How rock stars and UK NGOs shaped the G8 agenda, 19 June 2013

Niaz Alam, Dhaka Tribune op-ed 19 June 2013

It may seem a long way from the Concert for Bangladesh in 1971 to the G8 summit at Lough Erne in Northern Ireland this week.

But amid the communiqués about Syria and transatlantic trade deals, much of the summit agenda set out by the UK government on the summit website is focused on international development, with three interlinked goals announced to advance trade, tax compliance, and transparency.

Much of the credit for bringing international development to the top table in this way can be traced to the successes of UK NGOs and their celebrity supporters in lobbying successive UK governments and in entrenching support for overseas aid amongst a large part of the British public.

The agenda reflects the size and status of the Department for International Development (DFID also known as UKAID) and its role in policy making, which was advanced in 1997 by the reinvention of Britain’s former Overseas Development Administration into DFID as a distinct Cabinet department separate from the Foreign Office, as part of the then new Labour government’s vaunted “ethical foreign policy” stance. This was boosted dramatically by a pledge to strive to increase funding towards the UN General Assembly’s 1970 target for rich countries to give 0.7% of gross national income (GNI) in foreign aid.

At the time, Britain’s aid budget represented only 0.26% of GNI in line with the G8 average so DFID’s budget was “ring-fenced” along with the NHS by a pledge to receive year on year budget increases in real terms.

Remarkably, despite major political changes including the sidelining of proclamations of “ethical foreign policy” particularly after Tony Blair’s controversial support for the US led invasion of Iraq in 2003, DFID and its ring-fenced budget have survived even the election in 2010 of a coalition government formed by the rival Conservative and Liberal Democrat parties. Thus it fell to the Conservative Chancellor George Osborne in March 2013, to announce that the UK had become the first (and so far only) G8 country to achieve the UN General Assembly’s target of 0.7% GNI to overseas development. (The others being Canada, France, Germany, Italy, Japan, Russia, and US)

Admittedly this came some time after the leading European advocates for the 0.7% target had met the goal – notably Denmark, Luxembourg, Netherlands, Norway, and Sweden – but they are outside the G8.

The achievement of the 0.7% funding target is noteworthy in the context of the global economic crisis and is particularly remarkable because ring-fencing the aid budget at a time when the UK is facing record borrowing deficits, attracts a huge amount of criticism, particularly from core Conservative supporters.

UKAID donations to India and Pakistan in particular are regularly lambasted in the media by critics arguing that it is not the UK taxpayer’s duty to fund social welfare spending in these states which both have large military budgets and burgeoning middle classes that are reluctant to pay more tax.

That the Conservative-led coalition should maintain the ring-fenced aid budget in the light of attacks which call for such protection to only be reserved for the more widely popular NHS, is testament to the generational consensus that emerged among the leaders of the three main political parties at the 2010 UK general election, to maintain commitments to UKAID spending.

In turn, the reaching of this consensus can be directly attributed to long running campaigns by UK NGOs to raise the profile of international development among the British public, significant portions of which consistently gives a large amount of financial and political support for their aid and development goals.

The Live Aid concerts for famine relief in Ethiopia in London and Philadelphia masterminded by Bob Geldof and the BBC in 1985 gave a massive fillip to the profile of aid issues worldwide, raising over £50m in a day.

In an interview for the release of the Concert for Bangladesh DVD in 2005, Bob Geldof directly credits George Harrison’s 1971 concerts as an inspiration for his pivotal event. Unlike the Ethiopia appeal, the very name of the Bangladesh concerts at a time when liberation was far from assured in August 1971 was a political statement in itself, as George Harrison himself noted in his 1980 memoirs.

The Concert for Bangladesh itself both reflected and inspired the work of existing British charities working on both famine relief and development issues – and set a new benchmark for celebrity endorsed fundraising.

In particular, in 1979 it inspired a Bangladesh style series of rock music benefit concerts (which have been largely forgotten because of 1985’s Live Aid) for UN sponsored relief in Cambodia following Vietnam’s overthrow of Pol Pot’s genocidal Year Zero regime the previous year.

None of these laudable causes is above criticism, of course. Tax disputes with UK and US authorities held up much of the millions of dollars raised for UNICEF from the best-selling Concert for Bangladesh albums and films for many years, for instance

More significantly, there is of course the wider question of whether aid (except for immediate relief) is fundamentally worthwhile at all.

As Bangladeshis and other developing country citizens have long been aware, the flow of money from remittances far outweighs the flow of aid from rich countries of the global North to the South – and trade and industrial development more generally play the most significant part in actually raising large populations out of absolute poverty, as China as demonstrated.

So apart from the obvious public good of humanitarian relief, and as recognised by many of the charities involved themselves, the longer term value of celebrity endorsed fundraising comes in its impact in raising awareness and in increasing lobbying of rich nation governments to take aid and development country trade issues, more seriously than in the past.

Within the UK in particular, such awareness has been regularly topped up by innovative bi-annual telethons raising money and profile for development issues under the banners of the Comic Relief and Sports Relief charities which were created in the aftermath of the original Geldof inspired 1984 Band Aid charity single.

By both encouraging mass participation (via sponsored sports events in Sports Relief and the public wearing of comedy noses on Red Nose Day for Comic Relief) and holding high profile fundraising telethons, in which it is not unusual to get the prime minister to take part in a comedy sketch alongside leading performers – and controversial topics (where the money goes/what it should be spent on) are not shied away from in explanatory documentaries, Live Aid (and the 1970s concerts and campaigners that inspired it) is still having an impact.

Its legacy lives on partly in the commitments by UK politicians to protect development spending and in the role of successive UK prime ministers in highlighting development when they host the G8 summit.

