Order Code RL32796
CRS Report for Congress
Received through the CRS Web
Africa, the G8, and the Blair Initiative
Updated June 14, 2005
Raymond W. Copson
Specialist in International Relations
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

Africa, the G8, and the Blair Initiative
Summary
Britain’s Prime Minister Tony Blair has launched a major diplomatic effort to
marshal the resources he sees as needed to eradicate extreme poverty in sub-Saharan
Africa. He intends to focus the July 2005 G8 summit at Gleneagles in Scotland,
which he will chair, on this initiative. Blair is pushing for a substantial aid increase
for Africa through an “International Finance Facility” (IFF) and 100% forgiveness
of poor country debt to the international financial institutions. The IFF would issue
bonds to finance an additional $25 billion in annual aid to Africa for three to five
years, followed by another $25 billion boost if African governments improve their
managerial and administrative capabilities. IFF bonds would be backed by a promise
from the G7 leading economic powers to repay them after 2015. Poor country debts
to the World Bank and the African Development Bank would also be paid by the G7,
while debts to the International Monetary Fund (IMF) would be funded by revaluing
or selling IMF gold. Finally, Blair seeks the removal of barriers to Africa’s exports.
Blair has long championed a “Marshall Plan” for Africa as part of a “deal” to
help the region achieve the Millennium Development Goals (MDGs), U.N.-endorsed
targets for 2015 that include universal primary education and sharp cuts in poverty.
In exchange, he expects further governance and free-market economic reforms in
Africa. On March 11, 2005 a high-level Commission for Africa appointed by Blair
issued a comprehensive report elaborating the initiative, which has won support from
President Chirac of France and Germany’s Chancellor Schroeder.
The Bush Administration is reacting cooly to the proposed IFF on grounds that
it lacks a means of assuring that new aid funds would be well spent. IFF supporters
note that the funds would be passed through existing aid agencies with their own
monitoring mechanisms. The U.S. share of the initial $25 billion aid boost has been
estimated at $6 billion. Over the long term, Blair sees the IFF as a way of
“frontloading” aid as the G7 move toward a U.N. goal of giving .7% of GDP in
development assistance. For the United States to reach an interim .5% would require
about $40 billion annually, which some see as unrealistic. Others argue that the G7,
working together, could readily afford the IFF. U.S. officials maintain that a pledge
to repay IFF bonds after 2015 would unconstitutionally bind future Congresses;
others point out that the United States routinely agrees to repay debt in the future.
On June 10-11, 2005, G7 finance ministers reached agreement, pending ratification
at Gleneagles, on debt forgiveness for 18 of the world’s poorest countries, including
14 in Africa. The donors are to compensate the World Bank and the African
Development Bank for the lost repayments. The IMF will fund the loss from its own
resources, but not sell gold. The Bush Administration supports reducing trade
barriers, but many see them as an important protection for U.S. interests.

Previous G8 meetings have also focused on Africa. There has been much
debate over whether G8 countries have fulfilled past promises — and over whether
the African states have met their own promises of reforms. This report will be
updated as events warrant. For further information see CRS Report RL32489,
Africa: Development Issues and Policy Options, and CRS Issue Brief IB95052,
Africa: U.S. Foreign Assistance Issues.

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
British Proposals, U.S. Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
International Finance Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
100% Debt Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Removing Trade Barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Is a Marshall Plan Merited? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Africa at Previous G8 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Africa, the G8, and the Blair Initiative
Prime Minister Tony Blair and his
The G8
Chancellor of the Exchequer
(Treasury), Gordon Brown, have
The G8 is a consultative grouping of
launched a major diplomatic effort
major world powers, not an international
aimed at marshaling the resources they
organization. The heads of state and
see as needed to eradicate extreme
government of the six leading industrial
poverty in sub-Saharan Africa. Their
democracies — the United States, Britain,
objective is the realization of
France, Germany, Italy, and Japan — first
Millennium Development Goals
met as a group in 1975 to discuss major
domestic and international issues. In 1976,
(MDGs) in Africa. The goals were set
they held a second summit, with Canada
at the 2000 U.N. Millennium Summit
participating, to form the G7. The summits
and consist of a number of
have continued annually, and in 1998,
development targets to be attained by
Russia joined as a full participant, creating
2015, including universal primary
the G8. The term G7 is still used to refer to
education, halving the proportion of
the leading economic powers, not including
people living on less than $1 per day,
Russia. The next G8 meeting is slated to
and halving the proportion of people
take place July 6-8, 2005, at the Gleneagles
who suffer from hunger.
Hotel in Perthshire, Scotland.
Prime Minister Blair assumed the
rotating presidency of the G8 group of nations (see text box) in January 2005, and he
intends to use the July 2005 G8 summit, which he will chair, to push his Africa
development initiative.1 Specifically, Blair and Brown are seeking a substantial aid
increase for Africa through an “International Finance Facility,” 100% forgiveness of
African debt, and the removal of barriers to African exports. The Blair/Brown
proposals may also be discussed in September, when the U.N. General Assembly
holds a plenary session, attended by heads of state and government, to consider
progress toward achieving the MDGs. Climate change will be the second focus of
the G8 meeting, being called the “Gleneagles summit” for the hotel in Scotland
where it will be held.
The purpose of this report is to provide background on Africa, the G8, and the
Gleneagles meeting. It outlines the British proposals and the U.S. reaction to them
to date. In addition, it briefly reviews the problems that have inhibited African
development and the response to those problems at previous G8 meetings. For
additional information, see CRS Report RL32489, Africa: Development Issues and
Policy Options
, and CRS Issue Brief IB95052, Africa: U.S. Foreign Assistance
Issues
. This report will be updated as events warrant.
1 See the conference website at [http://www.g8.gov.uk].

