TORONTO (Reuters) - Rich countries came up short on fund-raising promises for poor nations and will meet on Friday to figure out how to direct aid resources at a time when their own budgets are squeezed.
The Group of Eight nations meet in Huntsville, Ontario, north of Toronto, on Friday, having fallen an estimated $18 billion short of a 2005 pledge to raise their combined aid to the poorest countries by at least $50 billion.
The G8’s meeting in the sleepy lakeside community provides a respite from Toronto’s hectic urban pace and the difficult tasks that await the larger Group of 20 summit on Saturday and Sunday.
The United States, Britain, Canada, Japan, Italy, France, Germany and Russia make up the club of G8 members.
Although the G8 cannot avoid talking about its own economic troubles — namely the strength of the global recovery and the state of public finances — the smaller group wanted to carve out some time to discuss problems facing poor countries, G8 officials said.
Canada, host of the G8 and G20 meetings, wants to ensure that donor countries follow through on their commitments.
The hosts also want mother-and-child health and the rebuilding of Haiti from a devastating earthquake to be the focus, officials said. Haiti was invited to attend the G8 meeting along with Jamaica and some African countries.
The United States is pushing for more agricultural investment in Africa and has created a fund to boost food production in poorer countries.
The G8 will discuss progress toward meeting the eight U.N. Millennium Development Goals, or MDGs, on poverty by 2015. The group will also review the $18 billion shortfall in reaching the $50 billion total pledged in 2005 at the G8 summit in Gleneagles, Scotland.
The Gleneagles meeting also promised to provide an extra $25 billion a year for Africa as part of the overall $50 billion increase in financial assistance by 2010. Citing figures from the Paris-based Organization for Economic Cooperation and Development, the World Bank said the G8 had provided just $11 billion of the $25 billion for Africa.
In a report prepared before the summits, the World Bank urged rich countries to make good on their aid pledges, warning that poor countries were vulnerable to any setbacks in the global economic recovery.
It urged rich countries to secure the economic recovery, arguing that the resources of poor states were already overstrained by the last two years of the economic crisis, which has hit exports and worker remittances.
Development groups called on industrialized countries to renew their aid commitments from Gleneagles, arguing that rich countries should not be let off the hook when many African governments had kept their pledges to follow policies that promoted growth and tackled corruption.
“We’re asking them to make good on those pledges over the next two years,” said Mark Fried, policy coordinator for international development group Oxfam. “They need to set clear targets to come up with the money they missed,” he added.
Fried said African countries had lost an estimated $63 billion since the global financial crisis began in 2008 through lower export earnings from a collapse in demand and declines in foreign aid.
Reporting by Lesley Wroughton; Editing by Peter Cooney