By Mike Phipps
Should international aid be directed where it is most needed or targeted to fit the requirements of UK trade and foreign policy? The government’s decision to abolish the Department for International Development (DfID) shows a clear commitment to the latter.
The decision returns Britain to the bad old days of ‘aid for trade’ when development funds were used to help governments buy British exports, rather than reaching people in genuine need. The most infamous case was the Pergau Dam scandal in the 1990s when UK aid financed the construction of a Malaysian dam in return for the purchase of British arms exports. A celebrated judicial review at the time mounted by the World Development Movement (WDM) found the government had acted unlawfully, and the then Foreign Secretary considered resigning.
The development charity Christian Aid has called the decision to abolish DfID “political vandalism”. The WDM’s successor Global Justice Now(GJN) have launched a petition against the decision. Nearly 200 charities and aid organisations have condemned the move.
In reality, UK international aid policy, even under New Labour, which created DfID, has long been linked to trade interests. Clare Short, writing in The Guardian, recalled how “Tony Blair overruled myself and DfiD and insisted that a highly questionable air traffic control deal for Tanzania should go ahead.” She further concedes that much of the UK’s aid is dispensed through the World Bank, the International Monetary Fund and the World Trade Organisation.
Since the Tories returned to office, the subordination of aid to trade has continued. In 2011, the Secretary of State for International Development Andrew Mitchell tied an aid package to India, worth £1.2bn over five years, to a broader deal that included the sale of fighter jets, saying “It’s an important market.”
In 2017 a GJN report highlighted how The Conflict, Stability and Security Fund channelled aid money to security services in countries such as Bahrain and Burma, notorious abusers of human rights. In 2018, Prime Minister Theresa May talked of “the need to ensure that our aid programme works for the UK”.
A new GJN report in February, highlighted in Labour Hub, explored how UK aid money is wasted on private schools and hospitals. Much of the money is now dispensed through corporate-led bodies like the former Commonwealth Development Bank (CDC).This body invested “$16.6 million in South African port operator Grindrod to facilitate the export of South African coal to China via Mozambique; $144 million in the coal-burning cement producer ARM Cement in 2016; and $39 million to build a power plant in Guinea, powered by heavily polluting heavy fuel oil.”
At the 2019 general election, Labour proposed to transform the CDC, which has received around £2 billion of public money from the aid budget since 2016, into a green development bank. It promised to end investments in fossil-fuel infrastructure, private equity funds and for-profit health and education companies and to align all investments will to the Paris Climate Agreement and the UN Sustainable Development Goals. Additionally, companies receiving investment would be required to provide guarantees of minimum pay, conditions and union recognition for all employees.
As well as the concern about ‘aid for trade’, GJN are also concerned that abolishing DfID will cause a further loss of transparency in the administration of funds. They fear more aid money will be spent across other departments, by unaccountable cross-government funds, and by the UK’s development bank CDC. That could mean more money given to private companies, including those accused of human rights abuses.
Only this month the House of Commons international development select committee reported UK aid not administered by DfID “has a very different geographical profile, with around three quarters going to middle-income countries, including China, India and South Africa, pursuing priorities such as reducing carbon emissions, tackling insecurity, building research partnerships and promoting trade and investment ties with the UK”.
It’s clear from his public comments that Boris Johnson does not understand the first thing about international aid. The abolition of DfID, however, has strong support from right wing groups like the Henry Jackson Society and influential advisors like Dominic Cummings. It fits into the Tory Party’s ‘Global Britain’ agenda, which entrenches British financial institutions as key players in dispensing overseas aid money.
It also subordinates aid policy to foreign policy objectives, which explains why countries in sub-Saharan Africa that suffer extreme poverty are being deprioritised in favour of more prosperous states that border Russia. Johnson freely admitted the true purpose of aid when he told MPs, “We give ten times as much aid to Tanzania as we do to the six countries of the Western Balkans, who are acutely vulnerable to Russian meddling.”
This may be because in Tanzania, over one third of people live below the poverty line, whereas in Ukraine, the figure is under 4%. But this is perhaps to be expected from a man who once wrote of the entire African continent: “The problem is not that we were once in charge, but that we are not in charge any more.”
Tax justice campaigner Richard Murphy condemned DfID’s abolition as “great news for tax havens”. His interactions with DfID convinced him that the department understood “the fact that tax havens were unambiguously harming development, promoted corruption and stripped any profits arising from activities that were created straight out of the countries that the UK was trying to support.” But the Foreign Office, under which DfID’s responsibilities will now be subsumed, “was not of the same mindset.”
On one level, the opposition of three recent prime ministers to DfID’s abolition sounds positive. But Tony Blair’s comments that “We created DFID in 1997 to play a strong, important role in projecting British soft power” underline his real concern. He is less bothered about the impact on the world’s poor than on the decline of British imperial influence.
As Labour’s 2019 general election manifesto, quoted above, hinted, international aid is ripe for transformation into a truly internationalist project, rather than an extension of foreign policy self-interest. Poverty is rooted in inequality and tackling this, as Labour’s 2018 policy document ‘A World For The Many, Not the Few’ underlined, needs to be a priority.
As a Labour Party policy statement, the paper was ground-breaking. “Poverty, income inequality and gender inequality are not natural – they are created,” it proclaimed. “They are symptoms of an unfair system that funnels wealth and power into the hands of a few. Our globalised economy has been designed over several decades to benefit a few at the expense of the many.” It promised to “move away from a narrative of aid and charity and towards one of rights and international social justice” and called for a “redistribution of power within the development industry itself”.
In practice, the document emphasised public services, non-profit entities like co-ops and democratically controlled utilities. International aid should not only be targeted to secure these basic services, it should also help empower mass movements capable of fighting for them.
We are some way from that. But Labour remains committed to keeping an independent DfID and will keep its shadow team in place. Progress beyond that will require a Labour government.