An Taoiseach Bertie Ahern T.D. (in light jacket), the then President in Office of the EU, together with leaders of the G8 at the 2004 summit at Seal Island, Georgia, US - The G8 comprises The United Kingdom of Great Britain and Northern Ireland, The French Republic, The Russian Federation, The Federal Republic of Germany, The United States of America, Japan, The Republic of Italy and Canada. The European Commission is also represented.

As the G8 leaders prepare to meet for their annual summit, the EU is coming to terms with the failure of its own summit. Irish politicians produced synthetic indignation in response to Prime Minister Tony Blair's call for a review of the Common Agricultural Policy (CAP) which provides generous supports for Irish farmers that are paid by the Dutch, among a minority of member countries. In the European Parliament, Fine Gael MEP resorted to personal abuse by telling Tony Blair that he was media baron Rupert Murdoch's messenger. Irish Foreign Minister Dermot Ahern professed to be confused by Tony Blair's position.

There was no confusion or criticism of French President Chirac's proposal that the UK CAP rebate be abolished even though the Irish politicians were saying that it was Blair who was mischievously trying to unwind an agreement that had been made in 2002. 

It is well to remember in the context of the current debate on relief for developing countries, that in the 1970's, Irish politicians used to talk about the "obligation" of the wealthy European countries to help poor countries on Europe's western periphery. It is also well to keep in mind that this year, rich Ireland is still a net beneficiary of the EU Budget. So simply put, Irish politicians will only have an interest in EU reform when the gravy train from Germany and Holland comes to a halt. 

The UK assumed the Presidency of the G8 on 1 January 2005 with the Annual Summit taking place at Gleneagles Hotel in Scotland from 6-8 of July.

Prime Minister Tony Blair said that his focus would be on the challenges of Africa and climate change during the UK Presidency.

On June 11th, G8 Finance Ministers agreed to complete the process of debt relief for the Heavily Indebted Poor Countries (HIPC) by providing additional development resources which will provide significant support for countries' efforts to reach the goals of the Millennium Declaration, while ensuring that the financing capacity of multilateral lenders is not reduced. This will lead to 100 per cent debt cancellation of outstanding obligations of HIPCs to the IMF, World Bank and African Development Bank.

This week's proposed reform of the sugar market in the European Union, is an illustration of the complexity involved in introducing equity in the global trade system, which is an essential adjunct to debt relief.

This week also, in The Irish Times, readers were presented with an uncomplicated, simplistic picture where it was argued that "the offer of debt cancellation...will cause greater poverty, malnutrition, disease, illiteracy and a widening gap between rich and poor." The World Bank and IMF are agents for multinational corporations while Bolivia possesses South America's second-largest gas reserves, but remains the poorest country on the continent. "Its gas reserves were privatised in the mid-1990s, so the revenue accrues to multinational oil companies rather than funding basic services."

Gleneagles Hotel, Scotland

The preset mindset of rapacious multinationals is a hard one to change and in the case of Bolivia, according to The Economist, in the province of Tarija stands a range of forested razor-backed hills, resembling frozen ripples in the earth's crust. About 6km (four miles) beneath their surface lie huge reservoirs of natural gas, discovered as a result of the investment of more than $2.5 billion in Bolivia's oil and gas industry since its privatisation in 1997. So Bolivia is poor because foreign companies invested money in recent years and discovered gas reserves!

In an illustration of the clubby nexus at the apex of Irish journalism, the writer of The Irish Times article William Hederman, also writes for Vincent Browne's magazine Village, which was noted in the newspaper. Browne is probably unique in countries where there is an independent media as he works for three of the four principal Irish media organisations and also runs his own current affairs magazine.

EU Sugar Reform.