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Background
Prime Minister Blair has championed a “Marshall Plan” for sub-Saharan Africa
for several years. In October 2001, addressing the challenges of a post 9-11 world,
Blair said that “the state of Africa is a scar on the conscience of the world” and called
for a new partnership with the region:
On our side: provide more aid, untied to trade; write off debt; help with good
governance and infrastructure; training to the soldiers, with UN blessing, in
conflict resolution; encouraging investment; and access to our markets so that we
practice the free trade we are so fond of preaching.
But it’s a deal: on the African side: true democracy, no more excuses for
dictatorship, abuses of human rights; no tolerance of bad governance, from the
endemic corruption of some states, to the activities of Mr. Mugabe’s henchmen
in Zimbabwe. Proper commercial, legal, and financial systems....2
In February 2004, Blair appointed a 17-member Commission for Africa and
asked it to undertake a comprehensive assessment of Africa’s development problems.
Members include Bob Geldof, the Irish musician and development advocate; Prime
Minister Meles Zenawi of Ethiopia; President Benjamin Mkapa of Tanzania; former
U.S. Senator Nancy Kassebaum Baker; and the British Chancellor of the Exchequer
(Treasury), Gordon Brown. On March 11, 2005, the commission issued a 450-page
report3 that will help set the Gleneagles agenda. The report analyzes the reasons for
Africa’s poverty; endorses the main elements of the Blair initiative; and makes
recommendations on governance, conflict prevention and peacekeeping, education,
health, and other issues.
Blair and Brown have mounted a public relations campaign aimed at winning
support for their initiative. At the January 2005 World Economic Forum in Davos,
Switzerland, Blair called for a “quantum leap” in aid and trade to spur African
development. German Chancellor Gerhard Schroeder and French President Jacques
Chirac endorsed his efforts to help Africa, and Chirac proposed a small international
tax on financial transactions or air travel to fund the initiative. Former President Bill
Clinton, Bill Gates, and Bono added their voices at Davos in support of new efforts
to end poverty in Africa. Italy had earlier endorsed Blair’s plans.
Some have argued that the Bush Administration should endorse Blair’s initiative
as well, not only to help Africa but also to reciprocate the strong support Blair has
given the Administration in its policy toward Iraq and in the war on terrorism.4
Others argue that the United States has competing priorities and no compelling
reason to sign on to the Prime Minister’s initiative. To date, the Administration has
distanced itself from Blair’s proposal for new aid increases for Africa and put
2 Speech to the Labour Party meeting at Brighton, England, October 2, 2001.
3 Our Common Interest: Report of the Commission for Africa, available at
[http://213.225.140.43/english/report/introduction.html].
4 “Repaying Tony Blair,” New York Times editorial, February 13, 2005. See also,
“Thousands Died in Africa Yesterday,” New York Times editorial, February 27, 2005.

