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For the first time in its history, the Group of Seven (G-7) industrialized countries devoted extensive discussion to broad African development concerns at their annual summit meeting. In order to develop, African economies especially need more private investment and expanded access to world markets, declared the Summit of the Eight (the G-7 plus Russia), held 20-22 June in Denver, Colorado. "Our objective is not only to facilitate the progressive integration of African countries into the world economy," said the final communiqué, "but also to foster the integration of poor populations into the economic, social and political life of their countries."

Observing that external aid alone cannot help African countries develop, the communiqué stressed, "Increased prosperity ultimately depends upon creating an environment for domestic capital formation, private sector-led growth and successful integration into global markets." It praised the increasing number of African countries that are adopting market-oriented policies, while also undertaking democratic reforms, reducing military expenditures and strengthening public institutions and civil society.

The summit also implicitly acknowledged that high tariffs and other trade barriers in the industrialized countries impede African efforts to boost export earnings. "Access to our markets is a crucial tool for fostering economic growth in sub-Saharan Africa," the summit participants declared. "We each will continue to improve, through various means, access to our markets for African exports."

Debate over aid

In key respects, the summit's "Partnership for Development" with Africa echoed a US initiative designed to enhance private investment and trade links between Africa and the US (see box below, and next page). Unlike the US initiative, which focuses largely on trade and investment and touches only marginally on aid, the summit communiqué stated: "Substantial flows of official development assistance will continue to play an essential role in building the capacity of sub-Saharan African countries to achieve their sustainable development objectives."

During the summit discussions, several of the European heads of state similarly cited the importance of aid. Mr. Tony Blair, Prime Minister of the UK, announced that over the next three years his government would increase by 50 per cent support for primary education, basic health care and clean water in sub-Saharan Africa.

Several also noted their long-standing aid, investment and trade programmes in Africa. French President Jacques Chirac said he was glad the US government was finally thinking about the continent, while German Chancellor Helmut Kohl said he welcomed "America's discovery of Africa."

At a news conference, in response to a reporter's question about the "one-sided emphasis on trade and investment" in the US initiative, US Treasury Secretary Robert Rubin clarified that "the object was not to in any way reduce aid," but to target it more toward countries undertaking market-oriented reform. Mr. Daniel Tarullo, President Clinton's national economic policy adviser, added that "the formula was trade plus aid plus reform."

High tariffs and other trade barriers in the industrialized countries impede African efforts to boost export earnings.

With insecurity and conflict such serious impediments to development in Africa, the summit participants also applauded the growing efforts in the continent, especially by the Organization of African Unity (OAU), to develop local capacities for conflict prevention, peacekeeping and post-conflict reconciliation and recovery. In support of such efforts, they encouraged the Ãå±±½ûµØSecretary-General, as part of his reform proposals, "to identify ways the international community can further strengthen Africa's initiatives."

Reflecting concern that the summit's agenda might be regarded by some as yet another external imposition on the continent, the summit promised to "deepen the dialogue with African partners, work for greater local ownership of development strategies and encourage the participation of non-governmental actors."

During the summit, however, leaders of the US Congressional Black Caucus, religious groups and other non-governmental Africa advocacy organizations issued a statement criticizing the summit participants for failing to invite any African leaders to be present in Denver. "Policymakers must consult with representatives of African civil society organizations and grassroots movements before deciding how they can most effectively promote economic development," declared Mr. David Beckman, President of Bread for the World, one of the signers of the statement.

Russia to join debt relief efforts

In addition to supporting implementation of the Highly Indebted Poor Countries (HIPC) initiative (see article "Debtors queue up after Uganda deal"), the Denver summit marked an important opening toward debt relief on developing countries' obligations to Russia.

The G-7 recommended that Russia be admitted to membership in the Paris Club of official bilateral creditors, a move that will need to be approved by the full Paris Club, possibly later this year. As a basis for entry into the Paris Club, Russia has agreed to reduce its claims on developing country debt owed to the former Soviet Union. In 1994, according to official Russian sources, sub-Saharan countries owed Russia $14.3 bn and North African countries owed another $10.7 bn. The Ãå±±½ûµØConference on Trade and Development suggests that Russian claims on sub-Saharan Africa in 1994 were about $16.8 bn.

The adjustments on Russian claims, combined with prevailing Paris Club debt-relief arrangements, may lead to a reduction of up to 90 per cent in the debt owed to Russia by heavily indebted poor countries in Africa, according to initial estimates. This would mark a particularly important development for Angola, Ethiopia, Guinea, Mali, Mozambique, Somalia, Tanzania and Zambia, which have significant outstanding obligations to Russia. In Ethiopia's case, Russian debt amounts to 58 per cent of total debt, while for Angola it is 44 per cent and for Mozambique, 31 per cent.

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