UK Prime Minister Tony Blair

The European Commission proposed far-reaching reforms to the Common Market Organisation for sugar this week. The Commission said that the changes will enhance the competitiveness and market-orientation of the European Union sugar sector, guarantee it a viable long-term future and strengthen the EU’s negotiating position in the current round of world trade talks. They will modernise the current system, which has remained largely unchanged for around 40 years. The new system will continue to offer preferential access to Europe’s sugar market for developing countries at an attractive price well above the world market level. African, Caribbean and Pacific (ACP) countries which traditionally export sugar to the EU will benefit from an assistance programme, also adopted by the Commission today. The Commission reform proposals include a two-step cut totalling 39% in the price for white sugar; compensation to farmers for 60 percent of the price cut through a decoupled payment - which would be linked to the respect of environmental and land management standards and added to the Single Farm Payment; a voluntary restructuring scheme lasting four years to encourage less competitive producers to leave the sector; and the abolition of intervention. The ACP assistance plan will earmark € 40 million for 2006 and pave the way for further assistance. The Commission hopes for a political agreement on the proposals at the Agriculture Council in November.

The Committee of Industrial Users of Sugar praised the proposal, claiming that "the price cut is vital for the thousands of European small and medium sized companies producing chocolate, biscuits and other confectionery". 

The European Committee of Sugar Producers criticised the Commission’s proposal for "falling short of meeting the objectives of sustainability and competitiveness of the European sugar sector", among other things because "the external policy pillar is completely missing (...) and therefore no market equilibrium can be achieved."

The World Wildlife Foundation calculated that "under the proposed reforms, the EU will still spend €30 million dumping sugar on world markets and the severe restrictions on the import of sugar from developing countries will remain in place until 2009". 

Politicians from ACP countries dependent on sugar production commented in similar vein. Roger Clarke, Agriculture Minister of Jamaica, said: "It's going to be devastating. We have to be super-efficient to survive."

"This is indeed a devastating proposal that must be fought tooth and nail," said Ian McDonald, Chief Executive of the Sugar Association of the Caribbean.

McDonald calculated the proposed EU cuts would cost ACP sugar-exporting nations more than $400 million annually, with the cost to Caribbean producers alone more than $100 million a year.

The world's top three sugar cane exporters, Brazil, Thailand and Australia, welcomed a radical reform of Europe's heavily subsidised sugar industry.

"It's a step in the right direction," said Angelo Bressan Filho, director of the Sugar and Agroenergy Department at Brazil's Agriculture Ministry.

Brazil, the world's biggest sugar producer with 40 percent of the free world market, is eventually expected to fill much of the vacuum left by the EU in international trade.

The EU's proposal was in response to a WTO ruling following a complaint that was brought by Brazil, Thailand and Australia.

In an editorial, the Financial Times said: In a crowded field, the European Union's support for its sugar farmers is perhaps the silliest agricultural subsidy in the rich world. Yesterday's proposal by Mariann Fischer Boel, the agriculture commissioner, that the support price should be cut by an impressively ambitious 39 per cent, is about four decades overdue.

The sugar regime had to change, and Ms Fischer Boel deserves great credit for taking on Europe's ludicrously protectionist sugar lobby. As she points out, as the rest of European farming has been reformed (albeit slowly and inadequately) it looks increasingly ridiculous to reward woefully uncompetitive domestic sugar farmers with prices three times world levels. Cane from hot countries, not beet from cold, is the future of world sugar.

But the way the EU as a whole has gone about the changes leaves a great deal to be desired. While Brussels crafts generous guaranteed compensation schemes for its own displaced sugar farmers, its promises to affected growers in some developing countries are much shakier.

Former European colonies with special quotas allowing them to sell into the EU at the inflated price, such as Guyana, fully 17 per cent of whose gross domestic product is sugar production, will lose out. Though dislocation was inevitable, generous amounts of aid could help the economies adjust.

True, the EU has promised such help. But it starts with a miserly €40m (£27m) in 2006, compared to the hundreds of millions that will be doled out in compensation to European farmers. And despite encouraging noises from Brussels about the need to make aid coherent with trade, aid administered centrally by the Commission has in practice been slow, badly targeted and incompetently delivered. No sensible developing nation would exchange EU trade preferences today for a promise of aid tomorrow.

