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2005 Gleneagles Summit Analytical Studies

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Impressions of the 2005 Gleneagles Summit

Victoria V. Panova
18 July 2005

The 31st summit of the Group of Eight industrialized democracies took place on July 6-8, 2005, at the fashionable golf resort of Gleneagles, Scotland. [1] The priority topics for the meeting were declared by the British prime minister Tony Blair last October, with another announced at almost the last moment, so that the agenda focused on African development and climate change along with fair trade issues. Prior to the meeting, the most attention was given to the topics of African development and climate change as well as the possible compromises and standoffs within the G8, especially between the Blair and the French president, Jacques Chirac. [2] But in the end, the tragic events that happened in London’s tube stations and the bus changed the landscape of the event considerably.

July 6, the first day of the Gleneagles Summit, was of no real substance, for the afternoon was devoted to greeting arriving leaders (Chirac arriving last from Singapore) and 7 p.m. dinner with the Queen. The second day was to be reserved in part to the outreach session to discuss climate change with the five most dynamic developing countries of Brazil, China, India, Mexico and South Africa and the heads of the International Energy Agency (IEA), the International Monetary Fund (IMF), the United Nations, the World Bank and the World Trade Organization (WTO). After the news of horrifying terrorist acts came, however, Blair decided to go to London after being briefed on the scope of the event and with the firm support of the rest of the leaders; at the same time, it was decided that the summit proceedings would not by any means be interrupted and the session went on, with Jack Straw (British foreign secretary) coming to replace Blair on climate change discussion and until his arrival Michael Jay (British sherpa) taking over the political issues part of the discussion. [3] Blair was absent for seven hours and returned later that night to brief his counterparts on the information obtained from his security forces and also to be present for the next day of talks. [4] No documents were actually produced at the end of the day.

All Blair’s bilateral meetings on July 6 were cancelled, including the one with Russian president Vladimir Putin. That left three bilaterals for Putin on July 7th: with Thabo Mbeki of South Africa, Junichiro Koizumi of Japan and Paul Martin of Canada. [5] The bilaterals were covered widely by the press and, although important as independent events, nevertheless are only a sideshow for the G8 encounter, and do not contribute greatly to the overall process.

I should note here that this summit was distinguished also from the point of view of everything being done at the last moment, be it agreement on the final documents, the setting up of the G8 countries’ headquarters or other aspects of the summit process.

Thus the first working day of the Summit was devoted to the questions of climate change, clean energy and sustainable development along with the political ones. From the very start the issue of climate change appeared to be very contentious. It was all but clear that those issues would cause considerable debate within the G8, especially between the U.S. and the Europeans. There was also speculation among journalists a few days before the summit started that either the climate change document would be the G7 one versus the U.S. or no agreement whatsoever would appear. [6]

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That is why it is not surprising that the document on climate change was only agreed upon at the very last moment. Forecasts of failure appeared in press after The Guardian published the leaked document on the course of the negotiations in June. Thus, the G8 sherpas had to meet July 1 and 2 to prevent a scandal, and worked on the wording of the documents until the very last minute in to the night of July 6.

One can see how contentious it is by the fact that the document was rewritten seven or eight times, while usually it takes much fewer drafts to come to common ground. Although most of the paper was sorted out the day before at a late-night sherpa meeting, a few phrases were still left for July 7. That remaining text did not directly concern Russia and was being co-ordinated mostly at a bilateral level between the U.S. and Great Britain.

The Europeans argued from the start that the document is not as ambitious as it should have been, but if it had been it would not have been accepted by the U.S. in the first place and would also invoked certain reservations from Russia and Japan. Thus in the end the document did not consist of specific commitments and was rather ambiguous. The big debates were on concrete targets for reducing greenhouse gas emissions. Russia argued that it is helpful first to discuss the issue at the scientific level and only then bring it to the G8 forum. There was also an attempt to hold a meeting of presidents of the academies of sciences of the eight countries.

