TCS Daily


When Bush Meets Blair

By Roger Bate - June 7, 2005 12:00 AM

WASHINGTON -- Britain's Prime Minister, Tony Blair, arrives in town this week to discuss the state of the world with President Bush. But it's someone not present in Washington that may determine the success of the meeting -- Blair's Finance Minister, Gordon Brown. For while it's common knowledge that Bush owes Blair a huge favor for backing him in Iraq, what Blair may need most is a way to show he is in charge without terminally undermining Brown, his increasingly powerful Prime Minister in waiting. And that is going to be difficult because Brown's pet aid project, to be debated at the G8 meeting in Scotland in a month, is absurd.

The meeting will also be important for George Bush since his administration has done such a bad job of rewarding its war allies. UK, Australia, Poland and the rest have not exactly benefited from sticking their necks out against extremely unhappy electorates in backing the President. No reconstruction contracts or trade benefits have accrued to these defiers of Old Europe and Mr. Bush needs to show support for his staunchest ally this week.

Blair -- who will be president of the E.U. for a six-month term starting in July, and chairman of the G-8 -- is hoping that the president will reach out to Europe at the G-8 conference next month in Scotland. However, the two issues that Blair really wants to push at the G8 meeting have problems for Bush -- climate change and Africa. The first causes the most significant rift between Blair and Bush because of the US withdrawal from the Kyoto Protocol. Even though the US spends far more on clean fuel technology and climate research than any other nation, it is seen as a pariah by climate alarmists and Blair will want to coax Bush back to the post-Kyoto negotiations table. While what will happen over the long haul is difficult to predict, there is nothing on this issue that the President will want to offer Tony Blair this week given Europe's inability to come close to meeting its targets for greenhouse gas reductions.

So that leaves Africa. Blair wants to address poverty in Africa because he truly believes it's the right thing to do; but also because the left-wing of his party wants him to do it. And it was the extreme left that deserted him, almost costing him his Prime Ministership, for engaging in the Iraq War. But here he runs into Gordon Brown, who is desperate to appear statesmanlike ahead of his likely succession to Blair. Brown has staked a lot on his calls for removal of agriculture subsidies, 100% debt write-off to Africa, a doubling of international aid, and the development of a new financial instrument to achieve better aid results.

Agriculture subsidies are grotesque; they are wasteful for western taxpayers and deprive Africans limited export opportunities. But while his economics on subsidies is spot on, Brown's analysis on debt write-off is not. It is patently unfair for democratic governments to be saddled with the debts of previous despotic regimes, especially when loans have given no benefit to the people. But there is absolutely no good reason to write off loans to a government that has simply wasted funds, or bought arms with money destined for health and education projects. Doing so simply condones bad behavior. As for doubling aid, there are often instances where even current levels of grants and loans cannot be absorbed by the recipient nation. For example in combating AIDS, drugs and funds are available but there is simply neither the expertise nor the infrastructure on the ground to deliver treatment to the number anticipated in most countries in Africa. Doubling aid in this area would increase the salaries payable to the few experts on the ground, which evidence shows may pull them from more valuable work, such as child immunization projects. Also, making drugs more available without proper medical supervision is dangerous for the patient and encourages drug resistance.

But the most absurd part of the Brown initiative is the new financial mechanism envisaged -- the International Finance Facility. All one really needs to know about this facility is that it is supposed to oversee dispersal of up to $50 billion within a few years with apparently very little new bureaucracy. Yet the World Bank, which has decades of experience, 10,000 of the best development staff in the world and oversees loans of $20 billion a year, admits that many, perhaps most, of its projects fail -- and that's its own internal assessment.

Perhaps exposing Brown to the prickly realities of the African diplomacy will cool his desires for the IFF. While promoting his vision for aid to Africa, he also asserted that it's time for Africa to help itself, and that the "days of Britain having to apologise for its colonial history are over." This led to complaints from South African President Thabo Mbeki that he was peddling "imperial nostalgia." Brown will learn that Africa will take the money, but on its own terms.

The best Blair can do is ask for increased selective aid from America, which Bush can probably agree to, while dropping the IFF. This will give the left of Blair's party something to cheer about, it will support Brown's aid efforts, while shooting down the IFF initiative. Of course the aid may not work, and may simply encourage more wasteful spending, but that issue is for later, not for now.

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