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Saturday, April 1, 2023
HEILIGENDAMM, Germany, Jun 8 2007 (IPS) - The Group of Eight industrialised countries (G8) agreed to allocate 60 billion dollars in new aid to Africa in “the coming years”, to beef up the fight against HIV/AIDS, malaria and tuberculosis, and to improve primary education across the continent.
The group also ended the three day meet at this Baltic seaside resort without a compromise on establishing a binding code of conduct for hedge funds, which, with their highly risky speculative operations, experts say, tend to destabilise international financial markets, undermine growth in the real economy, and have the potential to provoke a major crisis among banks and other private financial institutions.
In a joint declaration on Africa released Friday, the last day of the summit, the G8 countries promised to “scale up their efforts to contributing towards the goal of universal access to comprehensive HIV/AIDS prevention programmes, treatment and care and support by 2010 for all.”
The statement says the aim is “developing and strengthening health systems so that health care, especially primary health care, can be provided on a sustainable and equitable basis in order to reduce illness and mortality, with particular attention paid to the needs of those most vulnerable to infection, including adolescent girls, women and children.”
In order to do so, the G8 promises to “continue… efforts towards these goals to provide at least a projected 60 billion U.S. dollars over the coming years, and invite other donors to contribute as well. These contributions will supplement efforts by African governments.”
Future German contributions will be equivalent to 500 million euros a year, up from 400 million euros this year and 300 million euros in 2006.
Additionally to the funding to fight AIDS, malaria and tuberculosis, the G8 leaders confirmed an extra 500 million dollars in 2007, as part of the “Education for All” project for sustainable development in Africa.
G8 leaders praised the agreement as “immense progress.” Outgoing British Prime Minister Tony Blair told reporters that the G8 has “recommitted (itself) to all the commitments… made a couple of years ago at Gleneagles. The important thing is we have set out how we are going to do them.”
“Both of us (the G8 and the African leaders) know that we have got a long way to go and a lot to do but the truth is there’s been immense progress made and probably one really important indication of that is that Japan has said that for next year’s G8, Africa is going to be right at the centre of the agenda and that’s got to be good news,” he added.
But the new aid package falls short of the promise made at the G8’s 2005 summit in Gleneagles to double official direct assistance for Africa by the year 2010. The G8 promised there to increase aid for all developing countries by around 50 billion dollars a year by 2010, which would mean spending at least 25 billion dollars a year in Africa starting in 2005.
Minister Wieczorek-Zeul said, “Germany is going to fulfil its promise; let’s see how the others act.”
In addition, the group could not agree on a common process for allocating the aid. The United States insisted on maintaining its bilateral programmes with African states for the bulk of its aid. But Wieczorek-Zeul said that a common process will be developed, “to avoid duplications.”
The G8 summit also concluded without an agreement on establishing binding regulations for hedge funds, a particular disappointment for Germany’s Minister of Finance Peter Steinbruck, who had advanced the idea of adopting a “code of conduct” for such speculative investors.
Although the lack of agreement on this issue came as no surprise, as opposition from the U.S. and British governments – under whose jurisdictions most of the hedge funds operate – had been known for months, it marks another frustration of the Heiligendamm summit.
The more so, since criticism of hedge funds has become so widely accepted. In an open letter, published just ahead of the G8 summit, a group of Socialist members of the European Parliament, together with a U.S. congressman, had called for more transparency and accountability of hedge funds to international financial markets, a strengthening of workers’ rights and the establishment of an international task force to draw up recommendations for regulatory action on speculative investments.
The group of European Parliament members, led by former Danish prime minister Poul Nyrup Rasmussen and Democratic U.S. Congressman Barney Frank, warned of the risks that private equity and hedge funds pose to “the real economy”, such as endangering long-term growth and job creation.
At a press conference in Brussels on Monday, Rasmussen pointed out that the top 20 private equity firms employ around four million workers and that their ownership of companies made them the “biggest employer in the world”. “The problem,” he argued, “is that they do not regard themselves as employers.”
He added that these funds were often only motivated by short-term profit maximisation, with “no respect for jobs, workers or long-term investment”.
Even hedge fund managers are beginning to admit that the present state of deregulation and lack of taxation upon the funds’ transactions is unacceptable. In an op-ed article in the London Financial Times, Nicolas Ferguson, chairman of investment group SVG, revealed that he and his peers paid “less tax than a cleaning lady.”
But the G8 ignored the parliamentarians’ criticism and avoided any mention of new regulation or a code of conduct.
In a joint declaration, the G8 simply said, “The assessment of potential systemic and operational risks associated with these activities has become more complex and challenging. Given the strong growth of the hedge fund industry and the increasing complexity of the instruments they trade, we reaffirm the need to be vigilant.”
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