In addition to the declaration on climate change, clean energy and sustainable development, the leaders adopted a rather long ten-page plan of action, with formulas that allowed each G8 country to interpret the problem in its own way. Also it is interesting to note that no less than four fifths of the plan are devoted to energy issues, the priority topic of the next year’s Russian G8 presidency. It was stressed that there is a great need to develop new technologies (both within the G8 meetings and at the outreach session) as well as in reducing carbon dioxide emissions. The developing nations declared that they would support the idea only if it would not contradict the development interests of their own economies. It was stressed that rich industrial countries are to assist and share technologies with the developing states so that the reduction in carbon emissions would not to be a big burden on the poorer states.

With the first day of the summit devoted considerably to the issues of global economy, a document was adopted on the situation in the global economy and international oil market. From the beginning, it was supposed to be a voluminous and far-reaching document, but the G8 countries failed to provide any comprehensive and innovative ideas. At the end, there was another one-page document with non-contradictory and non-obligatory formulas. The leaders did agree that global growth in 2004 was strong and will remain so in the future. But at the same time the G8 acknowledged that global challenges remained, given special attention to persistent global imbalances and high and volatile oil prices. For the first time in the G8 history, however, special recommendations on national economies were forwarded to each of the G8 countries, including Russia (its recommendations were joined with those of the EU countries). Thus Russia was thus acknowledged as and important systemic element of the world economy. [7]

Rapid economic growth has led to an increase in global demand for energy supplies and high, volatile oil prices, with the U.S. and China noted as the frontrunners in energy consumption. During the G8 discussions, the most articulate speech came from Germany’s Gerhard Schroeder, who argued that it is necessary to introduce conditions for fair price formation, with all the parties – both suppliers and consumers – co-ordinating their efforts. Although everyone agreed that world dependence on carbon fuel has decreased over time, Koizumi made a very interesting observation: he reminded his colleagues of the 1970s energy crisis, when high inflation followed, but pointed out that in Japan today, with oil prices soaring, deflation Japan continues. Thus in today’s conditions, modern economies are able to adapt to oil prices.

A big share of the discussion was devoted to the necessity of investing in alternative energy resources, mostly in conducting research on auto engines. At the outreach session with the five fast-growing economies it was agreed that modern economy requires flexibility, although it still involves being dependent mostly on oil and gas (with greater emphasis on gas later on). U.S. president George Bush stressed Russia’s importance to the functioning of the world economy as the sole big stable oil exporter, given that although the countries of the Persian Gulf and Venezuela are well supplied they are risky in terms of regional and internal instability. Putin agreed and noted that at the moment Russia was extracting up to 470 million tons of oil a year, with the bulk being exported. He added that Russia is doing everything possible to raise its oil production and invest more in developing transport infrastructure. He dwelled on the projects of pipelines in Asia in greater detail, disclosing the wells and routes to the Pacific Ocean to be used and talking about construction of the oil pipeline from Siberia to the White Sea (thus providing mostly American consumers), routes to Novorossiysk and the Baltic transport system.

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Putin also spoke about the plans of transporting gas along the northern route of the original Russian-German-Ukrainian gas pipeline project. From the very start, Ukraine has rejected the proposal and has been uncooperative, but the other sides have not lost hope. The Russian president also talked about developing new technologies in gas liquefaction and the growing interest of American energy consumers in the plans, as well as possible future competition in the market. During this session, it was made known that the topic of sustainable energy will be taken up at the 2006 Russian-hosted summit and that Russia will do its share of work in order to provide for sustainable economic growth.

Another important issue for Russia and very much in its interests was the passage in the statement on "Global Economy and Oil" that acknowledged that there should be a shared responsibility by both oil-producing and oil-consuming countries and further investment in related infrastructure, emphasizing the role to be played by the International Energy Forum, not the IEA (of which Russia is not a member). It was more difficult for Russia to accept the agreement to increase transparency and a universally agreed reporting system for oil supply and demand (data on oil reserves have been kept secret since the Soviet times), even though this is beneficial in the long run. Russian officials have now made several proposals to enhance the Joint Oil Data Initiative put forward by several international organizations (and by Germany within the G8) by encompassing the whole production process from oil extraction to the final stage.