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forward a different approach to achieving further debt relief. Both the Bush
Administration and the European Union (EU) are on record in favor of a sharp
reduction in trade barriers, as Blair urges, but this proposal faces strong domestic
opposition both in Europe and the United States.
British Proposals, U.S. Responses
Chancellor Brown is sometimes portrayed as a political rival of Blair’s, but he
has played a key role in formulating Blair’s G8 initiative. In January 2005, Brown
made several speeches on African development and undertook a high-profile trip
through the sub-Saharan region to highlight the principal British proposals:
International Finance Facility
Blair and Brown initially proposed the creation of an International Finance
Facility (IFF) for Africa funded at $50 billion annually for ten years. This proposal
has been modified by the Commission for Africa’s report, which calls for a two-stage
approach in view of Africa’s limited ability to absorb new aid. The report
recommends $25 billion in additional annual aid over the next three to five years,
followed by a review and a move to $50 billion if there has been sufficient progress
in improving the managerial and administrative capabilities of African governments.5
The IFF would not be a new development bank or aid agency, but a mechanism for
raising new resources for development. The IFF would sell bonds and disburse the
proceeds to existing bilateral and multilateral aid agencies from 2006 through 2015.
Donors would commit themselves to repaying the bonds in the years after 2015. The
Commission’s report describes this “big push” of predictable aid as a moral duty for
the G7 developed countries, and as a step that would serve their economic self-
interest by promoting an economic expansion in Africa. The report repeatedly
stresses that Africa must continue economic and governance reforms if the new aid
is to be used effectively.
One source estimates the near-term cost of U.S. participation in the IFF, based
on the Commission’s $25 billion initial target, at $6 billion or per year.6 Over the
long term, however, Blair regards funding for the IFF as dependent on progress by
the G7 in reaching the goal of giving .7% of GDP in development aid. For the
United States to reach an interim level of .5% from the 2004 level of .16% would
require about $40 billion in added aid annually. Brown and Blair see their IFF
proposal as a way of helping the G7 members “frontload” aid as they gradually move
toward the .7% goal — an objective first envisaged in a 1970 U.N. General Assembly
resolution and endorsed at a 2002 U.N.-convened summit on financing for
development at Monterrey, Mexico. After nearing or attaining the .7% goal, the G7
would be in a position to pay off the IFF bonds after 2015. Some see anything
approaching the .7% goal for the United States as highly improbable at a time when
5 Our Common Interest, p. 53.
6 “Mr. Bush and Africa,” Washington Post, June 7, 2005; but see Sebastian Mallaby, “Easy
Ways to Aid Africa,” Washington Post, March 31, 2005.

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the country faces a budget deficit as well as major commitments in Iraq and
elsewhere. Others emphasize that Blair envisages the United States and others
moving only incrementally toward .7%, while deferring repayment of the IFF bonds
for a decade. On May 24, 2005, European Union foreign and development ministers
pledged that their governments would reach the .7% aid level in 10 years, with an
interim target of .56% by 2010, when the Europeans would be providing $25 billion
in added annual aid. Some cautioned, however, that these pledges could be affected
by budgetary constraints in some European countries.
U.S. officials have reacted cooly to the IFF proposal, and Secretary of State
Condoleezza Rice has stated flatly that “We don’t support the international financing
facility, because we don’t think it’s a cost-effective way to deliver what is trying to
be delivered here.”7 Rice went on to suggest that the IFF would lack a mechanism
to assure that the money was well spent. Supporters of the IFF argue that since it
would disburse funds through existing aid agencies, such as the World Bank and
bilateral G7 aid organizations, with their own mechanisms for oversight and
evaluation, accountability should not be a problem. The Bank and the bilateral
agencies have focused for many years on efforts to enhance the effectiveness of
development aid by channeling it to “good performers”: countries that are
improving governance and implementing free market reforms. Such agencies would
be highly attuned, IFF advocates maintain, to assuring that the new funds were spent
effectively.
Rice and other officials cite the President’s Emergency Plan for AIDS Relief
(PEPFAR) and the Millennium Challenge Account (MCA) as evidence that the
United States is already increasing aid, although by smaller amounts than Blair and
Brown envisage. PEPFAR aims at disbursing $15 billion for AIDS treatment,
prevention, and care from FY2004 through FY2008. Congress appropriated $2.92
billion for this program in FY2005, and $3.16 billion has been requested for FY2006.
The MCA was initially intended by President Bush to add $5 billion annually to U.S.
foreign aid by FY2006 for countries that are well-governed, investing in people, and
fostering free market economies. However, Congress has appropriated less than
requested for this program, and the President has asked for $3 billion in FY2006
rather than the $5 billion initially expected. Many are dissatisfied with the MCA
because its governing body, the Millennium Challenge Corporation (MCC), has been
slow to disburse funds.8 Its first “compact” — for a $110 million program in
Madagascar to promote domestic investment — was announced on March 14, 2005.
The MCC has found that eight sub-Saharan countries, including Madagascar, meet
the criteria for receiving MCA grants. Another increase in U.S. foreign aid was
agreed to in late February 2005, as the United States gave its support to a three-year
7 Testimony on the Fiscal Year 2006 Foreign Operations budget before the House
Committee on International Relations, February 17, 2005.
8 CRS Report RL32427, Millennium Challenge Account: Implementation of a New U.S.
Foreign Aid Initiative
, by Larry Nowels.

