Spice Up G8 with No Regrets, by Iain Murray

The suggestion that the Spice Girls are about to re-form may not seem like major international development news, but the upcoming Live 8 concert on July 2 at which Ginger, Baby, Scary, Posh and the other one will probably perform does give us a good opportunity to reconsider the real problems facing the world.<?xml:namespace prefix = u1 /> <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />


That is because Bob Geldof, the legendary Boomtown Rats frontman and convener of the original Live Aid concert in 1985, has explicitly tied the concert to the aims of the Make Poverty History campaign. The group, creditably, wants to end world poverty, and part of the purpose of the event will be to influence the July G8 summit, which will concentrate on the questions of African poverty and Climate Change.


There is a lot about Make Poverty History's agenda that makes sense. They oppose export subsidies, which distort trade at the expense of the developing world's poor. They also advocate the cancellation of debt. In some cases, this makes sense—why should former banana republics that are striving to join the modern world be penalized for the actions of past despots they have overthrown?


Yet Make Poverty History advocates that developing countries adopt protectionist policies even as developed countries open up their markets. This ignores some basic economic facts. The wannabe deliverers of the world's poor somehow believe that free trade is not “fair”—however they define “fair”—and that the exchange of goods and services in an open market merely shifts wealth from the poor to the rich rather than create wealth for all. This goes against even the most basic economic principles: that trade promotes economic progress and that the invisible hand of the market directs buyers and sellers towards activities that promote the general good.


As the Globalization Institute points out, “trade justice” is best promoted by an open market free from subsidies—on either side—not by forcing buyers to pay over the odds for low quality products. The trade protectionism for developing countries that Make Poverty History recommends is a rat trap of gigantic proportions for the world's poor. Consider that, for decades, <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />India was one of the countries caught in the trap, seeing its living standards fall during the 60s and 70s as the exact strategies recommended by Make Poverty History were implemented there. Since India began to liberalize, its economy has grown and its poor have become less poor. Make Poverty History's “trade justice” approach is a recipe for more poverty.


And that is the exact problem with the solutions that are being proposed by the environmental lobby for the two issues at the G8 summit. The two become one in that the solutions proposed are twin recipes for disaster. Just as you cannot alleviate poverty in Africa by managing trade, you cannot protect the world from the supposed damaging effects of global warming by starving the world of affordable, reliable energy. Energy use is inextricably linked to economic growth. Forbidding the use of affordable natural resources by developing countries in powering their economies is like asking the Spice Girls to play without a backing track. It can be done, but the results will not be pleasant.


Instead, the developing and developed economies alike should adopt the policy that has proven so successful in protecting humanity from the ravages of the environment: looking after no. 1. For example, Florida suffers from hurricanes just like Bangladesh, but few people are killed in Florida even during an intense season like last year's, while, in Bangladesh, 138,000 were killed by one cyclone in 1991. Economic development saves lives. We should be attempting to raise Bangladesh to the level where, even if global warming were to lead to more severe weather events—something of which there is as yet no evidence, whatever the alarmists say—Bangladeshis will be able to weather out the storm as Floridians do. Increased, not reduced, energy use and real free trade will be the twin keys to that happening.


That is why the G8 conference should consider “no regrets” policies as the solution to the developing world's problems. “No regrets” policies will be beneficial whatever happens; they will help Africa grow and reduce the damaging effects of potentially dangerous global warming. The great benefit of such an approach is that it doesn't ask too much of either the United States or the developing world.


Such policies include:


  • Further trade liberalization, including an end to the European Union's damaging agricultural subsidies (although this Make Poverty History-approved action could be another example of the dreaded “neoliberalism” that the French wish to stop).

  • Deregulation of the energy and transportation industries, which would allow greater innovation in the development of newer, cleaner technologies (Ironically, part of the reason the U.S. emits so much CO2 is because the Clean Air Act makes upgrading to cleaner power generation technologies too expensive).

  • Increase global agricultural research funding by around 20 percent, which would aid in feeding the hungry in Africa and make their food sources more resilient in a warmer climate (and would also help save the rainforest as less land would be needed for food). This would also enhance water security, since most of the fresh water currently consumed around the world goes for agricultural use. And that would greatly help the survival of fresh water species. It could all go like clockwork.


It has also been calculated that annual expenditures of around $1 billion per year could cut the current death toll from malaria by 50 percent, something that even stopping climate change altogether could not do. What this all means is that if we want to reduce poverty and stop global warming harming us, we should say goodbye to expensive schemes like aid programs and the Kyoto Protocol and hello to these much less expensive, much more effective no regrets policies.


If the performers at Live 8 were to endorse these policies, the poor might indeed be rocking all over the world in a few decades' time, instead of starving. It's unlikely, though. Nevertheless, anything that gets Ginger Spice back into her Union Jack minidress will be worth supporting.