The declaration on international trade concentrated mostly on the Doha round. It was quite difficult for the G8 countries to agree to a co-ordinated text and in the end all that was left was just one page, since Doha round has not yet been quite successful. Some of the countries even refused to confirm the commitments made at the WTO ministerial in July 2003. In the "Trade" statement, one will find no specific concrete ideas, and leaders just call for an "ambitious" but "balanced" result, which is in fact contradictory.

At the same outreach session, the director general of the WTO, Supachai Panitchpakdi, made a highly critical intervention before the leaders, arguing against the existence of all forms of subsidies. During such meetings, leaders always agree on the necessity of alleviating subsidies, but as soon as the problem goes to the ministerial level, each representative starts interpreting the case differently, leading to stalled negotiations in Geneva. According to Panitchpakdi, leaders must provide the impetus, although during the summit no specific decisions were taken for the Hong Kong ministerial later this year, especially concerning agricultural issues. Bush said that his own trade secretary had warned him not to raise the issue, but nevertheless all the eight leaders acknowledged the necessity of lifting trade barriers in order to reduce the practice of intraregional trade.

Another statement was issued on "Reducing IPR [intellectual property rights] Piracy and Counterfeiting Through More Effective Enforcement." This is a new issue to be taken up by the G8 as a separate issue. The document mentions that the fight should be waged both within the G8 and abroad. Although first plans for this topic were ambitious, the final document came again to be a one-page statement. Nevertheless several interesting ideas can be found within it, such as the decision to convene the meeting of the G8 experts in the field of fighting piracy and counterfeit, with the follow-up mechanisms and progress reports due for future G8 summits (at first the deadline for a progress report was the St. Petersburg Summit, but in the end the leaders adopted a more flexible formula).

The leaders also issued the "G8 Response to the Indian Ocean Disaster, and Future Action on Disaster Risk Reduction." Although the tsunami happened a half a year ago, it was considered important to take up the topic, and to point out that the proper reaction of the international community had followed (noting that more than US$9 billion has been donated from around the world from both the public and private sectors). Some interesting initiatives can be found in the document, such as the initiative on strengthening prevention mechanisms and the UN’s role in dealing with the natural disasters of this kind.

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Four documents on political issues were not agreed upon until the last moment, with the sherpas and political directors meeting on the night of the July 6. Three were on the regional issues of the Middle East settlement, Iraq and Sudan-Darfur, with the fourth on non-proliferation.

On the issue of the Middle Eastern peace settlement, the G8 leaders listened to the report of Quartet special envoy James Wolfensohn, who talked about the necessity to provide Palestinians with jobs and housing. He argued that it should be demonstrated to the Palestinian people that international aid and investments can make their lives better, in the realm of security and economic growth and that for these ends up to US$3 billion of aid is needed per year over the next three years. But Wolfensohn underlined that this funding should come not only – indeed, not mostly – from the G8 countries: it should come primarily from the Arab world. The leaders discussed plans for developing infrastructure, the security system, education, health and housing; in other words, they discussed plans to improve the quality of life of the Palestinians. All the leaders also praised Israel’s planned withdrawal from Gaza and stressed once again (as they have in their statements every year) strong support for both sides to meet their commitments to the Roadmap.

The evening sessions was devoted to the issues of Broader Middle East and North Africa (BMENA), Syria, Lebanon and Egypt, but it led to the discussion of fighting terrorism. During this session, Putin made quite an emotional intervention. He reminded his colleagues that a year ago, over dinner, he had told Blair that Russian counterterrorism efforts have separate character: western countries do not perceive Chechen rebels as terrorists, although they constitute a big, well-organized group that in fact acts better than the G8 leaders. He added that in order for international terrorism not to take over, the G8 leaders must acknowledge that terrorism in all its forms and all its motivations is a threat that must be countered from a co-ordinated common stance. After the attacks in London, this position was supported by everybody, even the traditionally liberal and tolerant British; Blair said that he did understand the problem and perceived it differently now.