And even for somewhat more competitive sugar exporters in poor countries, the sequencing of the reform has been unhelpful. Certain very poor countries such as Mozambique have sufficiently low production costs that they might well be able to compete even after the price cut. But they have relatively low quotas to sell into the EU and, thanks to past lobbying from European sugar barons, the complete duty-free access to the sugar market that the least-developed countries were promised under the EU's Everything But Arms programme has been delayed until 2009. Ideally, the market access would have preceded the price cut, helping such countries attract foreign investment to rejuvenate their sugar industries with the promise of a rapid early rise in export earnings.

The IMF, Globalisation and the G8

EU Trade Commissioner Peter Mandelson

In his Irish Times article, William Hederman wrote that the G8 is an imperialists' club that creates massive injustice in pursuit of corporate profit. The first step in making poverty history is to make the G8 history. Bodies such as the G8, World Bank and IMF only change when not to change would threaten their existence. Gestures such as the debt cancellation and Gordon Brown's support for the Live 8 concert obscure the fact that the G8's policies are largely to blame for increasing poverty and potentially catastrophic climate change.

A UN report published on June 9th, profiles a world that has achieved unprecedented gains against poverty in Asia, but also one where mothers and children in many parts of the world are dying from causes which are treatable and preventable, and where half of the developing world lacks access to simple sanitation.

With a mindset like Hederman's, there is no acknowledgement of improvement but a claim that the opposite is the case with global poverty. As illustrated above, he appears to suggest in relation to Bolivia, that it would be better off without foreign exploration investment. Hederman doesn't say where funds to develop the energy market should come from. At the same time, every IMF inspired "restructuring" has had bad results and have been geared towards helping multinationals. 

The notion that the template for today's multinational is the United Fruit Company with American gunboats in tow, is quite outmoded but it is common enough to find among people who have never worked in one. 

Generally, around the globe, multinationals provide the best conditions of work and pay in the countries in which they operate. Crucially, the local head of the operation is an employee like everyone else subject to known rules. 

Hederman says that "corporate-driven neoliberalism has its claws firmly embedded in the Irish economy, too. If the controversial Shell pipeline in north Mayo ever becomes operational, 100 per cent of the gas flowing through it from Ireland's Corrib gas field will belong to Shell, which can sell it to Bord Gáis at market prices. Not to mention our Government's determination to hand over our public services to private companies."

The likes of Hederman will always find some issue to support the preset mindset while ignoring inconvenient facts. He says what he is against but beyond keying in an article on a PC, in the real world,  its issues like trying to reconcile Italian shoemakers who protested in Brussels this month against a surge in Chinese shoe imports to the EU, with the need for opening markets to poorer countries, that are not easy to resolve.

Hederman is anti-globalisation - so presumably for protecting Italian workers but he is against the rich countries imposing tariffs on poorer countries. Meanwhile Hederman may not know that 70% of the tariffs currently paid by developing countries are to other developing countries, according to EU Trade Commissioner Peter Mandelson.

Hederman plans to protest against the G8 in Scotland. He says that "some doubt the efficacy of street protest, but had someone written in these pages 20 years ago that within a few years Communism in Eastern Europe would fall, largely as a result of mass street protests, few would have believed it." If it had been street protests alone that had brought down communism, why didn't it happen in Prague in 1968? 

Having seen the muttawa religious police in Saudi Arabia at first-hand, trying to enforce fourteen hundred year old rules as they motored around in air conditioned American SUV's, I am dubious about zealots. I would have respected the muttawa more if they had used camels.

Hederman writes "more people know what neoliberalism is, how damaging it is to the world's poor and to the environment and, crucially, that there are alternatives."

We are not given the alternatives but the answer isn't to support free trade access for developing countries to rich country markets while at the same time supporting trade restriction demands by workers in the rich countries who are at risk of losing their jobs because of globalisation.