This was last done in 2005 when the UK government was heavily lobbied by the Make Poverty History coalition of NGOs to seek new commitments for development spending and the Millennium Development Goals from G8 leaders at the summit it hosted in Edinburgh that year. This broadly successful campaign was given higher profile by the parallel Live 8 concerts for Africa – which despite drawing deserved criticism for not showcasing African artists – forms part of the continuum of regular profile raising campaigns exemplified by events such as Comic Relief.

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“As the UK reaches the internationally recognised target of spending 0.7 per cent of national income on foreign assistance, it is worth noting the special place you have earned in world affairs as a result of your approach to helping the poorest. Quality of life is improving worldwide, and British taxpayers (not to mention Red Nose Day participants) deserve a disproportionate share of the credit. Critics argue it’s immoral to spend money abroad when the domestic economy is slumping. I see it differently. By taking a methodical approach to saving lives, you’re displaying moral leadership in front of the world. This will be a source of British influence around the globe for years to come.”

Bill Gates, Daily Mail March 17, 2013

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Interestingly, this year’s G8 summit places a large degree of emphasis on tax and transparency as key issues. In an interview on Saturday to Sky television, UK Prime Minister David Cameron pledged that every G8 country would be signing up to a transparency commitment on “beneficial ownership” to identify the ultimate owners of companies.

This is a particularly significant turn of events as tax and transparency have traditionally been ignored in UK by all bar a small determined group of policy campaigners such as the Tax Justice Network (TJN). With the exception of the satirical fortnightly Private Eye, which has consistently highlighted anomalies in tax collection and criticised a “revolving door” between top accountants and senior civil servant positions, much of the UK media traditionally sidelined tax issues until very recently.

Occasional exceptions were made for celebrities who can be accused of hypocrisy, notably U2 frontman Bono, (the Irish singer who featured prominently at the Live Aid and Live 8 concerts and like Geldof has been ubiquitous for his anti-poverty campaigning at political summits,) whose band moved part of its income from the already artist-friendly tax regime in Ireland to a Netherlands tax shelter.

Even in such cases, most commentators’ default stance has been to defend private decisions so long as they legally permitted. However, media exposure in the UK of the scale of (perfectly legal) tax minimisation strategies adopted by global brand names such as Google, Starbucks and Vodafone towards the end of 2012, opened the floodgates for a glut of such stories worldwide in 2013.

As Richard Murphy of Tax Research UK pointed out on the 10th anniversary of TJN, these issues have risen up the public agenda so fast because the global “financial crisis has exposed the structural weaknesses of public finances across the world, ushering in austerity programmes that are rapidly widening existing inequalities. Tax competition pressures are building up, accelerating the race-to-the-bottom on corporate tax payments (which have been exposed by the media’s new found interest in taxation affairs).”

One clear priority for G8 leaders in addressing tax and transparency issues on their agenda is to satisfy voters in their own countries that they are adequately collecting taxes from highly profitable companies. However, all governments share a common interest in maximising their own tax base and the UK government via DFID has supported initiatives to research and improve (the largely very low) taxation collection rates in developing nations such as Bangladesh.

In his interview, Mr Cameron expressed hope that “the whole world will move towards public registers of beneficial ownership, ” which advocates agree could be a helpful move in limiting tax evasion and avoidance globally.

He said: “One of the ways corrupt dictatorships take money off their people … is putting it into opaque companies, nominee companies that could be based anywhere in the world. You’re never going to deal with that unless you actually know who owns every company.”

This new assertive tax stance by government does not go far enough for many campaigners who point to the huge scale of the task involved. Only in 2011, Nicholas Shaxon author of Treasure Islands: Tax Havens and the Men Who Stole the World, estimated that up to a third of the world’s offshore wealth is either controlled through the City of London or conducted in British overseas territories. Writing in the Guardian Shaxon observed:

“More than half of world trade passes, at least on paper, through tax havens. More than half of all banking assets and a third of foreign direct investment by multinational corporations are routed offshore. An impression has been created in sections of the world’s media, since a series of stirring denunciations of tax havens by world leaders in 2008 and 2009, that the offshore system has been dismantled, or at least tamed. In fact quite the opposite has happened. The offshore system is in very rude health — and growing fast.

It is no coincidence that London, once the capital of the greatest empire the world has known, is the centre of the most important part of the global offshore system. The City’s offshore network has three main parts. Two inner rings – Britain’s crown dependencies of Jersey, Guernsey and the Isle of Man; and its overseas territories, such as the Cayman Islands – are substantially controlled by Britain, and combine futuristic offshore finance with medieval politics. The outer ring comprises a more diverse array of havens, such as Hong Kong, which are outside Britain’s direct control but have strong links.”

Hence it is not surprising that Hubert Hughes, the chief minister of Anguilla, an overseas British territory in the Caribbean, complained to the Guardian last week about the UK government’s new found evangelism, stating that: “It is a matter of hypocrisy because when I look at the City of London – they should do something about that first and not try to shelter behind these little territories that are just trying to survive. We are not tax havens as such, we are offshore centres. The City of London is one of the biggest tax havens in the world – it is the biggest money laundering centre in the world.”

Nonetheless, following a meeting at Downing street on Saturday, at which Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man were all represented, Mr Cameron was able to announce ahead of the G8 meeting starting on Monday that he had secured agreement from Britain’s network of overseas territories and Crown dependencies to sign up to his proposed new clampdown on tax evasion.

It remains to be seen how fruitful and effective the G8’s decisions will be in meeting this goal.

Whilst it can be argued that the financial crisis and recent media attention has done the most to focus minds, it is interesting to reflect the summit agenda also owes a good deal to NGO campaigners in raising the issue and cultivating public support over the years.
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