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Tories plot to divert aid away from world’s poorest

26 September 2016

lChlPlPlBy Sam Rusthworth, LCID’s Membership & CLP Relations Officer – @SamJRushworth

 

There were gasps and raised eyebrows when Theresa May appointed Priti Patel as Minister for International Development in her new right-wing cabinet, but Patel’s first appearance before MPs last week suggests anyone concerned about global poverty is right to be worried.

In July, while commentators in the Westminster-Village were busy discussing how clever May had been to give senior cabinet jobs to hard-Brexiteers – including a bumbling foreign secretary with a track record for racial slurs and insulting world leaders, who she’d be able to sack by Christmas – at the Department for International Development a silent coup was underway. A new minister took charge who not long before had called for the whole department to be abolished. Shortly after, Ms Patel appointed Robert Oxley as her special advisor, whose previous roles include head of media at Vote Leave and campaign director for the TaxPayers’ Alliance while it was calling for government spending on aid to be cut.

So it came as no surprise when, in her comments to the parliamentary International Development Committee last week, as well as in an article she penned for the Daily Mail, itself a fervent campaigner against what it calls “the madness of aid”, Ms Patel repeated many of the well-worn cliches about aid money being wasted or stolen. The poorest should “work and trade their way out of poverty” not be “passive recipients of our support”, she declared, echoing popular misconceptions with a Nigel Faragian flare.

For most people, who do not spend their working lives unpicking the debates around aid and development, such arguments make sense, and believing them does not mean they do not care about global poverty. Images of famine, disease and suffering have been broadcast onto our TV screens for decades and things never seem to get any better. It is known that some African leaders who have presided over their countries for decades are worth millions of dollars while their people survive on less than $2 a day. Added to this are high profile examples of aid failures, such as £285 million Cameron’s government spent building an airport on St Helena which is unusable due to wind speeds. So it is easy for Priti Patel to conjure an image of a bloated UK Department for International Development dolling out money left, right and centre to corrupt regimes that steal or squander it – and understandable that so many believe it. Hopefully Ms Patel’s new staff at DfID will help her to see how inaccurate this image really is.

The truth about the UK’s international development spending is that, while imperfect, it has made substantial improvements in the lives of millions of people and helped many countries on the path to sustainable development. What’s more, many of the criticisms of aid are past their sell by date. Since Labour set up the Department for International Development in 1997, the UK has developed expertise in delivering aid effectiveness and become the world leader in global development. Contrary to popular myth, UK Aid money is not carelessly doled out but intelligently targeted and fully accounted for.

Just over forty percent of UK Aid money is entrusted to multilateral organisations such as the International Development Association, a financial institution administered by the World Bank, whose work has funded the immunization of over 300 million children, built over 100,000 km of paved roads and made micro-finance loans to over 120,000 small and medium enterprises. Other organizations trusted to spend UK aid on our behalf include The Global Fund to fight AIDS, Tuberculosis and Malaria; the World Food Program; and the United Nations Children’s Fund. Each of these organizations is transparent, accountable, and widely respected for making a real impact.

The remaining sixty percent of UK aid is given to fund specific projects and programs under bilateral arrangements with national governments or respected not-for-profit organisations and used to fund health, humanitarian aid, education, infrastructure, and water supply. Such bilateral aid also includes millions of pounds currently being spent on basic humanitarian assistance, food, shelter, relief packages, health care and emergency education to Syrian refugees in Turkey, Lebanon, and Jordan, as well humanitarian assistance and funding Red Cross activity in Syria. In 2014 £238 million was spent in Sierra Leone providing humanitarian relief to those affected by the Ebola crisis, including treatment and measures to prevent infections from spreading.

Again – and I stress this point – such aid money is not wistfully handed out to corrupt chiefs and princes. All over the world, expert DfID staff sit in foreign government ministries to advise and oversee development spending, while foreign governments are expected to sign performance contracts, with each tranche of aid being dependent on achieving results. Aid spent through non-government organisations with expertise in particular areas is likewise carefully monitored, independently evaluated and strictly accounted for.

I am not arguing that DfID gets everything right. When you set to work on some of the world’s messiest, most complex and seemingly intractable problems, mistakes are inevitable, but it is better to learn from them and continually improve aid effectiveness than cast aside two decades of experience and learning with a complete overhaul of aid spending for what are, let’s face it, unjustifiable and ideological reasons.

Priti Patel has even admitted that her plans for DfID are ideological, telling Daily Mail readers that her approach “will be built on some core Conservative principles. That the way to end poverty is wealth creation, not aid dependency…. …we need to empower the poorest to work and trade their way out of poverty”. Few could disagree with the rhetoric, but to suggest that miners in Bolivia, Coffee growers in Rwanda, or garment workers in Bangladesh are not already wearing out their lives in long hours hard work is insulting. Likewise, trade is nothing new. It has been fundamental to the West’s relationship with the developing world for centuries, only on terms that are grossly unbeneficial to the latter. It is worrying, given the evidence, that Ms Patel appears to be arguing that  replacing aid with more trade will miraculously end global poverty.

I am not saying that trade is unimportant. Export-led growth is essential for developing countries to acquire foreign exchange. A stronger entrepreneurial class in lower income countries would seek out ways to supply desired goods and services in a way government planners cannot. Foreign Direct Investment can provide jobs and transfer valuable learning. However, for the world’s poorest to take advantage of global trade they first need shelter, health care, sanitation, and education, while entrepreneurs need good infrastructure, security and access to finance. In other words, far from trapping people in “aid dependency”, the UK’s aid spending that Ms Patel is so quick to criticise is vital to empowering the poorest to work and trade their way out of poverty.

Perhaps Ms Patel would respond by questioning why governments of lower income countries are unable to fund infrastructure investment and public services themselves – why they are so ‘dependent’. The answer is partly that they struggle to extract tax because so much economic activity is informal and they lack the resources and expertise to capture it, but more so because so many foreign-owned multi-nationals shift profits to avoid their tax obligations in developing countries. The UN Conference on Trade and Development (UNCTAD) last year published a study which showed that developing countries lose over $100 billion per year in revenues for this reason. The IMF put it at $200 million  – over seventeen times the UK’s total annual international development spend.

It is not yet clear quite what Priti Patel actually means by extolling the benefits of trade as though it is an alternative to aid while at the same time pledging to maintain the UK’s commitment to spend 0.7% of GDP on aid, but reading between the lines it appears she intends to divert funds away from health and education for the world’s poorest and into the hands of businesses charged with ‘increasing trade’, possibly by out-sourcing more low paid, insecure jobs to developing countries.

Indeed – and this is the most iniquitous part of all – Patel has hinted at reversing the principle of Labour’s 2002 International Development Act that aid should target poverty reduction, and instead prioritise aid spending in countries with highest migration flows to the UK, potentially enabling British business to secure cheaper labour, just not on British soil.

This would be the ultimate application of Patel’s “core Conservative principles” to development aid – diverting tax payer’s money into the hands of private business and trusting it ‘trickles down’ to the poorest in the world.

Labour must defend its legacy on International Development and not allow the Tories to take us backwards. The Labour Campaign for International Development is where that fight starts.

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