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25% boost in the resources of the World Bank’s International Development
Association (IDA), which assists poor countries.9
John Taylor, the U.S. Treasury Under Secretary for International Affairs, told
a February 2005 meeting of G7 finance ministers that the United States could not
participate in the IFF because guaranteeing bonds to be paid after 2015, as Brown
proposes, would unconstitutionally bind future Congresses to making
appropriations.10 Some wonder, however, if a means could be found to overcome
this difficulty. The United States regularly assumes debt to be paid in the future in
the form of bonds. Moreover, the United States regularly agrees to multi-year
“replenishments” of the multilateral development banks. Congress makes annual
appropriations for these replenishments, and may not appropriate the full amount
scheduled for a given year. Nonetheless, U.S. support helps give the Bank the
creditworthiness it needs to borrow in the financial markets. Moreover, the United
States has assumed “callable capital” obligations to the “hard loan” windows of the
World Bank and other international financial institutions. This capital can be
“called” if the institutions find themselves in financial difficulties; and some argue
that if this should occur, a future Congress would be obliged by past U.S. promises
to appropriate the funds.
President Bush reiterated on June 1, 2005, following a meeting with South
Africa’s President Thabo Mbeki, that the IFF proposal “does not fit our budgetary
process,” and he maintained this stance in meetings with Prime Minister Blair at the
White House the following week. At a June 7 press conference with Blair, however,
the President announced an additional $674.4 million in aid to Africa in FY2005, to
be drawn from food and disaster assistance funds, as well as refugee aid, already
appropriated by Congress.
100% Debt Relief
Blair’s Commission for Africa recommends full forgiveness of public debt owed
by poor African countries. Noting that considerable progress has already been made
in forgiving bilateral debt, the report calls for a focus on multilateral debt, owed
principally to the World Bank’s International Development Association (IDA) and
the African Development Bank’s African Development Fund. IDA and the Fund
make so-called “soft loans” to poor countries on highly concessional terms with
extended repayment periods. In addition, Blair’s initiative calls for forgiveness of
Africa’s debt to the International Monetary Fund (IMF). Africa’s debts to the
multilateral development banks (MDBs) were estimated at $52 billion in 2002, while
debt to the IMF was $7 billion.11 The developed countries should implement the
proposed debt relief, according to the Blair Commission, by taking over the debt
payments of the African countries, which it calculates at about $2 billion per year.
9 World Bank, “Donors Agree to Substantial Increase in New Money for Poorest
Countries,”press release, February 22, 2005.
10 “UK’s Brown Aid Plans on Hold After G7 Meeting,” Dow Jones Newswires, February 7,
2005.
11 World Bank, African Development Indicators 2004, p. 175.

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This sum could be part of the aid package delivered through the IFF. Britain has
already agreed to pay 10%, which it regards as its fair share, of the multilateral debt
owed by 22 poor countries. Blair and Brown, meanwhile, are urging that debt to the
IMF be repaid either by “revaluing” or selling gold held by the IMF. The IMF
reports that it has 103.4 million ounces of gold officially valued at $9 billion but
worth $45 billion at current world prices.12
U.S. officials initially endorsed the concept of 100% debt forgiveness, and
pointed out that the United States has already forgiven poor country bilateral debts
and supported the World Bank/IMF Enhanced Heavily Indebted Poor Countries
(HIPC) initiative for multilateral debt relief. However, officials maintained that the
issue of revaluing IMF gold needed further consideration,13 and reportedly opposed
the idea outright at the Spring 2005 meetings of the IMF and World Bank, held in
Washington in April.14 Some experts in the gold market had been concerned that
any major IMF gold sale could sharply lower the price of gold, with potentially
destabilizing consequences for the gold reserves held by many countries. Others
argued that any sales could be small and made over a long period of time to minimize
this risk.
With respect to debt owed by poor countries to the World Bank and the African
Development Bank, U.S. officials favored a simple cancellation, not funded by any
repayments made by the G7 or any new contributions by the G7 to the MDBs.15
After the writeoff, in the U.S. view, the banks would make grants rather than loans
to poor countries, so that they do not accumulate new debt.16 Many were concerned
that the U.S. approach would deplete the banks’ capital and reduce their capacity for
alleviating poverty, since they would no longer be owed debts by poor countries, or
receiving repayments from them. Supporters of the U.S. approach argued that it need
not threaten the banks, since the G7 could provide new replenishments as required.
U.S.-British differences on debt relief were evidently resolved by an agreement
reached at a June 10-11, 2005, meeting in London of G8 finance ministers, subject
to ratification at the July summit. Under this agreement, $40 billion in debt owed by
18 countries that have reached the “completion point” in the HIPC process will be
written off, and the donors will contribute additional funds to the World Bank and
the African Development Bank to make up for the loss. The IMF will absorb the loss
from its own resources and will not sell gold. Fourteen of the 18 countries are in sub-
Saharan Africa.17 As a result of reaching the HIPC completion point, they had
12 “Gold in the IMF: A Factsheet — February 2005.” At [http://www.imf.org].
13 U.S. Treasury, Office of Public Affairs, “Statement by John B. Taylor, Under Secretary
for International Affairs,” February 5, 2005.
14 “Deal to Ease Poor Nation’s Debt Eludes Rich Nations,” New York Times, April 17, 2005.
15 “G-7 Weighs Debt Write-Off for Poor,” New York Times, February 7, 2005.
16 Ibid. For a review of the issues, see CRS Report RL31136, World Bank: IDA Loans or
IDA Grants?
by Jonathan Sanford.
17 Benin, Burkina Faso, Ethiopia, Ghana, Madagascar, Mali, Mauritania, Mozambique,
(continued...)

