Politics | Blair may walk away from plan for US to be aid ally
Blair may walk away from plan for US to be aid ally
Bush's opposition to action plan makes strategy switch likely
Patrick Wintour, chief political correspondent
Thursday June 2, 2005
Guardian
Tony Blair and Gordon Brown, facing seemingly implacable American opposition, are considering a
last-minute switch in strategy in their battle to persuade G8 industrial leaders to sign up to a new action
programme on Africa.
The US opposes three central components of the British plan, first set out in the Commission for Africa
report in the spring.
With a mass of celebrities pressing him for action Mr Blair flies to the US next week to see if the
Americans can yet be hauled on board, but the mood in London is wary.
George Bush's administration supports wiping out $40bn (£22bn) of multilateral debt for the poorest
countries, but says it must be financed by cuts in subsequent aid programmes. The US also wants all
future disbursements to these countries to be in grant form. Britain wants rich countries to make up
what the World Bank and other creditors would lose in loan repayments, so overall available aid is not
lost.
The British describe the US plan as robbing Peter to pay Paul. But debt relief is a lot more popular than
extra aid on Capitol Hill.
The US treasury secretary, John Snow, is also not backing British proposals for the sale of IMF gold to
fund writing off of multilateral debt owed to that body. Senators with goldmining interests are bitterly
opposed.
Finally, the US does not support Gordon Brown's plan for an international finance facility, a means of
front-loading $25bn in aid, rising to $50bn by 2015. The cash would be found by borrowing from the
capital markets. The US would probably be expected to raise $12bn of this aid, more than doubling its
current programme. The Americans see it is a piece of financial engineering that does not raise extra
cash.
The British Treasury has been battling for nearly a year to persuade the US that the American
http://politics.guardian.co.uk/print/0,3858,5206410-115539,00.html (1 of 2)6/2/2005 5:01:51 AM
Politics | Blair may walk away from plan for US to be aid ally
constitution, and the Senate appropriations procedures, allow such a proposal. But the US does not
appear to be responding. A US treasury official was quoted in the Washington Post in February as
saying: "We said no at dinner. We said no in the car ride home. We said no at the front porch, and he
still said come to bed."
The US argues it is already the single largest donor to Africa, and in a tight budgetary climate
increased its aid to $3.2bn in 2004, triple the figure for 2000. But, as 0.16% of GDP, the US aid
represents one of the lowest proportions in the G8.
Mr Blair's greatest difficulty is that Mr Bush is under little or no domestic pressure to do anything
dramatic for Africa. Todd Moss, at Washington thinktank the Centre for Global Development, said:
"The US does not have the historical connections with Africa. As a strategic priority it comes behind
the Middle East, Asia and Latin America. Many of the British ideas are seen as a welfare state for
Africa, so the public mood is entirely different here."
Bob Geldof's concert extravaganza received limited coverage in the US press this week. The Africa
Commission tried to raise its profile by giving evidence to the Senate foreign relations committee last
month. Thabo Mbeki, the South African president, lobbied Mr Bush at the White House yesterday to
support the commission's plan.
Mr Moss reckons Mr Bush is likely to say the US has its own initiatives under way, such as the
Millennium Challenge Account, and will wait to see how they pan out. At best, he said, the US might
join an IFF-type arrangement to fund advance purchase contracts for vaccines.
One British aid analyst, speaking on the condition of anonymity, said yesterday that Britain had erred in
putting so much emphasis on US support for its proposals. It should have concentrated on a European
alliance with France, Germany and Italy.
Some government sources said Britain was indeed now planning to use the G7 finance ministers'
meeting next weekend to assemble a Europe-wide consensus on aid and debt.
EU development ministers agreed last week to a goal of committing 0.7 % of GDP to overseas aid.
The Treasury hopes to add European progress on debt to the agenda of the G7 meeting. The aim
would be to shame the US to support the EU package in the run-up to the G8.
An influential figure in the discussions on debt will be Paul Wolfowitz, the new head of the World Bank
and a Bush confidant. He will travel to Africa in June and attend the G8 summit at Gleaneagles.
At his first news conference in office this week he stressed the importance of Africa: "Nothing would be
more satisfying than to feel at the end of however long a term I serve here that we played a role in
changing Africa from a continent of despair to a continent of hope."
Guardian Unlimited ¿ Guardian Newspapers Limited 2005
http://politics.guardian.co.uk/print/0,3858,5206410-115539,00.html (2 of 2)6/2/2005 5:01:51 AM