Transcript
MR. JAMES STEINBERG: Good morning and welcome to Brookings.
For our friends from the White House press corps, the lineup here this morning may look a little familiar. It's G-8 time again, and the only difference is we're sitting here relaxed and casual as opposed to harried as we get ready for the plane, and there's no seal of the President in front. But we're very fortunate this morning to have a lineup of veterans from G-8s, past and present, including two of my colleagues from the White House who served in key capacities of preparing Presidents before for G-8 summits. So you have a chance to get some insight not only into the specifics of what is going to go on in Canada next week, but also to the extent you're interested some insights on what it means to get a President ready to go and do a summit.
One of the things that's going to be interesting about this, and which I have great envy and admiration for our successors as Sherpas, perhaps the most notable thing about the summit from my point of view is that there will be no communiqué. Since most of what Sherpas do in preparing for summits is labor in agonizing ways over communiques, this is a major breakthrough which I applaud the leaders for having achieved.
But in other respects I think the summit will be very similar to what we typically see in G-8 summits, which is a lot of preparation for issues that leaders want to cover, most of which will not be discussed in great detail because overtaking events will become the dominant feature of the discussions. That's obviously one of the reasons why we're glad to have Martin Indyk here to join us today, because I think it's indisputably the case given what's going on in the Middle East that however much it figures on the formal agenda, that issues like the Middle East will figure prominently in the leaders' discussions.
The organization of the summit is designed to focus on three basic issues: counterterrorism, global growth in trade, and Africa and development issues. I'm going to talk a little bit about the terrorism issues on the summit, then I'll turn to Lael Brainard and Gene Sperling to talk about the economic and development issues, then Martin will talk about the Middle East.
On terrorism, it's not surprising given the Administration's focus on this, counterterrorism will be a central theme at the summit.
I think we're going to see several elements of the discussion. First, there will be some form of a high level statement, perhaps in the form of a chairman's statement reiterating the common commitment to fighting terrorism in all its forms and cooperation and the like. There will be a ratification of a rather longer statement that came out of the Foreign Minister's meeting at Whistler two weeks ago which goes into more detail about areas of common cooperation including commitments to the process that was started in the UN under Security Council Resolution 1373 where all the countries are supposed to report on their efforts to deal with terrorism and perhaps moving forward on what some have been calling the Adopt A Country approach to building the war against counterterrorism where the more advanced countries that have intelligence, law enforcement, financial expertise can work with countries that have a greater problem in dealing with counterterrorism, take them under their wing, share technical assistance and the like.
One notable initiative on the terrorism front will be what is called the Transportation Security Initiative in which the G-8 countries will make commitments and probably in a fair degree of specificity, and perhaps with a time table on specific measures that they are going to undertake to deal with securing the transportation system including aviation security and cargo and other elements of the transportation network.
Related to the terrorism problem but an issue which goes back to many G-8 summits in the past, there will also be an initiative on trying to accelerate the effort to dispose of excess plutonium in Russia. The formula that has been talked about is called the 10+10+10 formula which is designed to get all the countries of the G-8 together to provide $10 billion over 10 years to accelerate the plutonium disposition efforts. Although I think that it's unclear at this point whether that will be the formula that's adopted. Some in the Administration have been talking about simply trying to get an up-front $1 billion pledge of new money to move forward with this.
It's an old issue, it's been around for a long time, there have been a lot of commitments in the past by the G-8 to deal with this so it remains to be seen whether this represents a real fresh infusion of commitment and funds, but it certainly is and ought to be a priority.
Let me stop with that on the counterterrorism front and turn to Lael.
MS. LAEL BRAINARD: The general nature of G-8 summits is they're usually a mixture of laboriously planned initiatives and late-breaking news associated with crises.
In the crisis category it's no doubt going to be more in Martin and Jim's realm. The more laboriously planned initiatives are really on the economic side.
This G-8 meeting intends to place major emphasis on addressing poverty and disease in Africa. Just in terms of the nature of the G-8, this represents an important shift. Back in the mid 1970s when the G-8 was initiated, the real focal point on economics was coordinating macroeconomic policy among the leading economies of the world who were grappling with this really difficult problem of inflation and unemployment.
As we went into the 1990s the center of focus really became how to integrate Russia and to help the transition in Europe and the former Soviet states.
What we saw starting in 1998 with a very significant debt forgiveness initiative is that the G-8 has been increasingly moving closer to addressing the activist critique of globalization, even as they distance themselves from the activists in physical terms.
So this year what you see is Prime Minister Chretien has invited leaders of five African nations to sit down for a full day and brainstorm around the New Partnership for African Development.
The process of inviting African leaders was initiated actually in 2000 at President Clinton's last G-8 summit and it's been continued ever since. This is the first time that you see a full day.