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already had their debt repayments reduced to a level regarded by the World Bank and
IMF as “sustainable” in return for economic reforms and the adoption of an approved
strategy for reducing poverty. Nine more African countries are in the HIPC process
and may soon reach the completion point.
The June 2005 agreement covered an estimated $40 billion in debt, but its
overall cost was estimated at $16.7 billion — the amount expected to be paid to the
MDBs and the IMF through 2015. The United States reportedly agreed to pay
between $1.28 billion and $1.75 billion per year as its share of donor compensation
to the World Bank and the IMF. The agreement drew wide praise as a step forward
in easing Africa’s debt burden, particularly because the G8 promised that the
compensation paid to the MDBs would be in addition to the assistance they were
already planning to provide Africa. However, some were concerned that this
commitment would be difficult to monitor; and some also argued that an agreement
on the IFF at the London meeting would have been of far greater benefit to Africa.
The agreement does not cover Nigeria’s vast $36 billion debt, which is primarily
owed to bilateral lenders rather than the MDBs.18 Nigeria is not ranked among the
world’s poorest countries due to its oil wealth, but the G8 finance ministers agreed
that “Nigeria is key to the prosperity of the whole continent of Africa” and promised
to find a “fair and sustainable solution to Nigeria’s debt problems in 2005....”19
Removing Trade Barriers
Chancellor Brown advocates ending “the hypocrisy of developed country
protectionism” by removing trade-distorting subsidies and other barriers to trade.20
Critics of the G7 are adamant that they have done far too little to open their markets
to African exports of cotton, sugar, and other commodities, and they blame the G7
for the failure of the 2003 Cancun World Trade Organization (WTO) summit to
agree on the removal of U.S. and European agricultural subsidies. The Blair
Commission recommends an immediate end to trade-distorting support programs for
cotton and sugar, an end to all trade-distorting agricultural support by 2010, and the
progressive reduction of all tariffs to zero by 2015. Some believe that progress on
trade issues is possible, either at the G8 July meeting or at the next WTO summit to
be held in Hong Kong in December. In July 2004, both the United States and the
European countries agreed with other WTO members on a “framework” for
discussions on reducing subsidies and other barriers.21 The framework opened the
way to negotiations, now ongoing, on cutting domestic farm support programs in the
17 (...continued)
Niger, Rwanda, Senegal, Tanzania, Uganda, and Zambia.
18 “Wolfowitz Hopeful on Nigerian Debt Relief,” Financial Times, June 14, 2005.
19 “G8 Finance Ministers’ Conclusions on Development, London, June 10-11, 2005,”
available at [http://www.treasury.gov].
20 Speech at the National Gallery of Scotland, January 6, 2005.
21 CRS Report RL32645, The Doha Development Agenda: The WTO Framework Agreement,
coordinated by Ian Fergusson.

