The real "poverty barons" are multinational companies

Foreign aid should be investigated, but in the right way

 

On Monday, the new International Development Secretary Justine Greening launched an investigation into the millions of pounds of UK aid money diverted into the pockets of private sector consultants such as the staunchly pro-market Adam Smith International (ASI), following an investigation by the Sunday Telegraph.

This is certainly welcome news. The World Development Movement has for years argued that money made by highly paid consultants like ASI, forcing privatisation, is a dubious use of public funds at best. As early as 2001, ASI was paid to facilitate a water privatisation project in Tanzania, including earning a handsome £250,000 to promote a pop song.

But the worrying thing is that the use of the aid budget in this way is only the tip of the iceberg.  Increasing consultancy spend is part and parcel of a wider undying faith that DfID has in the private sector to deliver poverty reduction.

In one stark example, UK aid money is currently paying for consultants to advise the Bangladeshi government on the establishment of new special economic zones aimed at attracting private-sector investment. Existing zones give multinational companies tax holidays and subsidised land while placing severe restrictions on trade union activity to an extent where the average wage inside these Bangladeshi "export processing zones" is around £30 a month. Here, the scandal goes well beyond the approximately £14m that we are paying the consultants. The heart of the issue is the fact that we are using aid to support a project that will do everything to benefit multinationals like Adidas, which made 671 million Euros in profit last year, and next to nothing for the supposed beneficiaries.

But the government’s pursuit of development policy that focuses on the private sector doesn’t stop at promoting pro-market solutions through consultants. Increasingly, we are seeing multinational corporations replace aid agencies, governments and NGOs as the implementing partners in aid projects.

For example, DfID’s Girl Hub project aimed at getting policymakers to prioritise the needs of girls is being implemented by the Nike Foundation. At the hunger summit hosted by David Cameron during the Olympics, it was Unilever and Glaxo Smith Kline, not NGOs or governments who were named as the major partners.

The problem with all this is that the core assumption – that private sector solutions will be somehow better and more efficient than public sector oriented ones – is based on ideology, not evidence. Nike’s Girl Hub project was slammed as having “serious deficiencies in governance” by the independent aid watchdog ICIA.

There have been myriad inquiries into aid policy over the past decade, but none have broached the key question that needs to be answered: do pro-market, private sector models of development work better for the poorest people than approaches that focus on using and strengthening the capacity of the public sector? The World Development Movement’s 2007 research on water provision showed precisely the opposite.

Justine Greening should look towards supporting an independent Parliamentary inquiry into this broader and more vital question, and put ideology aside and in the interests of genuine poverty reduction. Until this happens, there will remain doubts about whether the government is serious about an aid programme focused on the poor rather than promoting market ideology alone.

Deborah Doane is director of the World Development Movement

Food aid is collected in a Kenyan refugee camp. Credit: Getty Images
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The problem with grammar schools – and the answer to Labour's troubles

This week's news, from Erdogan the despot, to memories of Disraeli, and coffee and class.

Whom should we be cheering in Turkey? Coups are by their nature ­anti-democratic, whatever the rhetoric of their instigators, but Recep Tayyip Erdogan, the Islamist president, is about as much of a democrat as Vladimir Putin. Once he regained power, he dismissed several thousand judges, putting some under arrest. A large number of journalists were already in prison.

As recently as 1990, nearly half of Turkey’s employed population worked on the land and, even now, the proportion is more than a quarter. Erdogan has ruthlessly exploited the pious, socially conservative instincts of his people, who are rarely more than a generation away from the peasantry (and therefore politically “backward” in the Marxian sense), to win elections and push through economic liberalisation and privatisation. His foreign affairs ministry claims that the aim is to confine the state’s role to health, basic education, social security and defence. That is good enough for most Western governments. Provided he also co-operates in limiting the flow of Middle Eastern migrants into Europe, Erdogan can be as Islamist and authoritarian as he likes.

 

Quick fix for Labour

I have an answer to Labour’s problems. Its MPs should elect their own leader while Jeremy Corbyn continues as party leader. The former, recognised by the Speaker as the leader of the parliamentary opposition, would get the usual state aid for opposition parties. Corbyn would control Labour Party funds and assets.

He and his hardcore supporters should welcome this arrangement. Their aim, they say, is to build a new social movement. Relinquishing the burden of parliamentary leadership would leave them free to get on with this project, whatever it means. Corbyn could go back to what he enjoys most: voting against the Labour front bench. He would no longer have to dress up, bow to the Queen or sing the national anthem. This, I grant you, would not be a satisfactory solution for the long term. But the long term is more or less extinct in British politics. If Labour had peace for a few months, it might be enough. The situation would be resolved either by Corbyn falling under a bus (preferably not one driven by a Labour MP) or the Tory government collapsing in the face of a mass people’s uprising demanding Corbyn’s installation as supreme ruler. Don’t tell me that neither is likely to happen.

 

Divide and rule

The choice of Birmingham as the location to launch Theresa May’s leadership campaign, combined with proposals such as worker representation on company boards, has drawn comparisons between the new Prime Minister and Joseph Chamberlain.

Chamberlain, who as mayor of Birmingham in the mid-1870s tore down slums, brought gas and water supplies under public control and opened libraries, swimming pools and schools, was a screw manufacturer. There was an Edwardian joke – or, if there wasn’t, there ought to have been – that he screwed both major parties. He became a Liberal cabinet minister who split the party over Irish home rule, putting it out of power for most of the next 20 years. He and his followers then allied themselves with the Tories, known at the time as the Unionists. He duly split the Unionists over tariff reform, excluding them from office for a decade after the Liberals won the 1906 election.

Chamberlain was a populist who brilliantly combined patriotic imperialism with domestic radicalism, proposing smallholdings of “three acres and a cow” for every worker. One can see the appeal to some Brexiteers but he was also divisive and volatile, making him an odd role model for a supposedly unifying leader.

 

Mind your grammar

Justine Greening, the new Education Secretary, is the first to be wholly educated at a mainstream state secondary comprehensive. Pro-comprehensive groups were almost lyrical in praise of her appointment. Yet, unlike her predecessor-but-one, Michael Gove, she declines to rule out the ­return of grammar schools.

To understand how iniquitous grammar schools were, you need to have attended one, as I did. Primary-school friendships were ruptured, usually along lines of social class. The grammars were rigidly stratified. I was in the A stream and do not recall any classmates from semi-skilled or unskilled working-class homes. They were in the C stream and left school as early as possible with a few O-levels. No minister who wants a “one-nation Britain” should contemplate bringing back grammar schools.

 

Living history

Simon Heffer’s recent account in the NS of how his father fought in the Battle of the Somme led one letter writer to ask if anyone alive today could have a grandparent born in the 18th century. Another NS reader replied with an example: John Tyler, a US president of the 1840s, born in Virginia in 1790, had two grandsons who are still alive. Here is another possibility. “As Disraeli said to my husband . . .” If you hear a 94-year-old say that, don’t dismiss her as demented. Disraeli died in 1881. A 71-year-old who married a 24-year-old in 1946 (not impossible; the actors Cary Grant and Anthony Quinn both married women 47 years younger) could have spoken to Disraeli as a boy.

The past is not as far away as we think, though many politicians and journalists behave as though anything before 1980 happened on another planet.

 

Milk money

The class system is alive and well in parts of England. On a family weekend walk, we came across a small village with two adjacent pubs – one clearly for the toffs, the other more plebeian. This was most evident when ordering coffee. The downmarket pub told us that it served only UHT milk with its hot drinks. The other was ostentatiously horrified at the suggestion that it might serve any such thing. 

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt