August 2–September 13, 2004
Volume 8, Number 4

By Jeremy Rusinek, Jee Lim and Zaria Shaw
G8 Research Group

In This Issue:
G8 Foreign Ministers to Meet September 24
Controversy over Russian Threat of Pre-emptive Attacks
Agreement Reached on Iran Nuclear Resolution
Juncker Becomes Chair of Ero Finance Ministers Board
UK Environment Minister Defines British Priorities on Climate Change
Britain Remains Committed to Africa
Also in the G8 News
Upcoming G8 Meetings

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G8 Foreign Ministers to Meet September 24

G8 foreign ministers will meet in New York Sept. 24 to discuss reforms in the Middle East, including North Africa, at a meeting chaired by U.S. secretary of State Colin Powell. Treasury secretary John Snow will also attend, as will representatives from Middle East countries including Iraq. The meeting is fulfilling the commitment set at the 2004 Sea Island Summit in June to establish a forum for regular dialogue between the G8 and the countries in the broader Middle East.

Source: Jiji

Controversy over Russian Threat of Pre-emptive Attacks

In the wake of the Beslan hostage taking on September 1–3, Russian chief of staff Yury Baluyevsky said that Russia "will take steps to liquidate terror bases in any region in the world." This statement received mixed reactions from other G8 countries and clear concern from Russia’s neighbours. British foreign minister Jack Straw called the reaction "understandable," saying the United Nations Charter gives the right of self-defence and states that the "threat of terrorism certainly entitles any state to take appropriate action." But he did not think that Russian president Vladimir Putin was likely to launch any immediate attacks. The United States was more subdued in its approval. An anonymous source said that "every country has the right to defend itself." On previous occasions the U.S. has warned Russia against taking action in Georgia’s Pankisi Gorge region where the Russian government believes there are Chechen militant bases.

In a joint statement issued by Putin and German chancellor Gerhard Schroeder, the leaders said that "we are aware of our responsibility to do everything possible to protect the life of people from the evil of terrorism. … Russia and Germany will do everything they can to fight all forms of terrorism in accordance with the UN Charter and obligations sealed in Resolution 1373 of the UN Security Council (2001)." The French were more hesitant to give approval of international actions, saying the issue "should be debated within the European framework, the Group of Eight and obviously at the United Nations," according to foreign ministry spokesman Hervé Ladsous. The EU spokesperson for external affairs questioned whether the statement reflected Russian policy. "It’s not clear what the status of these remarks are," EU spokesperson Emma Udwin said. "I would note we have not heard anything similar from President Putin himself."

Both Turkey and Georgia, two countries that border Russia, were pessimistic about Baluyevsky’s remarks. Turkish prime minister Tayyip Erdogan said, "If the world attempts a fight against terrorism in a unilateral way of thinking ... then it won’t succeed in solving the problem."

Agreement Reached on Iran Nuclear Resolution

G8 officials met in Geneva on September 9 to discuss nuclear nonproliferation as a follow-up to commitments made at the G8 Summit in Sea Island last June. The main outcome was a compromise on the wording of a United Nations resolution asking Iran to prove beyond doubt that its civilian nuclear program is not covertly creating weapons-grade nuclear materials.

The resolution, backed by the U.S., France, Germany and England, calls for the International Atomic Energy Agency to make a final determination on Iran’s nuclear weapon capability by November. The U.S. backed down on its demand to have a mechanism that would automatically refer Iran to the UN Security Council for punitive action if evidence of breaking the Nuclear Non-Proliferation Treaty is found or if Iran does not fully disclose all information.

"It’s something that allows the U.S. to say it has a trigger without locking the Europeans into any course of action in the event the IAEA is unable to report in November it is satisfied Iran doesn’t have a weapons program," a diplomat said. The resolution does not explicitly mention the UNSC.

At the meeting, U.S. undersecretary of state John Bolton also discussed South Korea. "We are still interested in knowing all the facts ... but one thing I can assure is that we will not allow a double standard in terms of how we treat the violations," he told a news conference.

South Korea acknowledged during the week of September 3 that scientists from the state-run Korean Atomic Energy Research Institute enriched a trace amount of uranium in three laser tests conducted in January and February 2000. All those attending the Geneva meeting agreed that further information would be needed before any action could be taken in regards to South Korea.

