The UK Chancellor Gordon Brown has put forward a bold plan to tackle poverty in
Africa ahead of the G8 Summit of rich countries in Scotland next month.
He called for a doubling of European aid by 2010 and 100% debt relief, as well
as an end to many trade subsidies.
But the plan is facing opposition in the US - and particularly from President
George W Bush.
Mr Bush's stance sets up a possible clash with UK Prime Minister Tony Blair,
due in Washington next week.
Mr Bush said on Wednesday that a key part of the plan did not fit with the
US budget process.
The UK is pushing hard for major debt relief and a doubling of aid to Africa,
and Chancellor Gordon Brown laid out a set of ambitious plans on Friday.
This is not a time for timidity nor a time to fear reaching too high
Gordon Brown, UK Finance Minister
The UK has said that 2005 is a vital year for Africa, and argues that without
significantly more money the United Nations' Millennium Goal of halving world
poverty by 2015 will be impossible to meet.
The UK is one of six European nations who have pledged to increase their aid
target to 0.7% of GDP by that year, a figure which only five countries have
managed to reach so far.
However the US has said that the target is not a realistic one for it to work
US Treasury spokesman Tony Fratto told BBC's Newsnight programme: "The
problem at looking at targets of 0.7% of GDP is that when people focus on numbers
like that they don't know what they are talking about in nominal terms.
"They don't know how much money is available and how much money is in
Speaking in Edinburgh, Mr Brown said he would present the new British proposals
to the leaders of the G8 summit next month, to the European Union, and the UN.
As well as 100% debt relief, Mr Brown wants to set up an International Finance
Facility (IFF) to double development aid to Africa in order to pay for education
and medical programmes like mass immunisation.
BROWN'S FOUR-POINT PLAN FOR AFRICA
100% debt relief to pay for education and health
Launch International Finance Facility for Immunisation
Large increase in direct development aid, doubling of aid from European countries
Removal of export subsidies and all trade-distorting support to agriculture,
which work against producers in the developing world
Source: Chancellor Gordon Brown, 3 June speech
He also said that the EU would double its own aid to $80bn a year by 2010.
But the US remains concerned that the UK is proposing that the debt plans should
be financed in part by selling gold reserves held by the International Monetary
A surge in the price of gold has boosted the value of the reserve, and the
UK wants to use that extra cash.
The US - along with some other countries including Japan, Germany and Italy
- has never been keen on the idea of selling IMF gold.
Washington has also raised questions over the IFF, which would allow developing
countries to borrow against future aid pledges.
Mr Bush said on Wednesday that the IFF for Africa "doesn't fit our budgetary
The US has already pledged to increase development aid through its own Millennium
Challenge Account, but little of the money has been spent so far.
Analysts say the war in Iraq and its related costs have pushed Africa off the
US agenda, and think a change in priorities is unlikely.
"What the UK is proposing is not a cost-free policy," said Marina
Ottoway, a senior associate at Carnegie Endowment in Washington. "Africa
has not really had much of a constituency in the US."
According to Reuters, UK government sources have been talking about pressing
ahead even without US involvement.
Even that may prove difficult, Ms Ottoway explained, since agreements with
the World Bank and International Monetary Fund are multilateral and any changes
would therefore require US backing.
Similar strictures apply to the trade agreements, and the European Union is
unlikely to drop subsidies unless the US does the same, she said.
Mr Brown played down reports of a rift or stand-off between the UK and the
"In my talks over the last few months, but particularly over the last
day or two, with the US Treasury Secretary, we believe that there is common
ground on securing that debt relief," he explained.
"We believe it is going to be possible to reach an agreement on debt relief."
"This is not a time for timidity nor a time to fear reaching too high."