1 May 2004

Here's a birthday present for Live Aid

By Andrew Boswell

Next year marks the 20th anniversary of Live Aid. But where is Africa now? That continent is in a more horrendous a plight than it was back in 1985. Unpayable debts and unfair trade rules keep Africans poor, whilst Aids ravages the continent largely uncontrolled. Sir Bob Geldof, sanctified by some as Saint Bob, has asked global leaders for a 20th anniversary birthday present to the Live Aid generation. Well done, Sir Bob. Let's be in no doubt, Africa needs several leaps beyond the gesture politics seen at Johannesburg and past summits.

Referring to one of the UN Development Goals for 2015, Gordon Brown recently said "on current forecasts, sub-Saharan Africa will achieve our target for reducing child mortality not by 2015, but 2165. This is not good enough."

The UN estimates that it needs an extra $50 billion annually to meet the UN Millenium Development Goals and the challenge to us rich nations is to deliver money and actions, not words. Aid on this scale and without strings might just permanently reverse the endemic poverty and suffering.

Who pays, you ask? Well, Gordon Brown has a crafty financing scheme where rich, donor countries borrow from the international capital markets to underwrite large increases in aid between now and 2015. The French are on board: they hosted a meeting just before Easter to promote the scheme. The US and Germany are less keen, but Britain, as twin president of the European Union and the G8 industrialised nations, next year, has the ideal opportunity to promote this doubling of global aid to $100 billion.

Sounds good, but the scheme has downsides. The donor countries will be expected pay the money back, up to around 2032, out of aid budgets. This undermines stable and predictable aid-flows Africa needs long into this century. Worse, Gordon Brown's scheme ties countries to unhelpful IMF rules, and borrowing countries will also have to agree to trade liberalization, more likely to increase poverty and limit growth.

It is essential that world leaders stop burdening poor countries with these with unfair conditions, and instead underwrite further Aid generating schemes to enhance Gordon Brown's scheme and sustain its benefits beyond 2015. Otherwise, we'll find ourselves wondering in 2025 why the lot of Africa hasn't improved since 2005 and 1985.

Here are two ideas for Messrs Brown and Blair, and the G8. First, impose a minute tax, a fraction of 1%, on the billions traded every day in currency transactions. Better known as Tobin Tax, after Nobel prize winning economist James Tobin, I love this idea - it's a wonderful triple whammy. It will raise vast international revenues to eradicate global poverty, calm financial markets and protect developing countries from the currency fluctuations that can currently reap enormous damage on their economies. I urge readers to support War on Want's campaign for the tax at www.waronwant.org/tobintax.

Second, Messrs Blair and Brown should encourage leaders to part-fund development from a peace dividend from reducing global spending on warfare, now around $1trillion annually. In the light of the horror of Africa, we rich nations must ask honestly if we need hugely, expensive defence systems : "Star Wars", flotillas of large war-ships, or new nuclear weapons.

A Peace dividend is not a new idea: Isaiah referred to turning swords into ploughshares millennia ago. If all nations progressively decreased defence spending by 1% annually into a "ploughshares" Aid fund, approximately an accumulative extra $10 billion would be generated each year. By 2015, this annual Peace dividend would amount to $100 billion - a further doubling of the Aid budget, at the time that the IFF is due to time out.

This triple headed financial plan comprising Mr Brown's scheme, Tobin Tax and a Peace dividend, creates real, sustainable action - it would be a true 20th anniversary birthday present to the Live Aid generation.