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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Emmanuel Macron's "moralisation of politics" comes at a heavy price for his allies

"Fake" jobs in French politics, season 3 episode 1.

Something is rotten in the state of France. No political party – at least none that existed before 2016 – seems immune to the spread of investigations into “fake” or shady parliamentary jobs. The accusations sank centre-right candidate François Fillon’s presidential campaign, and led to Marine Le Pen losing her parliamentary immunity in the European parliament (and proxy wars within her party, the National Front). Both deny the allegations. Now the investigations have made their way to the French government, led by Edouard Philippe, Emmanuel Macron’s Prime Minister.

On Wednesday morning, justice minister François Bayrou and secretary of state for European affairs Marielle de Sarnez announced their resignation from Philippe’s cabinet. They followed defence minister Sylvie Goulard’s resignation the previous day. The three politicians belonged not to Macron's party, En Marche!, but the centrist MoDem party. Bayrou, the leader, had thrown his weight behind Macron after dropping his own presidential bid in April.

The disappearance of three ministers leaves Emmanuel Macron’s cross-party government, which includes politicians from centre left and centre right parties, without a centrist helm. (Bayrou, who has run several times for the French presidency and lost, is the original “neither left nor right” politician – just with a less disruptive attitude, and a lot less luck). “I have decided not to be part of the next government,” he told the AFP.

Rumours had been spreading for weeks. Bayrou, who was last part of a French government as education minister from 1993 to 1997, had been under pressure since 9 June, when he was included in a preliminary investigation into “embezzlement”. The case revolves around whether the parliamentary assistants of MoDem's MEPs, paid for by the European Parliament, were actually working full or part-time for the party. The other two MoDem ministers who resigned, along with Bayrou, also have assistants under investigation.

Bayrou has denied the allegations. He has declared that there “never was” any case of “fake” jobs within his party and that it would be “easy to prove”. All the same, by the time he resigned, his position as justice minister has become untenable, not least because he was tasked by Macron with developing key legislation on the “moralisation of politics”, one of the new President’s campaign pledges. On 1 June, Bayrou unveiled the new law, which plans a 10-year ban from public life for any politician convicted of a crime or offence regarding honesty and transparency in their work.

Bayrou described his decision to resign as a sacrifice. “My name was never pronounced, but I was the target to hit to attack the government’s credibility,” he said, declaring he would rather “protect this law” by stepping down. The other two ministers also refuted the allegations, and gave similar reasons for resigning. 

Macron’s movement-turned-unstoppable-machine, En Marche!, remains untainted from accusations of the sort. Their 350 new MPs are younger, more diverse than is usual in France – but they are newcomers in politics. Which is exactly why Macron had sought an alliance with experienced Bayrou in the first place.

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