but the impact on the world’s poorest may be devastating. It could erase all the progress made over the last decades to tackle poverty.”

Notes to Editors

* Using the latest figures from the World Health Organization and UNAIDS, Oxfam has calculated that the US$30bn shortfall – confirmed by the OECD in April 2008 - could provide vital healthcare for children, mothers and those suffering from HIV and AIDS, saving five million lives in 2010 alone and reversing the spread of HIV and AIDS.

** Oxfam estimates that US$50billion is needed – on top of aid commitments – in adaptation funding so that poor countries – who are already feeling the impacts the hardest, can better cope.

*** Oxfam believes that in order to stay as far below to two degrees Celsius as possible rich countries must cut emissions by at least 25 to 40% from 1990 levels by 2020 and globally emissions must fall to 80% below 1990 levels by 2050.