Juncker Becomes Chairman of Euro Finance Ministers Board

Jean-Claude Juncker was named to the position of the newly created Chair of Finance Ministers in the Euro currency zone. The establishment of the so-called "Mr. Euro" is to give a more coherent face to policy decisions and represent the Euro in world currency matters.

Juncker is Luxembourg’s finance minister and will hold the post for two years. He supports the Stability Pact but says there is room for reform, which puts strict limits on deficit spending by member countries.

The position will act as a counterweight voice on policy to the head of the European Central Bank. The chair will also represent the euro at international currency meetings.

UK Environment Minister Defines British Priorities on Climate Change

Lord Whitty, the UK’s environment minister, emphasized the importance of global climate change on August 23 in London at the World Clean Air and Environmental Protection Congress. The Labour government plans to use its influence as president of the EU and chair of the G8 next July to give increased attention to the issues of climate change and pollution.

The UK is one of the strongest supporters of the Kyoto Protocol and has set the goal of creating a low-carbon economy. The Labour government’s Energy White Paper pledges to reduce greenhouse gas emissions by 60 percent by 2050. The paper highlighted the need to ensure energy supply and the need to reduce carbon dioxide emissions. UK greenhouse gas emissions in 2003 were estimated to be 14% below 1990 levels, with carbon dioxide emissions were approximately 7% lower than in 1990.

This has led to an emphasis being placed on renewable energy sources and a further debate on nuclear power in the UK. Many oppose nuclear power and support the alternative forms of renewable energy.

Lord Whitty stressed that all action to forward the climate change debate will require clear, concerted effort and combined local, national and international responses. He has the support of British prime minister Tony Blair, who declared climate change as one of seven priorities for the Labour government this year.

Sources: The Guardian, ePolitix, Daily Record

Britain Remains Committed to Africa

British foreign minister Jack Straw reiterated the UK’s commitment to Africa as a priority during next year’s G8 Summit on his trip to South Africa on August 26 and 27.

"Our hope is that the Commission for Africa will lead and shape the international debate, and produce a set of recommendations which stretch the limits of international ambition. If the key points of those recommendations can be adopted by the G8 and the EU, and then by the UN Millennium Review summit in September 2005, the Commission will indeed have put Africa back at the top of the international agenda, and set that agenda for the next decade," said Straw at Cape Town.

The Commission for Africa was established by Tony Blair in April 2004 and is composed primarily of Africans. It was formed to make recommendations to the world community on what steps should be taken to bring prosperity to the continent.

Straw’s visit to South Africa was mainly to discuss bilateral relations and continued co-operation between the two countries internationally.

Sources: Cape Times, Buanews, The Independent, Business Day

Also in the G8 News

• The AIDS Vaccine 04 conference opened on August 30 in Lausanne, Switzerland, attended by more than 700 participants from more than 50 countries, with a call for more transparency, co-operation and co-ordination between the different organizations involved in HIV vaccine development. Dr. Anthony Fauci, Director of the U.S. National Institute of Allergy and Infectious Diseases, insisted that the most important issues limiting progress remain scientific ones. He expressed his full support for the Global HIV vaccine enterprise, for which he and others had called in 2003 and which has been endorsed by the leaders of the G8. (Source: Aidsmap)
  
  
• Rodrigo Rato, managing director of the International Monetary Fund, visited Argentina on September 2 and said that the IMF would not oppose Argentina’s decision to suspend the loan program, but that it also hoped that Argentina would resume the agreement soon. Argentina is in the middle of one of the largest sovereign debt restructurings in history. Its government had hoped that Rato would use the visit to recommend that the IMF’s board allow Argentina to defer a US$1 billion payment due in late September. Bondholders were hoping that Rato would use the visit to pressure the Argentinean president Nestor Kirchner into returning to the negotiating table. (Source: New York Times)
  
