G-8 punts on food security … to the private sector

Sophia Murphy, guest blogger, and Timothy A. Wise
(also available in
Portuguese at INESC)

The G-8 met this past the weekend in the United States. Three years earlier the group of the most powerful industrialized nations met in L’Aquila, Italy, just as food-price spikes were sending millions into poverty. They stepped up to the challenge, with a three-year, $22 billion pledge of aid for agricultural development to address the food crisis.

Well, three years is done and, apparently, so is the G-8 commitment to address the food crisis. How else to interpret the sad excuse of an aid program that is “The New Alliance for Food Security and Nutrition.”

According to President Barack Obama, who unveiled the program before the G-8 convened May 18, this is a commitment to “raise 50 million people out of poverty” in Africa in the next ten years. How? Mobilize private sector money. Already some 45 private companies have been brought in, creating a partnership with G-8 governments and some African governments. The initial commitment from the private sector is worth $3 billion, and the first three recipient governments are Tanzania, Ethiopia and Ghana. To qualify to join the alliance, according to the press release, African governments must, “refine policies in order to improve investment opportunities.”

How bad is this idea? Money is money, right? Wrong! The private sector is not just like government, only a little different. It is ENTIRELY different. Corporations are accountable to their shareholders, obliged to make a profit.  They are not charities. They are bound by law, but not by the public interest. They are not bound by the outcomes of the Paris and Accra Aid Effectiveness conferences, which committed donors to allow and encourage national ownership of development spending and to better coordinate their efforts. They are not bound by the five Rome Principles, agreed by over 60 Heads of State at the 2009 World Food Summit, which reinforced the aid effectiveness outcomes focused specifically on donor investments in agriculture. Corporations are not parties to the human rights covenants that oblige most governments to realize the universal human right to food.

Already the requirement that African governments “improve investment opportunities” sounds hauntingly like the conditionalities of old (and current, much-criticized, bilateral investment agreements) and nothing like the country-led, accountable and transparent aid policies that donors have pledged themselves to follow in the last several years.

As ActionAid International’s recent report on implementation of the L’Aquila initiative shows, the promises were important, coming on the heels of two decades of declining investment in agriculture and what proved to be a complacent and misplaced reliance on international trade to ensure countries’ food supply. We applauded these funding commitments in our review of food security policy since 2007, published in January this year. We also warned that the pledges were not enough, that they were time-limited and threatened by budget cutbacks, and that they did not put enough new money into some of the most forward-looking programs, such as the new Global Agriculture and Food Security Program (GAFSP).

That program’s “public sector” aid sets many of the right priorities, focusing on small-scale farmers and women, on more sustainable agricultural practices, and on providing aid to “country-owned” programs, ones that developing country governments have approved and manage under program guidelines. These correspond to the Rome Principles. These are important advances, yet now most rich country donors are dropping these programs in favor of the private sector without even making good on their original pledges.

While some new programs were created, including the U.S. government’s Feed the Future initiative, budget support for this kind of work seems to be drying up. ActionAid’s report shows that only 22 percent of the pledged money was actually spent in the first two years. And that less than 25 percent of the donor spending on agriculture after L’Aquila respected the commitment to work with countries that had developed nationally-owned agricultural development plans. Now, the money’s drying up and we are asked to believe that Vodaphone and Monsanto and PepsiCo (three of the firms signed up to the alliance) are going to turn things around. Much easier to see how they are eyeing new markets for their cell phones, genetically engineered crops and fast food outlets.

This is a tremendous setback for international efforts to address the food crisis. In our report, we warned that the heavy focus on public-private partnerships and market-based mechanisms could undermine the efforts to marshal public funds for the kind of agricultural and rural development that the world’s least developed countries most need. Now it has. The United States has reportedly made a new commitment to GAFSP, but G8 pledges overall are slow in coming. This leaves the private sector to pick up the slack and call the shots, with none of the accountability that came with GAFSP and other donor programs.

The announced alliance did not get a very warm welcome from civil society. In a letter anticipating the G-8 announcement (in French), sent to the President of the African Union on behalf of ROPPA, the association of peasant agriculture associations of West Africa, and signed by 14 other civil society platforms, the donor-foreign investor axis to determine Africa’s food security was firmly rejected:

I would simply like to recall that food security and sovereignty are the basis of our general development, as all of the African governments underline. It is a strategic challenge. This is why we must build our food policy on our own resources as is done in the other regions of the world. The G8 and the G20 can in no way be considered the appropriate fora for decisions of this nature.