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developed countries, reducing other trade barriers, and eliminating export subsidies.22
Meanwhile, President Bush has proposed scaling back farm subsidies in his fiscal
2006 budget proposal. In exchange for reduced subsidies, U.S. negotiators are
seeking greater access for U.S. manufactured goods and services in developing
countries.
Whether these developments will lead to the reduction in trade barriers that
Blair and Brown are seeking remains to be seen. Some developing countries may not
be willing to make the concessions on market access sought by the United States,
leading to a breakdown in the WTO negotiations. Moreover, reductions in subsidies
and other barriers will encounter political opposition in both the United States and
Europe, where many see them as an important guarantor of jobs and a protection
against price and supply fluctuations.
Some credit the United States with moving further than Britain and other
countries on removing trade barriers to date through the U.S. African Growth and
Opportunity Act (AGOA) program, begun in 2000. AGOA gives duty-free access
to the United States for a wide range of products from 37 sub-Saharan countries,
including 24 permitted to export textiles and apparel items.23 Moreover, the Bush
Administration is negotiating a free trade agreement with the five countries of the
Southern African Customs Union, and has expressed an interest in other African free
trade agreements as well. At the same time, 78 developing countries in Africa, the
Caribbean, and the Pacific (ACP) enjoy preferential access to European markets
through the European Union-ACP Partnership, while South Africa has its own trade
agreement with the EU. Some analysts are concerned that across the board
reductions in developed trade barriers will strengthen Africa’s competitors in China
and elsewhere, reducing the value of such special arrangements as AGOA and the
ACP Partnership.
22 CRS Report RS21905, The Agriculture Framework Agreement in the WTO Doha Round,
by Charles E. Hanrahan.
23 See CRS Report RL31772, U.S. Trade and Investment Relationship with Sub- Saharan
Africa: the African Growth and Opportunity Act and Beyond
, by Ian Fergusson and Danielle
Langton.

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Is a Marshall Plan Merited?
Prime Minister Blair’s initiatives on Africa reflect widespread concerns over
Africa’s failure to develop, despite a rich endowment of resources.24 These include
extensive deposits of petroleum, diamonds, and metals; wide areas of rich
agricultural lands; and the potential for tourism lying in Africa’s beaches, game
reserves, and ancient cultures. Yet average GDP per capita in the sub-Saharan region
stood at $585 in 2003, according to the World Bank, barely above the 1963 figure of
$509, measured in constant dollars. Over the same period, economies in south and
southeast Asia, which started at the African level, achieved extremely rapid growth,
with many reaching middle income status. More than 25 million of sub-Saharan
Africa’s 700 million people are infected with HIV, and life expectancy, which
reached a peak of about 50 years in 1992, has since fallen to about 46.25 Child
malnutrition, illiteracy, and lack of access to clean water are serious problems
throughout the region. A January 2005 report by the United Nations Millennium
Project argued that Africa stood no chance of meeting the Millennium Development
Goals without a massive infusion of aid: $48 billion in 2006, rising to $74 billion in
new aid by 2015.26
A vast scholarly literature exists on the reasons for Africa’s failure to develop.
Many blame factors over which African and Africans have little control, such as a
tropical environment that imposes a heavy disease burden and leads to rapid
depletion of soils. Africa’s population has tended to concentrate inland, where higher
altitudes make for a healthier climate, but this means many countries lack large
concentrations of people in port cities where export-based industry could readily
locate. The long era of the slave trade, ending only in 1870, took away millions in
their most productive years, just as the AIDS epidemic does today; while the colonial
era left a legacy of authoritarian government and a region divided into 48 countries,
many of them small and/or landlocked.
Other scholars tend to blame African governments for the difficulties the
continent faces. Corruption, a poor quality of governance, and economic policies that
discourage free markets have come in for particular criticism. A wide range of
countries have freed up markets in varying degrees and undertaken governance
reforms since the late 1980s under pressure from the World Bank, the IMF, and
bilateral donors; but corruption remains a problem. Kenya, for example, had been
the source of much optimism for Africa’s future after free and fair elections were
held in December 2002, but recently both the U.S. and British ambassadors have
criticized the government of President Mwai Kibaki for failing to tackle corruption.
24 For further information, see CRS Report RL32489, Africa: Development Issues and
Policy Options,
by Raymond Copson.
25 World Bank, World Development Indicators Online.
26 U.N. Millennium Project, Investing in Development: a Practical Plan to Achieve the
Millennium Development Goals
, Jeffrey D. Sachs, Director, p. 57.