Transcript of William Hederman's Irish Times article:

So, the wealthy nations' club has written off the debts of the poor countries. Blair and Brown, with a little prodding from Bob and Bono, have brought out the hidden generosity of the Group of Eight (G8) countries. Why then are so many of us still planning to go to Scotland to protest at the G8 summit on July 6th?

For a start, the offer of debt cancellation to 18 of the world's poorest countries is conditional on those countries restructuring their economies in a way that "eliminates impediments to private investment". These "conditionalities" will cause greater poverty, malnutrition, disease, illiteracy and a widening gap between rich and poor.

Let's take the example of Bolivia. Jubilee South, a network of Southern Hemisphere debt campaigns, said last week the debt cancellation for Bolivia would have "minimal impact in comparison with the ongoing multi-million dollar losses and social-political impact provoked by the policies of water, gas and other natural resource privatisations that were imposed as pre-conditions for debt 'relief'."

The granting of loans and the allocation of aid by the World Bank and IMF (whose policies are formulated by the G8 governments) are invariably conditional on the recipient country "restructuring" its economy to provide the G8 countries' corporations with unrestricted access to its markets, resources and services.

Bolivia possesses South America's second-largest gas reserves, but remains the poorest country on the continent. Its gas reserves were privatised in the mid-1990s, so the revenue accrues to multinational oil companies rather than funding basic services.

Groups such as Jubilee argue that in terms of exploited resources, exploited labour and ecological damage, the rich countries owe the poor countries, more than vice versa. To impose conditions to the debt cancellation constitutes a colonial arrogance reminiscent of the British Empire at its height.

It's analogous to a burglar agreeing to give you back the possessions he stole on the condition that you restructure your home to allow him easier access in future.The rich countries knew their "debtors" could never pay the money (and that it was an unfair debt anyway), so announcing a cancellation of the debt was merely an enormous PR coup, with Bono and Bob Geldof playing the part of the glamour models.

Bodies such as the G8, World Bank and IMF only change when not to change would threaten their existence. Gestures such as the debt cancellation and Gordon Brown's support for the Live 8 concert obscure the fact that the G8's policies are largely to blame for increasing poverty and potentially catastrophic climate change.

Even if the unconditional cancellation of all debts was announced, many of us would still see good reason to protest at - and even blockade - the G8 summit. For these protests are about more than debt relief. They are about resisting neoliberalism, an ideology more globally pervasive than communism or fascism ever were; one which dictates that the market must take precedence over human needs and the environment. Corporate-driven neoliberalism has its claws firmly embedded in the Irish economy, too. If the controversial Shell pipeline in north Mayo ever becomes operational, 100 per cent of the gas flowing through it from Ireland's Corrib gas field will belong to Shell, which can sell it to Bord Gáis at market prices. Not to mention our Government's determination to hand over our public services to private companies.

The G8 is not the solution to poverty and climate change; the G8 is the problem.Bono and Bob Geldof do not go far enough. Asking the G8 leaders to throw the poor their crumbs is not enough. We must obstruct the G8 summit, seek to shut it down, as an act of solidarity with the thousands of Bolivians who blockaded cities this month in an attempt to recover their gas, and with numerous other direct-action campaigns across the developing world. These protests are also about democracy. The G8 constitutes the very antithesis of participatory democracy: eight rich country leaders making decisions for the world's six billion people.

Some doubt the efficacy of street protest, but had someone written in these pages 20 years ago that within a few years Communism in Eastern Europe would fall, largely as a result of mass street protests, few would have believed it.

There is cause for optimism. G8 and other summits have been attracting an ever-bigger response from the world's social movements. Awareness has increased; more people know what neoliberalism is, how damaging it is to the world's poor and to the environment and, crucially, that there are alternatives.

The poor of the world need more than charity and more than debt relief. They need justice. The G8 is an imperialists' club that creates massive injustice in pursuit of corporate profit. The first step in making poverty history is to make the G8 history.

• William Hederman is a journalist at Village magazine. He will be protesting in Scotland as part of the Dissent! protest network