Sophia Murphy is a senior advisor at the Institute for Agriculture and Trade Policy, a regular contributor to the Triple Crisis Blog, and the co-author, with Timothy A. Wise, of the report
“Resolving the Food Crisis,” which they presented in a previous blog post.

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5 Responses to “G-8 punts on food security … to the private sector”

  1. […] from: G-8 punts on food security … to the private sector » TripleCrisis This entry was posted in Blog Search and tagged aquila, challenge, food, pledge, price, sending, […]

  2. Mei says:

    $8 billion secretly taken out of Ethiopia – UN report
    . 2012 | Filed under Corruption,Report | Posted by admin

    Over 8.3 billion dollars left Ethiopia in 18 years when Prime (crime) Minster Meles Zenawi seized power in 1991, an amount comprising an average 3.6pc of its GDP, a damning and first of its kind study, conducted by the United Nations Development Programme (UNDP), revealed.

    This is part of the one trillion dollars that is believed to have left LDCs over the years covered by the study, an amount estimated to be 10 times larger than what these countries receive from rich countries in the form of official development assistance (ODA).

    Ethiopia’s loss of over eight billion dollars in the past nearly two decades represents an average of 3.6pc of the amount it has received from its development partners during the same period, the study revealed.

    Read full report (pdf)


    Related report
    48 Poorest Countries Lost US$197 Billion From 1990-2008; Serious Impediment to Development Efforts

    Global Financial Integrity

    Source: Financialtaskforce.org

    ISTANBUL, Turkey – A United Nations Development Program (UNDP) commissioned report from Global Financial Integrity (GFI) on illicit financial flows from the Least Developed Countries (LDCs) was presented for discussion yesterday at the United Nations IV Conference on Least Developed Countries hosted by the Republic of Turkey.

    Written by GFI Lead Economist Dev Kar, the report, Illicit Financial Flows from the Least Developed Countries: 1990-2008 (PDF | 1.75 MB), examines how structural characteristics of Least Developed Countries could be facilitating the cross-border transfer of illicit funds, discusses methodological issues underlying estimates of illicit flows, presents an analysis of the magnitude of such flows, and makes policy recommendations for the curtailment of these illicit flows.

    In her opening remarks for the UNDP Conference yesterday, UNDP Administrator Helen Clark said, “Illicit flows seriously impede LDCs’ efforts to raise resources for social and economic development. These flows are often absorbed into banks, tax havens, and offshore financial centers in developed countries.”

    Key findings of the report include:

    * Illicit flows divert resources needed for poverty alleviation and economic development.
    * Approximately US$197 billion flowed out of the 48 poorest developing countries and into mainly developed countries, on a net basis over the period 1990-2008.
    * The top ten exporters of illicit capital account for 63 percent of total outflows, while the top 20 account for nearly 83 percent.
    * Based on available data, African LDCs accounted for 69 percent of total illicit flows, followed by Asia (29 percent) and Latin America (2 percent).
    * Trade mispricing accounts for the bulk (65-70 percent) of illicit outflows from LDCs, and the propensity for mispricing has increased along with increasing external trade.
    * The top exporters of illicit capital (cumulative outflows) are:
    1. Bangladesh, US$34.8 billion,
    2. Angola, US$34.0 billion
    3. Lesotho, US$16.8 billion
    4. Chad , US$15.4 billion
    5. Yemen, Republic of, US$12.0 billion
    6. Nepal , US$9.1 billion
    7. Uganda, US$8.8 billion
    8. Myanmar, US$8.5 billion
    9. Ethiopia, US$8.4 billion
    10. Zambia, US$6.8 billion
    * The factors that drive illicit flows from LDCs may be broadly classified into three categories—macroeconomic, structural, and governance-related. It is likely that structural and governance issues are driving the bulk of illicit outflows, but this needs to be examined on a case-by-case basis.

    The GFI report on LDCs was commissioned by UNDP as a contribution to the United Nations IV High Level Conference on the Least Developed Countries in 2011. Read the UNDP press release on the report here.

  3. […] been heavily critiqued by civil society groups; its potential perils are covered well in a recent blog post by Timothy A. Wise and Sophia […]

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