How the rich rely on exploitation of poor countries' resources 
Andrew Simms
Guardian Wednesday March 6, 2002 

The advert in a glossy colour magazine tells you "how to balance your desires with your needs". Apparently, the answer is to spend £18,000 on a very powerful, sleek Italian sports car that has four doors to make it practical. 

If someone living in sub-Saharan Africa wanted to balance their desires with their needs by purchasing the car, they would have to save a lifetime's income, and then borrow nearly another decade's worth. Life expectancy in the region has fallen to 43 years, its lowest level since records began. It would take more than 51 years to save for the car. One person's need is another person's distant mirage. 

In 12 days' time, the UN meets in Monterrey, Mexico, to work out how to pay for meeting basic human needs enshrined in a set of millennium development goals. But the meeting's political significance - it is the first time the UN has taken a lead on finance instead of the World Bank and IMF - is betrayed by perpetuating a self-serving myth of the wealthy. 

George Bush and the leaders of other rich countries will be attending. It is expected that poor countries will have to swallow painful and unproven policy pills to get anything from Monterrey. As a pre-condition for receiving aid, developing countries are required to open their markets to globalisation and privatise their utilities. This new fashion for aid "selectivity" has reinvented the Victorian notion of a deserving, and an undeserving poor. But what about the undeserving rich? 

There is an explosive irony in the debate on finance for development. As the wealthy world fails again to meet its international aid commitments, the poor world daily lends its environmental capital to pay for the creature comforts of the global rich. 
Long-term management of the natural capital of the soil, seas and atmosphere is an easily forgotten pre-condition for all economic activity. No planet, no business. 
But the rich measure only financial debts. The cost to the environment and its value is not taken into account, even though that debt dwarfs all others. The value of coral reefs is clear - for example, as fish breeding grounds, cleaning the seas and attracting tourists - but they are frequently destroyed for development. A greater threat to them is global warming. 

The simplest example of this growing cost to the environment for which the developing world pays the price is burning fossil fuels. It should be regarded as a debt owed by the developed world for the mismanagement of the atmosphere, and its associated costs. 

Already the economic damage attributable to climate-change- driven natural disasters has been put at more than £200bn per year. 

At least five small island states are at risk, due to global warming, of ceasing to exist in the next 30 years. For example, sea level rise in the range expected by the Inter-governmental Panel on Climate Change would devastate the Maldives. While relatively few people live in small island states, in Bangladesh 20 million could be displaced, and up to 10 million could be forced to flee in the Philippines, while millions more in Cambodia, Thailand, Egypt, China and across Latin America would be threatened. 

The link between our wealth and comfort, and their upheaval, is inescapable. Fossil fuels provide 87% of commercial primary energy, but burning them adds to climate change. If you were to peel off the proportion of the wealth of the Group of Seven industrialised countries that relies on the unsustainable consumption, per person, of fossil fuels it would add up to around £9-11 trillion per year. 

Conservative estimates suggest that the OECD spends around £45-60bn per year on energy subsidies, including fossil fuels and fossil fuel-based activities to make the problem worse. Embarrassingly less goes to helping the victims adapt. 
In 1992, the Earth Summit said an £80bn cash injection from rich countries was needed so that poor countries could achieve sustainable development. But, during the decade since, aid has declined. 

The main conduit for sustainable development funds is the Global Environment Facility (GEF). It administers three new funds under the Climate Convention and Kyoto Protocol. In 1999-2000, GEF funding for climate change was under £1bn. Only £139m was grant funding; the rest was "leveraged through co-financing". 

At climate talks in Bonn, in July 2001, rich countries pledged £0.3bn per year by 2005 to help developing countries "manage their emissions and adapt to climate change" - a fraction of 1% of the amount spent subsidising dirty energy at home. 

The declaration expected from Monterrey, however, currently contains no references to environmental issues and their relationship to global finance. As government delegations fly to Monterrey, they should remember that development that does not balance the ecological books, is not development at all. 

Andrew Simms is policy director of the New Economics Foundation. The UN Finance for Development conference was in Monterrey from March 18-22