What clearly Mbeki and others from Africa are hoping, is that they are initiating a Marshall Plan-like process, where they come up with their own internal commitments to reform, where they work amongst themselves to deepen regional integration, and in return the West and the richest nations come forward with money, with investments, with greater trade access.
The G-8 promised last year to respond to this initiative with a plan of action, and the question this year will be how much is actually on the table.
One of the most interesting features of the plan in terms of the African side is they have developed their own set of governance criteria and a peer review mechanism, and that is really quite innovative. There's a question as to whether the G-8 will be happy to live with the Africans' own self-review or will develop their own criteria. The latter seems to be more likely at this point.
In terms of initiatives that we've already started seeing, at the G-7 Finance Ministers' meeting, agreement was finally reached on replenishing IDA, the International Development Association, which is the part of the World Bank that loans to the poorest countries, in return for a pledge to convert between 18 and 21 percent of the money into grants from loans. The Americans agreed to a replenishment that could make $2.2 billion available. So that was important.
Secondly, the infectious diseases crisis in Africa will be addressed, no doubt. Last year the G-8 promised to make significant contributions to the Global Fund. Already we saw President Bush yesterday announcing an additional $300 million into the next fiscal year over and above the $200 million that has already been appropriated in this year's supplemental. It is intended to be focused on mother to child transmission. I think you've seen the response from the activist community has been that's good, but it's really not enough compared with the estimates coming from Kofi Annan of $10 billion cost per year. So far it looks more on the order of $1 billion from the donors.
There was also an agreement at the Finance Ministers' meeting to finalize funding the HIPC Initiative, the debt relief initiative for the Highly Indebted Poorest Countries. That is essentially fulfilling past commitments rather than going further.
One area that is quite front and center this year is universal education, which Gene will talk in greater detail about. Here we have a pattern that we've seen in recent years, which is that international organizations, Jim Wolfensohn in this case, came forward with a plan to really address the set of goals that the international community has embraced as being effective important goals. They have embraced the goal of getting all children in the developing world into primary education programs, girls and boys alike, because it has such a multifaceted impact on development.
Wolfensohn is coming forward and saying this is how much it's going to cost me to fast track 23 countries. In this case $3 billion. The estimates overall have been $5 billion. We have heard word of a Bush Administration announcement that falls far short of that. It's good, it is a commitment to this area, but again, the gap between what is needed to really achieve the millennium development goals and what is on the table so far is somewhat disappointing I think to the activist community.
The good news here is that there's an emerging consensus among the international community about what are the things that should be funded, that are effective to be funded. There's a multifaceted set of development goals that are mostly in the social sector, health, education, clean water, sanitation. And at the G-8, the summits are being used to focus energy and attention around getting them funded.
The bad news is the funding falls far short, and there's likely to be squabbling this year with some of the members of the G-8 trying to encourage the Bush Administration to earmark half of the $5 billion increase that he's announced for development funding to go just to Africa. There will be resistance on the part of the Bush Administration to do that kind of earmarking.
A final issue is the world economy. Under that rubric leaders generally discuss everything from recovery in their own economies to exchange rates. Don't expect them to come out of their meetings and talk about exchange rates, although no doubt there will be some talk about what's going on with yen-dollar and euro-dollar rates in the meetings. But where we might hear some controversy coming out of the meetings is on the trade issue. And in particular with some other members of the G-8 and African leaders both questioning the Bush Administration. We had a very strong result in November, a commitment to go forward with a Doha Development Round which would really address developing nations' concerns in a more central way than has been done before. And subsequent to that we have seen in the United States both a steel safeguards measure, which puts the Bush Administration at odds with the European Union and Japan, and big new funding for the agricultural sector in the United States, which really puts the Bush Administration at odds with many of the developing countries that we had worked with to improve the agricultural negotiating terms in Doha.
So the Bush Administration is going to be a bit on the defensive on these issues in these meetings and we may hear a little bit of that coming out.
MR. GENE SPERLING: I'm going to focus on one of the areas Lael mentioned which is education.
As Lael said, there has been great anticipation, particularly among the activist community that the Canada summit would be for education for all, what essentially Cologne was for debt relief which was the moment that the developed countries really converted on a very clearly defined global compact. There's been considerable activity and I'd say at this point there is still considerable uncertainty as to how much that will take place.
Just a tiny bit of background, 1990 was the first time the world came together in Thailand and said we should reach universal primary education by 2000. As it became clear that that was going to be a failure, the world reconverged in Dakar in the year 2000 and reset the goal for 2015. I think it also reflected more of the kind of compact, social compact or global contract that Lael was referring to where the countries would come forward with their own plans that they take ownership up with monitorable goals, and that assistance would follow a commitment to reform.
Following Dakar, however, the concern was that there was again no active financing framework as it existed in debt relief to make this a very certain or to encourage developing country head or state to think that if they move the ball forward in education they would get assistance.
