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Huff Puffing Tories and Pro-poor growth: Can’t do it at home, won’t do it abroad.

7 February 2014

At the most recent DFID question time in Parliament, Tory MP, Nick De Bois, put it to Justine Greening that “encouraging democracy among the people is wasted when the leaders seem not to wish to practise it”. Dictators around the world would be rubbing their hands with glee at such sentiments if they were not so busy ferreting away national resources in Swiss banks.

A week later, Conservative MP, Peter Bone, slammed DFID for investing in improvements to garment factories in developing countries that supply the likes of Primark and River Island. “These companies should be improving their supply chains because it’s the right thing to do, not because they are going to get a Government grant to do it.” he puffed in the Daily Mail. Of course in principle Bone is right, companies should invest in their supply chains because it is the right thing to do, but in practice even he must know he is wide of the mark. Sadly, it is money, not ethics that drives most business, and sometimes a push is needed.

These cheap shots at DFID come from marksmen who have not bothered to think their arguments through. When taken together, investments in democracy and pro-poor business, offer the chance for sustainable improvements in welfare that some of the more traditional approaches have struggled to achieve.

Improvements for workers in foreign countries will only come via one of four routes: consumer activism, union action, legislation or external support.

As demand for throw-away fashion continues unabated, the medium term prospect of the first route, consumer activism, ending poor working conditions is limited. It takes a horrific accident, like the collapse of the Rana Plaza factory last year which killed over a thousand workers, for the public to wake up to the reality of where their goods come from. The ensuing public outrage did result in new commitments from Primark and the other high street shops that used the factory and over a million pounds worth of compensation payouts. However, as last night’s ITV expose shows, things in Bangladesh are very far from fixed and we in Britain are still merrily shopping. An approach that lasts longer than the average news cycle is sorely needed.

The union route is more promising. Indeed in October, Reuters reported that Bangladesh’s garment factory owners were pencilling in a minimum wage increase of 50 to 80 percent (and planned to ask retailers to defray the cost) in a bid to end strikes. Alison McGovern, Shadow Minister for International Development, discussed the importance of supporting unions as part of the British government’s international development work at January event at the TUC, and one would expect to see more work like this under a Labour-run DFID.

The third route, legislation, will help the raise the bar locally, so that at least within countries, factories cannot compete on the basis of taking short cuts with health and safety. Of course, it is not for DFID to make laws abroad. We could make laws in the UK to require British business to meet minimum standards in their supply chains – everyone recognises it is wrong that goods produced in death trap factories should be in our high streets – but these would be very difficult to enforce. Britain’s potential as a global human rights monitor would be stretched to its limit.

In-country work to educate workers about their rights (including their right to unionise) so that they can monitor the compliance of their own workplace is a more sustainable approach. Educated (unionised!) eyes will reach places the UK law and even UK companies are ill-equipped to find. Ultimately a better educated and organised workforce can make their own demands of their governments as well as their employers. Presumably this is the kind of democracy work the De Bois thinks is a waste of time.

The DFID grants to which Peter Bone objects represent the fourth mechanism for improving working conditions – external support. Each grant is designed to develop a model of best practise which can be replicated in other garment factories and sustained after the project finishes. The projects involve not only unions and charities but also big business hitters, such as Tesco, giving them a credibility and a scale-ability that no well-meaning NGO could match. Each grant is matched financially by the company in question. If this is what it takes to kick start sustainable improvements in garment factories, then it is money well spent.

The Daily Mail is better used to the idea of DFID funding health and education. Luckily, it is not an ‘either or’ choice. DFID has concluded that vibrant economies offer the best prospects for sustained improvements in public welfare. They are right, but with an important caveat.

As in the UK, we cannot take it for granted that the proceeds of wealth will benefit the poorest. That is why promoting democracy along-side decent work and economic development is so important. As developing country economies grow, democratic demands will drive welfare. Dictators will find it ever more difficult to put that cash in Swiss banks, because people in need of food and medicine will be banging at their doors. As DFID puts more of its money into business related projects, those on the left will need to watch it hawkishly to ensure these are truly pro-poor investments balanced with initiatives to promote democracy.

Huff puffing Tory back benchers may be content to assign the important business of development to a bizarre mix of dictators and benevolent high street shops, but those on the left aspire for better. For now at least, DFID is quietly and sensibly getting on with the job.

by Veronica Oakeshott, LCID Media Officer

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