BUSINESS ANALYSIS: Brown shifts G7 goalposts with poverty agenda
Razzmatazz and British fare for Chancellor's bid to address African debt and aid
Friday 04 February 2005
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.
- 1 Disney heiress Abigail disowns her share of family profits in West Bank company
- 2 The secret report that helps Israel hide facts
- 3 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 4 Israel's propaganda machine is finally starting to misfire
- 5 HSBC closes bank accounts belonging to Muslim clients in the UK
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Disney heiress Abigail disowns her share of family profits in West Bank company
'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
HSBC closes bank accounts belonging to Muslim clients in the UK
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...
£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...
£400 per day + competitive: Orgtel: Liquidity Reporting - Basel III - LCR - Ba...