On the issue of Syria and Lebanon, the G8 leaders stated that under international pressure Syria has withdrawn from the neighbouring country and now Lebanon has the historic opportunity to establish a democracy and develop its economy.

A declaration on terrorism was among the documents planned for release, but the London attacks resulted in last-minute changes to make a stronger statement. Those attacks also meant that the document was not issued on the first day. It was the Russian President’s idea that the G8 statement on the terrorist attacks be a joint one, rather than separate declarations by the leaders, thus delivering a message of a united stand against the global threat and a show of resolve to uphold the most deeply held principles of all the G8 countries.

The issue of Iraq was also quite contentious, but the leaders nevertheless came to conclude that it is important to join together in their efforts to that elections take place for a new government under a new constitution by December 15, 2005, and also to make state institutions work. They agreed that the U.S. and its allies are to leave Iraq (in the form of the Multinational Force [MNF-I] mandated by UN Security Council Resolution 1546), although no specific time frame was set.

The "Gleneagles Statement on Non-Proliferation" turned out to be a summary of the present situation with regard to weapons of mass destruction (WMD) and their delivery, especially in the context of the existing threat of their use by terrorist groups. The G8 confirmed the importance of all existing related documents and conventions and acknowledged the role played by the UN Security Council in addressing the challenges of proliferation as well as the work done by the International Atomic Energy Agency (IAEA). The general wording supported the G8-launched or -affiliated initiatives such as the Proliferation Security Initiative and the Global Partnership against the Proliferation of Weapons and Materials of Mass Destruction created at Kananaskis in 2002. Traditional concerns were expressed over North Korea’s nuclear program and its reluctance to return to Six Party talks (which seemed to be a united position taken by all the G8 countries – and soon after the Gleneagles Summit North Korea started showing signs of possible compromise and a return to the negotiating table). Another country of Bush’s "axis of evil," Iran, received firm and rather careful wording. The G8 welcomed the European troika and the initiative of the EU High Representative for long-term arrangements and economic incentives for Iran in return for a final suspension of nuclear fuel enrichment and reprocessing activities. Although there was no reference in the documents, the leaders hailed the Iranian dialogue with Russia, especially the agreement to bring back spent nuclear fuel.

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The final day of the high-level meeting was devoted mostly to Africa. The British host had decided that with ten years left before the deadline for the Millennium Development Goals (MDGs) this G8 summit would be a moment of opportunity for Africa. The G8 leaders, with Blair as chair, hosted an outreach session with the heads of several African states and international organizations. [8] According to those at the discussion, it was not as fruitful as the regular G8 sessions and had a "fragmented" character, mostly due to the lack of time. Each of the visitors stated his position and then the eight leaders gave their reaction, with practically no substance.

Although Blair presented the document on Africa as a huge breakthrough on the most important frontlines, it did not create much of a sensation. Being quite ambitious at the very start, it was not as substantial as many had anticipated. As already noted, the document was not agreed upon until the very last moment. The main reservation on the part of Blair’s G8 partners was that most of the figures put forward by the British presidency were unrealistic, although Blair still managed to push through the figure of doubling aid to developing world to total to US$50 billion a year, with US$25 billion going specifically to the African continent. It was also carefully observed that the report published by the Commission for Africa in March should not have been quoted, for it was a mechanism set up by Tony Blair without consulting his G8 colleagues: Blair appointed the commission members on his own, with no representation from the G8 countries other than Canada and thus ought not to be affiliated to the G8.