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The United States has suspended an anti-corruption assistance program in Kenya in
response to the problem.27
Some also feel that African leaders have done too little on a regional basis to
deal with the continent’s problems. In 2001, African leaders launched the New
Partnership for Africa’s Development (NEPAD), intended to improve governance,
strengthen institutional capacity, and reduce corruption.28 NEPAD includes an
African Peer Review Mechanism (APRM) designed to assure accountability in
governance and economic policy. Skeptics of Africa’s efforts often point to the
seeming reluctance of neighboring countries to deal with the ongoing human rights
and governance problems in Zimbabwe as evidence that NEPAD standards are not
being upheld. A March 31 2005 parliamentary election in Zimbabwe was widely
rejected as not free and fair by western critics, but accepted and even praised by
official observers from South Africa and the Southern African Development
Community.
In short, a number of observers feel that too many African governments are
failing to live up to their end of the deal proposed by Prime Minister Blair in October
2001. They point out that Africa has received substantial amounts of assistance over
the years, with official development assistance reaching nearly $24 billion in 2003
(see below). From their perspective, the principal responsibility for Africa’s
development now lies with Africa’s leaders who must assure that their countries enter
the ranks of the “good performers. Economist Jeffrey Sachs, head of the U.N.
Millennium project, takes a somewhat different view. Though a strong supporter of
sound economic policies in Africa, he believes the continent is caught in a “poverty
trap” — so poor that few want to invest even in countries where real attempts at
reform are being made. The Millennium Project report, which he directed, argues
that many countries in Africa are well governed, considering the extent of their
poverty, and would benefit from a “big push” in foreign assistance to strengthen
education, health care, infrastructure, and other sectors. This “rapid scale-up,” in his
view, would create viable economies attractive to investors, and help Africa escape
the poverty trap.
Proponents of a third view acknowledge that committing large new amounts of
aid to Africa is risky, given the continent’s many difficulties, but maintain that the
risk is worth taking since in their view the amounts of aid being proposed by Blair,
Brown, and Sachs could readily be afforded by the G7 countries working together.
In return, some argue, the G7 might gain new markets, assure access to Africa’s oil
and other resources over the long term, and create an environment in which violence
and terrorism are less likely to emerge.
27 “U.S. Cuts Anti-Corruption Aid,” BBC News, February 8, 2005.
28 CRS Report RS21353, New Partnership for Africa’s Development (NEPAD), by Nicolas
Cook.

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Africa at Previous G8 Meetings
G8 meetings in the 1990s often dealt with many of the same themes expected
to be raised at Gleneagles. The G8 first emphasized in those years that sub-Saharan
Africa faces special development challenges, and summit communiques
acknowledged that “substantial” development assistance was needed to help sub-
Saharan Africa grow.29 Debt relief for the poorest countries was another major
theme. The 1994 Naples summit encouraged wider cancellation of bilateral debt, and
the 1996 summit at Lyons helped launch the Heavily Indebted Poor Countries
Initiative (HIPC) to reduce poor country debt owed to the World Bank and IMF. At
Cologne in 1999, the G8 agreed on an expanded HIPC program that would offer
“deeper, broader, and faster” debt relief. Toward the end of the 1990s, G8 meetings
also began to reflect the view that the least developed countries needed expanded
access to developed country markets. Beginning with the 1997 Denver summit, the
G8 repeatedly called for expanded efforts to combat HIV/AIDS and other infectious
diseases afflicting Africa as well as other impoverished regions. Also at Denver, the
G8 expressed their support for “long-term efforts to promote rapidly deployable
African peacekeeping capacities.” While pledging support for Africa in these areas,
the G8 have consistently emphasized the other half of the Blair “deal.” For example,
at Lyons in 1996, the G8 stated that
the developing countries have a fundamental responsibility for promoting their
own development. This means conducting sound and consistent economic and
social policies, promoting a political and legal environment conducive to the
development of the private sector, and encouraging domestic and foreign
investment.30
The Genoa and Kananaskis meetings in 2001 and 2002 saw an intensification
of the focus on Africa. Three sub-Saharan presidents were invited to Genoa to report
on new African efforts to promote development, and African leaders have attended
each subsequent G8 meeting. Presidents Thabo Mbeki of South Africa, Olusegun
Obasanjo of Nigeria, and Abdoulaye Wade (WAHD) of Senegal were present at
Kananaskis as the G8 issued its Africa Action Plan promising a new Africa
partnership. Under the plan, support was offered in several priority areas: promoting
peace and security; strengthening institutions and governance; fostering trade,
investment, growth, and sustainable development; implementing debt relief;
improving health and confronting HIV/AIDS; increasing agricultural productivity;
and improving water resource management. This support was to be closely linked
to progress in Africa in implementing NEPAD objectives with respect to improving
governance, strengthening institutional capacity, and reducing corruption. Mbeki,
Obasanjo, and Wade are regarded as the principal authors of NEPAD.
Kananaskis represents the high water mark to date of G8 attention to Africa.
However, at the 2003 summit in Evian, France, the G8 affirmed their commitment
to the HIPC initiative and announced a G8 Action Plan Against Famine, Especially
29 Communiques of the 1997 Denver summit (June 22, 1997) and of the 1998 Birmingham,
U.K. summit (May 17, 1998).
30 Economic Communique, June 28, 1996.

