BUSINESS ANALYSIS: Brown shifts G7 goalposts with poverty agenda

Razzmatazz and British fare for Chancellor's bid to address African debt and aid

FINANCE MINISTERS from the world's richest nations will not know what has hit them when they fly into London today for their regular quarterly meeting.

The winter meeting of economics chiefs of the Group of Seven (G7) is normally a dull affair, usually held in an off-season holiday resort in the host country with minimal access to the public and media.

This year, though, it is Britain's turn to take the chair and, being a general election year, Gordon Brown has not missed an opportunity to make it a headline event. Rather than squirrel it away in Eastbourne, the Treasury is hosting the event in London, kicking it off with an enterprise conference.

This jamboree, akin to a mini-version of last week's gathering of global business leaders in Davos, features keynote speeches from the chief executives of some of Britain's biggest companies.

While the ministers' meetings will take place in Lancaster House - a highly secure government building - the giant QE2 centre will host the conference and the media.

This comes as little surprise given the mammoth expectations built up by Mr Brown and the Prime Minister as to what Britain will be able to achieve in terms of reducing global poverty through its G7 role.

This weekend's event will play to two of the Chancellor's current but contrasting obsessions - his mission to solve global poverty and his desire to exchange ideas with the world's leading business figures.

The list of speech-makers reads like a Who's Who of transatlantic business. From the US come Jeff Immelt of GE, Bob Rubin of Citigroup and Meg Whitman from e-Bay.

Among the home-grown - if not entirely home-born - talent is Lord Browne of BP, Arun Sarin of Vodafone, Rod Eddington of British Airways, Sir Terry Leahy of Tesco, Mervyn Davis of Standard Chartered, Eric Nicoli of EMI, Sir John Rose from Rolls-Royce and the heads of the pharma giants, AstraZeneca and GSK.

The recently knighted Sir Digby Jones from the CBI will go head-to-head with Brendan Barber of the TUC. Central bank governors from the UK, US and China are all speaking.

Some of the guests are putting in a repeat appearance - the Chancellor organised a similar event a year ago when he kick-started his effort to boost levels of entrepreneurial activity in the UK to US levels.

But if John Taylor of the US Treasury - John Snow is ill - and his colleagues from Canada, France, Germany, Italy and Japan are impressed by the guest list, they might be less than thrilled by what they see from the windows of their chauffeured limousines. Billboards will line the route from the airport to their hotels, urging them to cancel the unpayable debts that keep poor people trapped in poverty.

When they arrive at Lancaster House, the NGOs that form the Make Poverty History coalition will start a digital counter opposite the gates, recording the number of children around the world whom they claim will die needlessly as a result of poverty.

And as they settle down for their lavish three-course dinner washed down by champagne, two wines and port, in the former home of the dukes of York, they will be serenaded by the sound of protests outside over the acute hunger suffered by Africans.

Mr Brown is unlikely to be too troubled - he has become something of a hero with the NGO movement because of his various initiatives to alleviate poverty.

He will almost certainly use his speech today to hammer home his call for a new Marshall Plan for Africa. He will urge support for the International Finance Facility - borrowing on the capital markets against future aid payments to double world aid payments to $100bn (pounds 53bn) a year.

He won a key victory in Davos last week when Germany signed up in principle to the scheme, meaning a majority of the G7 now back it. But there is some way to go. A senior G7 official in Davos described it as the "funny fund".

Mr Brown will remind his colleagues that 80 per cent of debt is owed to institutions such as the International Monetary Fund and the World Bank in which they are major shareholders. He will reiterate that the UK has offered offer to take responsibility for its share - 10 per cent - of the World Bank debts that mature from now until 2015. He is likely to again set out his proposals to use IMF gold to write off debt owed to the IMF.

In a message aimed at the US he will urge all countries to join the UK in setting a timetable to hit the target of spending 0.7 per cent of national income on aid that the United Nations believes is needed to hit its targets.

But behind the razzmatazz and race to find the gloomiest statistic on global poverty, there are signs the UK is taking a key role in the slow shift in the geopolitical tectonic plates that is under way.

Mr Brown has become the first G7 minister to invite leaders from other countries to these meetings. Tomorrow he will hold an informal breakfast with ministers from India, Brazil, South Africa and China. With Russia already a member of the G8, this weekend can be the start of a process of creating an informal G12 group of countries to tackle the challenges of the 21st century.

Keith Didcock, the deputy -director of the Foreign Policy Centre in London, said it was a "significant step" in terms of managing the world economy. "It is reflective of both the dispersal of global economic influence and the prospective realignment of political power."

While the G7 represents 44 per cent of world output, it speaks for just 12 per cent of its population. A G12 would have two-thirds of global output and half the population.

There is also a hard economic reality behind permanently having 12 rather than seven seats at the dinner table this evening. The new guests are catching up swiftly in the competitiveness stakes.

Research by Goldman Sachs shows that the BRICS countries - Brazil, Russia, India, China and South Africa - could be larger than the G7 within 40 years. Jim O'Neill, the head of global economic research at Goldmans, said: "It is recognition by the G7 that they are no longer the optimal economic policy `club' to manage the world economy.

"Given the rapid rise in demand for energy from China and India in particular, there is little chance of a coherent world energy policy without these nations sitting at the same table as the G7 members."

The invitation of China and the agreement by Zhou Xiaochuan, the governor of its central bank, has fuelled speculation of some movement on foreign exchange policy.

G7 leaders have spent two years urging China to end its peg of the yuan to the dollar, which has kept its exchange rate artificially low and forced the pound, yen and euro higher as the dollar has depreciated.

"Of course, the meeting could turn out to be just a `cosy fireside chat', in which case it would be of little immediate relevance," Mr O'Neill said.

Mr Didcock said there was still only one African country involved in these talks, despite the UK government's focus on the continent. He said the obvious candidate for inclusion would be Nigeria, despite doubts over its democratic credentials.

"You have to be care about inflation of the G7 to a G12, G13 or G15 for pure political purposes," Mr Didcock said. "One has to recognise that it is fundamentally an organisation that is there to deal with economic issues."

On the other hand, if a banquet with 40-year-old port in a historic Georgian building is on offer, the queue could start building quite soon.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleMathematician John Nash inspired the film Beautiful Mind
News
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
music
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine