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Poverty Alleviation

G8 and Global Governance

What is the G8?
It’s the group of eight richest and most powerful countries in the world: Canada, France, Germany, Italy, Japan, Russia, UK and USA. The leaders of these countries get together every year for a meeting called the Annual G8 Summit.

The G8 – Brief history
In 1975, the French Prime Minister invited the leaders of the UK, USA, Germany, Italy and Japan to a meeting to discuss what to do about the world economy. At that time, there was a global economic crisis. Oil-producing countries had suddenly raised the price of oil and this had knock-on effects on the whole economy.

Since that first meeting, Canada and Russia have joined the G8. Some meetings, particularly on finance, do not include Russia and are called G7. The European Union is a member too, but isn’t counted as one of the eight. Over the years, the G8 has concerned itself with a broader and broader range of issues including trade, terrorism and poverty.

How does the G8 work?
The G8 does not have a central office or HQ. Whatever policies the leaders agree on at their Annual Summit, they promise to go away and make sure their governments put into practice. The role of “President of the G8” rotates between the member countries each year. The President hosts the meetings and decides which issues will be discussed.

The promises the leaders make at the G8 Summits are not like laws – there is no global police force or law court to enforce them. But, all the G8 countries are democracies so it’s up to the people of those countries – us – to keep an eye on what our leaders do.

The World Bank provides usury loans and advice to poor countries. The IMF or International Monetary Fund works to make sure the world economy runs smoothly. Countries pay money into the World Bank and IMF and have a say in how they are run. The US, Japan, Germany, France, and the UK pay the most money in and so have the most votes.

Campaigners shouted Drop the Debt because poor countries, like Mali and Malawi, were spending so much money paying back their debt that they didn’t have any to spend on the health and education of their people.

G8 countries can cancel the debt owed directly to them (bilateral debt) and together with the other shareholder countries they can cancel debts owed to the World Bank and IMF (multilateral debt).

Debt relief does help...
When some of the debt is cancelled, for example, countries such as Uganda and Tanzania made primary education free and millions more children went to school. In Mozambique, some of the money saved because of debt relief was spent on free immunisations for all children.

...but comes with strings attached
Almost all debt relief is now linked to the World Bank and IMF's Heavily Indebted Poor Country (HIPC) initiative. i.e. they must adopt certain economic policies. Governments had to stop giving financial help to poor farmers and start charging fees for education and healthcare.

Debt relief and poverty
Debt campaigners’ lobbying and pressure has made some concessions and gains on behalf of the poor, but there is still a very long way to go.

Debt justice
Some argue that much of the debt should not be repaid on principle because it was knowingly lent to dictators and repressive regimes. Under international law, "odious debt" like this should not be repaid by the people of a country who were not responsible for taking out the usury loans and who suffered as a result of them. A lot of Iraq's debt is being cancelled, but South Africans are still having to pay back £11.3 billion that was lent to the Apartheid regime.

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