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in Africa. In June 2004, the U.S.-hosted summit at Sea Island, Georgia, issued a
number of statements related to Africa’s needs, including commitments to stopping
polio forever and combating corruption in Nigeria, as well as action plans on science
and technology for sustainable development and on ending the cycle of famine in the
Horn of Africa. Another action plan called for training and, where appropriate,
equipping 75,000 peace support troops worldwide by 2010, with a sustained focus
on Africa. Prime Minister Blair reportedly advanced a proposal at Sea Island for
100% debt forgiveness for the world’s poorest countries, most of which are in Africa,
but no agreement was reached.
Whether G8 summits have responded adequately to Africa’s needs has been the
subject of a lively debate. Many feel that the G8 have not done nearly enough. After
the 2003 Evian meeting, for example, Omar Kabbaj, President of the African
Development Bank, wrote that there had been some good initiatives with respect to
aid, but sub-Saharan Africa required $50 billion per year to achieve sustainable,
broad-based growth.31 Jeffrey Sachs has argued repeatedly for a vastly expanded
developed country aid program for Africa, most recently in the Millennium Project
report noted above. After the Sea Island summit, the Jubilee USA Network and the
50 Years is Enough Network, leading advocates of debt relief, expressed their
“outrage” that the G8 had not acted on 100% debt cancellation for the poorest
countries.32 Many have questioned the G8 commitment to peace and security,
criticizing as inadequate, for example, the response of the developed countries to the
conflict and human rights crisis in Sudan’s Darfur region.
In May 2004, on the eve of the Sea Island summit, the New York-based Council
on Foreign Relations issued a report that took something of a middle ground on G8
performance. The report pointed out that the G8 donors had indeed launched or
expanded initiatives in key priority areas of the Kananaskis Africa Action Plan.33
With respect to strengthening institutions and governance, the report noted that
United States has undertaken an Africa Anti-Corruption Initiative to combat both
public and private corruption, while Canada is using part of its Fund for Africa to
promote public-service reform and decentralization. The Council singled out the
U.S. AGOA program as an important effort by a G8 member to boost African trade
and investment. Moreover, the report noted that developed country aid to Africa is
increasing. According to data released subsequently by the Organization for
Economic Cooperation and Development (OECD) Official Development Assistance
(ODA) to sub-Saharan Africa is indeed growing, reaching $23.7 billion in 2003, up
from $18.4 billion in 2002 and $13.8 billion in 2001. U.S. assistance to the region
would reach $3.9 billion under the FY2006 budget request, not including indirect
assistance channeled through the World Bank and U.N. agencies, or disaster
31 “Viewpoint — Africa Needs a Level Playing Field,: The Banker, July 1, 2003.
32 “U.S. Movement for Debt Cancellation Outraged by G-8 Failure on Debt,” press release,
June 10, 2004.
33 J. Brian Atwood and Robert S. Browne, Co-Chairs; and Princeton N. Lyman, Project
Director, Freedom, Prosperity, and Security: the G8 Partnership with Africa: Sea Island
2004 and Beyond, A Council on Foreign Relations Special Report
(New York: May 2004).

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assistance likely to be provided as emergencies arise. Aid in FY2002 was $2.5
billion.34
The Council on Foreign Relations praised the HIPC initiative, and noted that
peace and security are being promoted through U.S., British, Canadian, and other
efforts to support peacekeeping and train peacekeepers. In keeping with the Sea
Island decisions, the Bush Administration’s FY2006 budget request seeks funds to
begin a new Global Peace Operations Initiative to train foreign peacekeeping troops,
with an emphasis on Africa.35 At the same time, the Council’s report cited several
areas in which it said the G8 needed to do more, including increased support for
NEPAD, a review of proposals for ending agricultural subsidies and quotas,
additional assistance for health infrastructure, and further debt relief.
The debate over the G8 response to Africa’s needs, and over Africa’s fulfillment
of its promises to reform, is likely be revived as the Gleneagles meeting nears. The
differences that have emerged between the United States and Britain over the IFF
proposal and debt forgiveness could well sharpen that debate.
34 CRS Issue Brief IB95052, Africa: U.S. Foreign Assistance Issues, by Raymond Copson.
According to the OECD, the United States was the leading aid donor to sub-Saharan Africa
in 2002, the last year for which data are available, providing about 14% of the region’s aid.
However, the leading European donors taken together, including the European Union’s
development agency, outstripped the U.S. contribution by a wide margin, providing 42% of
Africa’s aid, including 12% given by France. Moreover, Africa consumed a larger portion
of the aid budgets of the European donors in comparison with the United States. OECD,
“Top Ten Donors and Recipients in Africa, 2002,” available at [http://www.oecd.org].
35 CRS Report RL32773, The Global Peace Operations Initiative: Background and Issues
for Congress,
by Nina Serafino.