None of the countries was prepared to specify an exact percentage of their budgets to be directed for these ends. But in addition to an ambitious (although still to be seen how effective) figure of US$50 billion in aid, the cancellation of 100 percent of the debts of 18 countries agreed by the G8 finance ministers at their pre-summit meeting on June 10-11 will also provisionally amount to US$40 billion (although one of the representatives of the Russian Ministry of Finance said in the coming years the figure will reach US$55-59 billion), with Russian share coming to US$750 million. It was argued that in the past two years the sum of US$2.2 billion has already been forgiven within the HIPC initiative (with the big share for Ethiopia, which totalled US$1 billion). [9] However, one should not be misled by the declarations, because the relief will not follow immediately. For a country to prove it is eligible for the procedure, it must present to the commission all the necessary data over the coming year. Debt relief will take place only after all the conditions are met. [10] The biggest share of debts will be written off within the framework of the International Development Association (roughly around US$44.5 billion), with the rest written off by the World Bank and the IMF (the initiative must also be officially supported by the shareholders of those financial institutions, after which the burden will be distributed among the participants, so that the funds in those institutions remain at the same level). The U.S. will naturally have to write off the biggest sum. Russia will roughly have to pay around US$13 million a year to those organizations.

Russian officials believe that the question is not in how to provide additional funding, but in how those funds are used. A representative of the Russian Academy of Sciences representatives remarked that approximately US$300 billion was allocated to the African countries as official development assistance (ODA) as of June 2002, but not much progress was made. Moreover, when ODA started, there were no failed states on the African continent; they appeared only 10-15 years later. As a result, much less real money is available to Africa, with claimed, net inflowing amounts at US$8-9 billion. [11]

A follow-up commitment was also adopted by the G8 leaders with regard to the peacekeeping capabilities of the developing countries, mostly in Africa. It amounted to the increase of the peacekeeping forces trained and equipped by the G8 countries from 75,000 to 95,000 people, and confirmed the G8 commitments to assisting the African Union forces in Sudan-Darfur as well as their continued co-operation with the Anti-Terrorism Centre in Algiers. A separate statement was issued by the G8 leaders along with the African Union on the regional issue of the conflict in Sudan, where the G8 hailed the AU mission in the country and noted its vital role in enhancing security on the ground, protecting civilians, allowing the humanitarian response to function and giving the political talks a chance of success. It was underscored that the G8 is heavily engaged in the problem and so far has committed US$460 million, and that it cooperates with the AU through the EU and the North Atlantic Treaty Organization (NATO). The G8 members also have already committed almost US$3.5 billion for Sudan over the next three years.

Among the questions that were not discussed – but were supposed to be raised by some very anti-Russian politicians and media – were the issues of the post-Soviet states and the problem of the functioning of democracy in Russia. During the discussion, one leader even gave a spontaneous evaluation of all the fuss. He said that knowing Russia more than anybody else at the table and having a great affection for the country, for many years he had been watching what has been happening inside Russia and said that, after seeing what two previous leaders (namely Mikhail Gorbachev and Boris Yeltsin) did, Vladimir Putin has every right to do what he is doing and, moreover, that is the only right thing to do, and the outside world ought to thank the Russian President for implementing those reforms.

The rest of the documents issued at Gleneagles were progress reports, including a follow-up for the Secure and Facilitated International Travel Initiative (SAFTI) and the G8 Global Partnership Annual Report, with consolidated report data from the Global Partnership Working Group identifying the individual countries’ contributions, and the report on the BMENA initiative with the Forum for the Future launched last year by Bush at Sea Island, as well as the Africa Progress Report.

Thus the G8 Gleneagles Summit of 2005 stands apart from the other G8 summits. The procedures were usual for the G8 working sessions, with no innovative mechanisms introduced or no "back to the beginnings" as was the case of previous British presidency at Birmingham in 1998. It would have been a regular summit if not for the terrorist attacks on London, as odd as it may seem at first sight. Although the tragedy took away a considerable portion of attention that would have otherwise been directed to the world richest and most powerful countries (it still feels as though one should add "plus Russia"), the attacks provided for the relative success of the summit. It would be very ambitious and still arguable to say that the revolutionary commitments made in regard to Africa and a common although not quite substantially supported stand on climate change were possible due to Blair’s active lobbying of the issues as well as to a great degree due to the necessity to demonstrate the united front against terrorism and to achieve somewhat tangible results that terrorists could not prevent an elite club meeting that was in fact an encounter of the willing to help developing countries reach economic prosperity and political stability and security. In other circumstances, the outcome could have been more modest.

