Warped priorities

Published in The Daily Mail (September 27th, 2012)

At home, the talk is all about austerity. One half of the Coalition government holds its annual conference amid talk of cutting benefits, curbing pensions and hitting the middle classes with higher taxes.

The message is clear: times are tough and Britain faces years of pain after the most devastating economic downturn for decades. Little wonder voters remain fearful over the future, worried about jobs and reluctant to spend the money so desperately needed to kick-start the economy.

Meanwhile, the Prime Minister is in New York, telling world leaders attending the United Nations General Assembly about his Government’s determination to spend an ever-growing slice of taxpayers’ money on international aid.

The contrast could not be starker. While libraries close and hospital waiting lists grow, the only Whitehall budget still ballooning as in the spendthrift days of New Labour is the Department For International Development (DFID).

The Coalition is wrestling with slashing public spending as it seeks to reduce the deficit and clear up the mess in public finances. It is straining to bring in an £18 billion reduction to the welfare budget, yet already there is talk of a further £10 billion of cuts around the corner.

A study last week by the independent think-tank the Institute Of Public Policy Research calculated the Government will have to cut make a £3.7 billion cut at the Department For Education — equivalent to more than 80,000 teaching posts.

Perhaps most controversial are the defence cuts, with 17 units being axed from the Army as it reduces its strength by 20,000, provoking claims Britain may struggle to protect our national interests in the future.

Yet incredibly, Dfid’s budget will have risen 50 per cent over the duration of this Government, rising from £7.8 billion in 2010 to £11.5 billion by 2015. Already hard-pressed British households are each handing over more than £300 a year for this purpose — significantly more than their counterparts in any other leading economy. But the Coalition says this is not enough.

David Cameron — accompanied by his reluctant new International Development Secretary, Justine Greening — insists Britain cannot break its promises to the poorest people on the planet and has a moral obligation to help them.

He says this is in our self-interest, claiming the problems of conflict and mass migration will visit these shores if we do not pour money into fragile states abroad. 

If only this were true. Leave aside the uncomfortable facts that 40 per cent of Africa’s military spending is funded inadvertently by aid and that experts have shown migration is more likely from middle-income countries (whose citizens can afford to travel across the world) than from the poorest.

The harsh reality is these vast sums pouring out of Dfid can actually make matters worse for the world’s poorest people. That is why I have so often heard anger and dismay over Western aid policies in countries such as Ethiopia, Haiti, Pakistan and Somalia.

It is not just resentment at seeing self-righteous aid workers driving around in fleets of expensive four-wheel-drive cars — although imagine how we British would feel if armies of young Asians and Africans came over here to tell us how to run our schools and hospitals.

It is that there is something almost colonial in this concept of self-appointed Western saviours of the world, in these failed policies cheer-led by tax-avoiding multi-millionaire rock stars and pursued by politicians desperate to prove they have a heart.

As has been often said, you cannot buy democracy with other people’s money — and nowhere is this truer than in the wasteful world of international development.

Of course, for all the sanctimonious talk of helping the global poor, much of the money taken from taxpayers in Britain fails to reach its intended targets. Nearly one in every six pounds goes straight to the EU, for example, which spends it on projects such as improving Turkish sewers or on buying ties in Tunisia emblazoned with the EU logo.

One analysis of EU aid spending found not only that it was woefully inefficient but that nearly three times as much money per head goes to Europeans than to sub-Saharan Africans. Needless to say, you never hear ministers mention this when they defend British aid. 

Then there is the rising proportion going into the pockets of Western consultants on six-figure salaries and paying themselves seven-figure bonuses. Recent stories have given glimpses of the sleazy circus of self-interested groups swirling around Dfid and exploiting the aid boom.

Meanwhile, as Dfid desperately shovels out cash from its swollen coffers, it hands over huge sums to some of the world’s most repressive regimes. 

Perhaps most shocking is the case of Rwanda, currently facing UN condemnation and accusations of possible war crimes after it was caught meddling once again in its ravaged neighbour, the Democratic Republic of Congo.

Britain remains the biggest bilateral donor to President Paul Kagame’s brutal government. Even after Scotland Yard disclosed the existence of a Rwandan hit squad sent to murder dissidents living in this country as British citizens, Dfid continued to give £75 million a year.

It is absurd that our Government attacks welfare dependency at home yet encourages it abroad. When developing nations hold out their hands and are given huge cheques from foreign donors, they quickly lose any incentive to deliver democracy or decent public services to their citizens.

This is why one study discovered that nearly two-thirds of health assistance to Africa was diverted to other purposes. And why others found that not only does aid fuel corruption — which is worsening in some of the countries receiving the biggest dollops of British aid — but that the biggest beneficiaries are the rich and middle-classes rather the poor.

As the development economist Peter Bauer put it so brilliantly, aid is ‘an excellent method for transferring money from poor people in rich countries to rich people in poor countries’.

Many of these problems arise out of the obsession of successive British governments to achieve the sacred aid target of donating 0.7 per cent of national income — and by prioritising amounts spent over proof of any results achieved. Yet even two-thirds of aid workers think their projects fail.

The 0.7 per cent target was calculated more than four decades ago using theoretical data from the Forties. When the same figures were applied to the modern world, they came up with an aid goal of just 0.01 per cent of wealthy nations’ gross domestic product.

As Mr Cameron has rightly observed, targets have a tendency to distort outcomes.

It is hardly surprising a growing majority opposes increasing aid spending to meet this outdated pledge. Yet all three main parties — terrified of incurring the wrath of the aid lobby — have signed up to this policy, creating one more reason for growing dislocation between the public and politicians.

There is, however, rising fury on Tory backbenches. One MP to whom ministers should listen to is Rory Stewart, who detailed his extensive experiences in Afghanistan to a House Of Lords investigation, which demanded the target be dropped earlier this year.

He spoke of the absurdity of spending many times the country’s annual revenues on judicial institutions ignored by the vast majority of Afghans; of consultants costing £1 million a year hosting anti-corruption seminars for dozens of the nation’s most venal men; and of aid projects increasing instability by inflaming jealousies between villages. ‘There is a surreal gap between the rhetoric of the international community and the reality,’ Stewart concluded.

The concept of overseas aid to alleviate world poverty began life as a stunt when inserted into Harry Truman’s inaugural presidential speech. It remains a stunt today for a generation of politicians inspired by Live Aid, especially those running the Tory Party, who believe it is crucial to make them appear modern and compassionate.

The irony is that in today’s world, with African and Asian economies roaring ahead and a growing middle-class who resent the perception their nations are impoverished basket cases in need of foreign salvation, it only makes them look outdated and hooked on the failed policies of the past.

Categorised in: Aid & development, home page, Politics