ODI researchers respond to the G8 communique

18 June 2013

Marta Foresti, Head of ODI’s Politics and governance programme said:

‘Not a revolution after all’

“The success of the G8 was to be judged on concrete commitments on key areas such as tax transparency and extractives. On tax, the communique falls short of delivering hopes for commitments on open registries on beneficial ownership. The language focuses heavily on the word ‘should’. On extractives, the G8 falls back on what is already in place: EITI, US and EU legislation.  The ball is now in the corners of the EU and the OECD to make sure many of these steps are actually implemented.

On open data we do get concrete commitments: an Open Data Charter to be implemented by the end of 2015 at the latest and a commitment to review progress at next meeting in 2014. On aid data, an agreement to apply Busan Common Standard on Aid Transparency, including both the Creditor Reporting System of the OECD  and IATI by 2015. These were the low hanging fruit - we must reach higher.”

Anna Locke, Head of ODI’s Agricultural development and policy team said:

‘Heading in the right direction on land but a missed opportunity to join up the dots’

“Land is somewhat buried in the communique and there is a risk that may hide some good progress, particularly in the g8 joining forces to support implementing the voluntary guidelines on governance and tenure and recognising the importance of participation in land tenure decisions. Despite this progress, the g8 have missed a chance to join up the dots on two fronts. Firstly, stable land tenure, and fair and considered decisions on land are the lynchpin for responsible investment and the good investment climate referred to in other parts of the communique. Secondly, the communique presents some good ideas on sharing information on companies, taxes and profits across countries. Joining up that information across the different themes would shine a light along the value chain, enabling host countries to make more informed decisions on agricultural investment and the investors that would best promote development.

Publishing more information on land deals is crucial. However, the communique falls far short of acknowledging the support that needs to be provided in order for more information to lead to better decisions, including building capacity in civil society organisations and media to use that information; and support to governments and local communities to negotiate better deals in the first place.”

Dirk Willem te Velde, Head of the International Economic Development Group said:

The G8 was innovative but follow up is key, especially at the G20

"The Lough Erne G8 summit included various innovations whose value will depend on follow up. G8 summits have the power to shift political capital and public attention to critical development issues. The G8’s development agenda had a habit of focusing on re-allocations of aid but this year the development impact of the G8’s beyond-aid policies on tax, trade and transparency has been at the centre of attention. The communique and the summit’s preparations have explicitly linked G8 core policies with development, a very good first step in articulating a beyond-aid development agenda. A broad interest in tax and development issues is likely to continue.

However, the 3Ts will benefit developing country growth most when certain conditions are met. The EU-US trade deal helps developing countries only when it is trade creating rather than trade diverting, so the coverage of the agreement matters– and developing country need complementary policies to reap benefits. G8 transparency (e.g. on land) works best when this is met by improved developing country governance; and new tax rules could lead to a redistribution of profits, which could be used by developing countries to boost growth, although this is not guaranteed.

Thus, the value of commitments on trade, tax and transparency will depend on the design and implementation of detailed action plans that involve both G20 and other countries. The real innovation of this G8 could be on embedding and developing the broader deliberations on core G8 policies into a detailed multi-year action plan on development to be agreed at the forthcoming G20 summit in St Petersburg in early September 2013. "