Foreign Aid Realities: Invented Morality
As reported on 1st May, the political head of the UK foreign aid programme – from 1997 wishfully named the Department for International Development – announced that £19 million of cash grants to South Africa under the programme will shortly end.
This has evoked the predictable chorus of synthetic outrage from the recipient country (“damaging our long-term relationship”, etc.) from the aid agencies (e.g. Oxfam: “there remains widespread poverty and inequality” (in South Africa) etc.) and from a Labour opposition spokesman: “a serious breach of trust with one of our most important strategic partners”, i.e. in a complete inversion of morality, the giver is being castigated.
Actually the amount involved (£19 million) is a pretty small part of the 2013/14 DfID aid budget (£8.8 billion) but coming on top of the decision to phase out £280 million of annual aid to India, the aid agencies are worried that the UK government will change its mind and allow the DfID to contribute to the new round of Departmental cuts being imposed on Defence, Local Government, Border Controls and the Police, Transport and Industry.
In our post of 8th March 2011, “The Realities of British Overseas Aid”, Stephen Bush briefly examined what DfID actually spends its £8.8 billion (£7.5 billion then) on. Most expenditure as listed over £25,000 turns out to have been grants to other agencies: UN, EU, banks (!), management consultancies (of course), University Departments of International Development, and other talking shops including DfID’s own Institute of International Development – wholly paid for by itself.
There are now at least 23 Departments of International Development in British universities, mostly set up since 1997 as ID morphed into an academic field in which practical subjects like engineering, agriculture, medicine, which most people would think were necessary for the development of poor countries, are conspicuous by their absence. Instead students at Sheffield are offered studies in “Living with HIV/AIDs”, “Climate Change”, “Gender Relations”, things which they can only observe and not actually do anything about. At York students are offered a “thorough grounding in the history of, debates about and critiques of, the field” (of ID). Job prospects are offered in “NGOs, research institutes, labour unions” whose output will be more history, more debates, more critiques – all talking shops to keep the student-academic-student cycle going.
This sort of thing is what David Cameron’s unbreakable, invented, moral commitment to the world’s poorest people is actually paying for[1].
The ring-fenced DfID budget for 2013/14 is £8.8 billion, almost 7% of the UK income taxes, or 10% of the whole of national insurance contributions, or 10% of the yield from Value Added Tax[2].
My guess is that £2-3 billion per annum is about the maximum which can be effectively spent on the things which really matter to poor countries – roads, housing, agriculture, electricity production, telecoms, water supply, food packaging plants, school buildings[3]. Perhaps half a billion could be effectively spent by the military on disaster relief projects. The other £5-6 billion of the DfID budget should be returned to the Treasury for UK budget relief.
[1] Cameron claims that he has to keep to his manifesto commitment. Nobody noticed this one at the time. If he asked the British people if they wanted him to continue to spend their taxes in this way, they would say a resounding “No”.
[2] British-South African trade is worth about £6.5 billion per year, roughly in balance. This doesn’t cost the taxpayer a penny and is surely a more effective aid to South African Development than disbursing cash to aid agencies.
[3] Quite a bit of this matters to people in every country actually.
May 2nd, 2013 at 12:47 pm
As I have said before: if the right conditions are not in place in the recipient country – chiefly the rule of law, involving the absence of corruption on the part of public officials and a proper enforcement regime for private contracts, meaning investors can be sure of getting what they pay for – aid will not work. If they are in place aid will not be necessary. As you point out, the trade with South Africa does far more than any academic talk shop could possibly manage. It would be interesting to know how many countries DfID thinks have been lifted out of poverty by aid rather than trade; my own reckoning has the number at nil, though I stand to be corrected. Conversely all the countries subject to the “resource curse” – Nigeria and Equatorial Guinea being two egregious examples – prove that what Africa is missing is not money but the rule of law. The oil resources in both countries have amounted to a fire hose pumping money out of the ground and yet the majority of the population in both countries lives in hopeless squalor whilst the money has been stolen by corrupt leaders and public officials.
I do not object to UK armed forces providing disaster relief but that requires that the armed forces are properly funded. Another £8.8 billion a year – or even part of that sum – should do it (provided the money gets spent on boots on the ground, and practical means of getting them anywhere, such as helicopters and vessels such as HMS Ocean). In any event, wealth creation is a far better means of disaster relief, as the contrasting fortunes of Japan and New Zealand on the one hand and the Asian Tsunami countries on the other demonstrate. Buildings were far stronger so fewer people died initially, while rescue services were better trained and resourced, meaning more people were saved and emergency housing was provided in hygienic conditions.
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