Jesus rails against the Pharisees for giving a tenth of their
spices, but neglecting "the more important matters of the law -
justice, mercy, and faithfulness" (Matthew 23.23). Sometimes, I
wonder what he would have said about rich countries such as the UK,
and our politicians who constantly boast about our
"generosity".
We give only 0.6 per cent of our national income to the poor in
the developing world, while benefiting from a global trade system
that ensures that people in those countries will never escape the
poverty trap.
Yet the sad truth is that much of even this paltry sum is being
spent to promote the interests of UK plc, not the poor. Take the
recent controversy over "poverty barons". The Sunday
Telegraph ran a series of stories on aid spending, starting
with the revelation that the Department for International
Development (DfID) spent nearly £500 million last year on private
consultants. Many of these people earn six- or seven-figure
incomes.
The International Development Secretary Justine Greening, who
was new in post, quickly ordered an internal inquiry. While hiring
consultants is sometimes justified when in-house expertise does not
exist at DfID, it is clearly wrong that we are funding British
companies such as Adam Smith International to promote free-market
ideology to cash-strapped African governments. Back in 2001, this
firm was given £250,000 to write a pop song to promote the
privatisation of the water supply in Tanzania.
The real scandal, however, is not so much the extent to which
DfID's work has become outsourced to consultants; it is the
underlying assumption within Government that big business holds all
the answers to the problem of tackling poverty, and that our aid
money should therefore be used to support these corporations rather
than going to the poor more directly.
In Bangladesh, for example, DfID is funding a World Bank project
that promotes new "special economic zones", and which envisages
giving tax-breaks to multinationals. Existing zones in Bangladesh,
which host brands such as Nike, Adidas, and Walmart, enforce strict
restrictions on trade-union activity, and allow companies to pay
workers as little as £1 a day.
Only in August, dozens of people were hospitalised in the
Ishwardi Export Processing Zone in Bangladesh, after police
attacked workers who were protesting about their conditions. This
case shows how the belief that only investment by multinational
companies can help countries beat poverty can lead to a situation
in which British aid money supports the violation of basic labour
rights.
IN 2010, Ms Greening's predecessor, Andrew Mitchell, announced
that a new "Private Sector Department" would be established within
DfID. Speaking at the London School of Economics in October that
year, he promised to "recast DfID as a government department that
understands the private sector".
It turns out that this policy is not just about helping
multinationals: in the name of supporting low-carbon energy, there
is a plan to spend £130 million of public aid-money to prop up
highly profitable private-equity and hedge-fund investments in
energy infrastructure in poor countries in Asia, Africa, and Latin
America.
In the official project documentation of this fund, DfID says
that it wants the fund to "avoid being perceived as being too
developmental in nature because of the risk of otherwise deterring
private-sector investors who are looking for good financial
returns".
So, because DfID wants to attract support from the financial
sector, money that is supposed to be helping the poor is actually
going to facilitate high-profit investments by millionaire
hedge-fund managers in London. What is worse, as the funds will be
controlled by a commercial fund-manager, there will be little or no
transparency about what this money is used for.
NONE of this is to say that support should not be given to
small, community-level businesses. A positive example is the
assistance given to local co-operatives in Malawi by the Scottish
government. But the current obsession with involving big business
in development is not only harmful, but potentially comes at the
expense of proved (often public-sector) solutions in health and
education.
For example, at the same time as cutting funding to the Centre
for Progressive Healthcare Financing, which focused on achieving
universal public health-care, DfID put more than £12 million into a
joint project with a number of other agencies promoting for-profit
public-private partnerships in health.
What we need now is a rethink about what aid is really for. It
should be unacceptable for this money to be used to support the
commercial interests of large companies.
In the UK, we are already the beneficiaries of a deeply unfair
economic system, which gives our companies advantages over local
producers in the developing world. International trade rules force
poorer countries to open their markets, which are then flooded with
cheap imports, leading all too often to the collapse of domestic
agriculture and industry.
While the best aid we can give to the poor is to change this
system, the least we should do is to ensure that our aid budget is
spent to help rectify these injustices rather than to reinforce
them.
Alex Scrivener works as a campaigner at the World
Development Movement (www.wdm.org.uk).