Into that breach came the World Bank which therefore tried to, as Lael mentioned, lay out a financing framework. So I think one has to mention probably the after-effects of September 11 in having motivation on this. The world watching the Taliban banning girls going to school, the Madrasas in Pakistan, I think all of these put increasing momentum behind the importance of universal education.
So what the World Bank did was come forward with a financing framework in which they tried to talk about what the developing country essentially contract would be, how much of their own domestic resource mobilization they would have to do, and they put forward certain frameworks that they would have to put 20 percent of their budget into education. Half of that would go to primary education. Other kinds of standards like that.
The big thing that they did was to actually, as Lael mentioned, fast track a certain number of countries. The idea there was to try to make this global compact real by actually showing a particular number of countries with progress, so that that would provide incentives to the other countries as well.
One of the things the World Bank did which I think drew universal applause was they focused on completion instead of enrollment. When they focused on how many children were actually completing school they found that 88 developing countries were lagging behind. So what they did is they chose 18 of those 88 countries that they thought were ready to be fast tracked and then an additional five large countries that includes Nigeria and Pakistan which were kind of put on the on-deck circle for larger discussion.
So the big question that kind of emerges was would the G-8 follow up on that momentum. And the real question that people are looking at really comes two-fold. One is would there be a kind of major contingent funding commitment? Would they put up enough funds to both fund these initial 18 fast track countries and to show that there was a commitment to doing the other countries as well, assuming that they made the substantial reforms that were necessary.
The second major area is would there be coordination. In debt relief there has to be coordination by design. You can't do debt relief unless the developed countries coordinate. In education this has been much more controversial so far.
Each of the countries has expressed an interest towards education, [Trathian] put it on the agenda. As you know Blair's campaign theme was education, education, education and his focus on Africa. And obviously in the United States President Bush and Secretary O'Neil and Secretary Powell all have expressed a particular lifelong passion towards education.
Nonetheless, the clear question for the global contract is would they actually get together and coordinate their bilateral contributions? Nobody at this point is looking for them to pool money together into a single pool such as the Global Health Fund. The question is would the countries all say we're going to put up a certain amount of money and coordinate to make sure that all of these 18 fast track countries are coordinated, are funded, and that has really been the major question.
I would say that probably, as Lael said, among the activist community there is a bit of disappointment at the moment. The Bush proposal that is expressed in The Washington Post would only go for Africa from 100 million to 200 million over five years, just to give you a sense. That's 20 million additional a year. Twenty million is about what it costs to build a major high school in the United States. And it's probably about 1/20th or 1/30th of what the World Bank estimates is needed for Africa for universal education.
So again, the real question going forward is that each of these countries have expressed an interest in development and education. What is less clear at this moment is whether they will use the G-8 as it was used in debt relief in Cologne as a moment to come forward and have a very clear global compact.
And let me say the reason why this is considered important by many of us who work on this issue is that most developing country head of states, unlike debt relief where they know exactly what they have to do and believe if they make certain reforms they will get assistance, education is the other extreme. There's quite a bit of skepticism. Very few head of states believe that if they take reform efforts they will get assistance. So the reason this becomes important is whether or not you get a very clear global compact going forward.
As Lael said, there's been quite a bit of momentum going with the World Bank meeting, and the question now is whether the G-8 will kind of seize that or whether each country will kind of individually express its kind of bilateral concerns but not actually come together and endorse something like the World Bank education for all plans.
MR. STEINBERG: Thank you Gene.
As Lael said there's the planned part of the program and then there's a breaking events part of the program, and here to lead on breaking events —
MR. MARTIN S. INDYK: It wasn't meant to be like this. The President was to give a straightforward speech providing some structure to the vision of a viable Palestinian state living alongside a secure Israel. The G-8 was then supposed to endorse its principals, the launching of diplomatic efforts by the Secretary of State to convene a Foreign Ministers conference, not a summit, which would it was believed suffice to put the Israeli-Palestinian conflict back in the box and allow the President to get on with the real work of toppling Saddam Hussein.
But the Israeli-Palestinian conflict doesn't fit into a neat box and the Bush Administration finds itself yet again in the position of playing catchup, doing too little too late and then facing the hard choice of doubling its engagement or being blamed for the failure of its half-hearted efforts.
It happened with the Tenet plan, it happened with the Mitchell recommendations, it happened three times with General Zinni's initiatives, it's happened twice with the Secretary of State's visits to the region, and now it will happen with the President if he gives the speech that the press is talking about today.
I think the problem was captured perfectly in a piece by Aluf Benn in this morning's Ha?Aretz which you can look up on the web page. He quotes Shimon Peres describing the Bush Administration as constantly wavering between the Arab oil barrel and the Jewish vote. As a result, the speech is turning out to