As far as Russia’s interests are concerned, the last day of the Gleneagles Summit demonstrated that all the speculation about a possible setback on Russian membership in the club was unfounded. The G8 leaders accepted Vladimir Putin’s invitation for the next encounter to be held in St. Petersburg with the priority topics to be, as expected, energy security and education.

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Notes

[1] The Group of Eight has been meeting since 1975. The first encounter in Rambouillet, France, gathered together six leaders; the next year Canada was included, which made it the G7. Since 1977, representatives of the European Union have also been present at the meetings. During the 1990Õs the USSR and then Russia made it into the club, which became the G8. [back to text]

[2] The main points of differences among the European leaders were clear after the failure of the EU summit, with great debates over the farm subsidies, and "no" vote for the European constitution in France and the Netherlands. Also contentious were the differing views among the G8 countries over the declared priority topics, with an unclear outcome. Furthermore, London's victory over Paris in the race for the 2012 Olympics risked considerably spoiling the mood of Chirac and contributing to the strain in British-French relations. [back to text]

[3] It was also noted by sources in the Russian delegation that to the contrary the events in London led to even more co-ordinated, clear-cut and fruitful work among those involved. [back to text]

[4] At first Blair thought the terrorist acts were mostly likely connected to the start of the G8 Summit, but later on newspapers revealed that the attacks had been planned for May, thus dashing G8-related assumptions. [back to text]

[5] At the meeting with Mbeki, PutinÕs official invitation to visit South Africa was confirmed. The leaders discussed the co-operation between the two countries in mining (manganese ore in the Kalahari mines) and aviation industries as well as military technological co-operation. At the meeting with the Japanese prime minister, Putin and Koizumi agreed that the date of Putin's official visit to Japan would be around November 20-22, after the Asia-Pacific Economic Co-operation summit in Busan, Korea. At the Canadian-Russian bilateral, one of the main topics was the issue of Canada's support to Russia's accession to the WTO. At recent negotiations, Canadian representatives had raised questions agreed upon earlier, which were not of direct concern to Canadian economy; Putin asked Martin to intervene and make sure progress can be made. [back to text]

[6] Those familiar with the way this elite club functions will know that no G8 country would allow for disagreements or a crackdown to prevail and thus discredit the united western front on the international arena. If there are profound divergences within the club, then the members would either drop the issue completely or (as happens most of the time) adopt a document with no substance and only general wording. [back to text]

[7] We still have to wait for September meeting of finance ministers in Washington DC to see whether there will be the full-fledged financial G8. [back to text]

[8] Thabo Mbeki of South Africa, Olusegun Obasanjo of Nigeria (also present as chair of the African Union), Meles Zenawi of Ethiopia, Benjamin W. Mkapa of Tanzania, John Agyekum Kufuor of Ghana, Abdoulaye Wade of Senegal, Abdelaziz Bouteflika of Algeria as well as Paul Wolfowitz, head of the World Bank, and Rodrigo Rato, head of the IMF. [back to text]

[9] Although Putin has already said that Russia considers other mechanisms of assistance to the less developed countries (LDCs) to be more effective, Russia will continue with the debt cancellation. [back to text]

[10] Actually some see this decision as not very well thought through. For example, Nigeria is rich in minerals and holds seventh place in the world in oil exporting, which makes it a strange entry in the list of LDCs that require special measures by the international community; its inclusion might raise protests from the less privileged and poorer countries of the developing world. Nigeria has also started exporting gas, and if it realizes its project to export more than 22 million tons of liquid gas, it will occupy the first place in the world. The decision to include Nigeria into the list was pushed through by the U.S. and Britain (it will also be done on a bilateral basis). Russia is to forgive about US$30 million to the country. [back to text]

[11] It was interesting to note that "love" for Africa increased after the destabilization of Iraq: the traditional ally – Saudi Arabia – became less stable, and the U.S. had to diversify its oil-importing network even more, switching partially to Africa (where there are oil supplies in Equatorial Guinea, although it has a rather tough military regime). [back to text]

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