  
• The think tank Policy Exchange confirmed in August that Britain accepts the most asylum seekers in the world – the report confirmed a 2002 OECD study. In 2003, Britain accepted 61,050 new claims, 18% of which will normally be approved – the highest approval rating among the G8 nations. The report suggests that the English language and a successful economy with low unemployment attract claimants to the UK, as well as a generous benefits system. The international community has complied with commitments on accepting asylum seekers under the 1951 UN Convention on Refugees. Nicholas Boles, head of the Policy Exchange, described the UK’s system for dealing with asylum as fundamentally not honest system. He criticized the government for its policy toward asylum seekers and for lax enforcement of quotas. For the moment, the government feels a responsibility to assist anyone suffering from fear of persecution, and the UK now has the third largest refugee population among the G7. (Sources: The Guardian, Scotsman, Daily Record, Birmingham Post, Daily Post, BBC)
  
  
• A global immunization campaign of US$4 billion will be launched in 2005 after talks between British and French governments, the World Bank, the Global Alliance for Vaccines and Immunization (GAVI), and the Bill and Melinda Gates Foundation in August. The vaccinations will provide immunization for up to 3 million children in developing countries against easily preventable diseases including tetanus, measles, polio, diphtheria, whooping cough, hepatitis B, yellow fever and gastroenteritis. The program will be funded by 15-year government-backed bonds floated on financial markets. The UK treasury expects that pledges of US$400 million a year in private and public money could generate 10 times that amount by the bond sales. Any extra money will be spent on programs in 56 low-income countries and on the provision of more affordable vaccines in middle-income states. The global immunization project is the beginning of a long-term plan to buy new and under-used vaccines, launch campaigns to provide nationwide immunity and stockpile oral polio vaccine in an attempt to eradicate the disease. (Sources: Daily Mail, The Hindu, The Guardian)
  
  
• Russia and Canada signed an agreement on August 4 that would have Canada help Russia pay to disarm nuclear submarines. Twelve subs will be destroyed over four years at a cost of CA$116 million. The cash will come out of Canada’s pledge to the G8-led Global Partnership Against the Spread of Weapons and Materials of Mass Destruction of $1 billion originally announced at the 2002 Kananaskis Summit. "Funding this initiative is a key element of our international security agenda and a high priority for Canada under the G8 Global Partnership announced at Kananaskis," said Pierre Pettigrew, Canadian foreign affairs minister. (Sources: Globe and Mail, Bellona, AFP)
  
  
• The International Monetary Fund has offered to assist Nigeria in repatriating an estimated US$4 billion hidden in foreign bank accounts by the country’s former leader General Sani Abacha and his government officials. The IMF has been supportive of Nigerian efforts to create a more stable banking and finance system, and has stressed the importance of the G8 Transparency Initiative and African Peer Review Mechanism. There have been successes particularly in Switzerland where more than US$500 million in embezzled funds has been returned to Nigeria. (Sources: This Day, Daily Times of Nigeria, BBC)
  
  
• German deputy economics and labour minister Alfred Tacke will leave the government to take a position as CEO of STEAG on January 1, 2005. The company is Germany’s largest coal producer. Tacke is Chancellor Gerhard Schroeder’s G8 sherpa and is also the official responsible for approving the €10 billion acquisition of gas supplier Ruhrgas by utility giant E.ON AG, which partly owns Steag. (Sources: Bloomberg, Reuters)
  
  
• On August 19, the Non-Aligned Movement released a statement saying that the G8’s extension of the Heavily Indebted Poor Countries Initiative was a good start but more debt relief was needed to help impoverished countries recover. The statement was released after a NAM ministerial meeting in Durban, South Africa. NAM is the world’s second largest organization of nations after the UN. (Sources: Jakarta Post, Business Report)
  
  
• The G7 finance ministers have officially invited China to participate as a guest at their quarterly meeting on October 1 in Washington DC. The push to invite the Chinese was led by the U.S. and Japan. The Chinese will likely be pressed to speed up the process of moving the yuan to a flexible exchange rate. The yuan has been pegged at 8.28 to the U.S. dollar since 1995.

Upcoming G8 Meetings

• G8 Foreign Ministers, September 24, 2004, New York
  
• G7 Finance Ministers, October 1, 2004, Washington
  
• G8 Summit, July 6–8, 2005, Gleneagles, Scotland
  

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