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
Campaign pictures/Office of Jorge Sharp
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Meet Jorge Sharp, the rising star of Chile’s left who beat right-wingers to running its second city

The 31-year-old human rights lawyer says he is inspired by Jeremy Corbyn’s alternative politics as he takes the fight to the Chilean establishment.

Bearded, with shaggy hair, chinos and a plaid shirt, 31-year-old Jorge Sharp does not look like your typical mayor elect. But that does nothing to stop him speaking with the conviction of one.

“Look, Chile is a country that solely operates centrally, as one unit,” he says. “It is not a federal country – the concentration of state functions is very compact. In reality, most of the power is in Santiago. There are many limitations when it comes to introducing significant changes [in local areas].”

In October, Sharp upset Chile’s political status quo by defeating establishment rivals in the mayoral election of Valparaíso, the second city of South America’s first OECD country. He is taking office today.

Often compared to Podemos in Spain, Sharp’s win was significant – not only as yet another example of voters turning against mainstream politics – because it denied Chilean right-wing candidates another seat during local elections that saw them sweep to power across the country.

As the results rolled in, Conservative politicians had managed to snatch dozens of seats from the country’s centre-left coalition, led by President Michelle Bachelet, a member of Chile’s Socialist Party.

Sitting in one of Valparaíso’s many bohemian cafes, Sharp accepts the comparison with Podemos gracefully but is keen to make sure that Chile’s new “autonomous left” movement is seen as distinct.

“What we are doing in Chile is a process that is difficult to compare with other emerging political movements in the world,” he says. “We are a distinct political group and we are a modern force for the left. We are a left that is distinct in our own country and that is different to the left in Spain, in Bolivia, and in Venezuela.”

Sharp’s Autonomous Left movement is not so much a party rather than a group of affiliated individuals who want to change Chilean politics for good. Considering its relatively small size, the so-called Aut Left experienced degrees of success in October.

Chilean voters may have punished Bachelet – also Chile’s first female leader – and her coalition after a number of corruption scandals, but they did not turn against left-wing politics completely. Where they had options, many Chileans voted for newer, younger and independent left-wing candidates. 

“We only had nine candidates and we won three of the races – in Punta Arenas, Antofagasta and Ñuñoa, a district of Santiago,” he says. “We hope that the experience here will help us to articulate a national message for all of Chile.”


Campaign pictures/Office of Jorge Sharp

For Sharp, the success of Jeremy Corbyn, Donald Trump and the pro-Brexit movement are due to people fed up – on a global scale – with their respective countries’ mainstream political parties or candidates. Given that assumption, how would he describe the cause of his own election success?

“The problem in Chile, and also for the people in Valparaíso, is that the resources go to very few people,” he says. “It was a vote to live better, to live differently. Our project for social policy is one that is more sufficient for all the people. It’s a return to democracy, to break the electoral status quo.”   

Sharp – like many – believes that the United States’ Democrat party missed out by passing up the opportunity to break with the status quo and choose Bernie Sanders over the chosen nominee Hillary Clinton. “They would have been better off with Sanders than Clinton,” he believes. 

“The [people] in the US are living through a deep economic crisis. These were the right conditions for Trump. The people weren’t looking for the candidate from the banks or Wall Street, not the ‘establishment’ candidate. The way forward was Sanders.”

Turning to other 2016 geo-political events, he claims Brexit was a case of Britons “looking for an answer to crises” about identity. Elsewhere in South America, the tactics of former Colombian president Álvaro Uribe – who led the “No” vote campaign against peace with the Farc – were “fundamentally undemocratic”.

In the future, Sharp hopes that he and the rest of the Autonomous Left will be better-prepared to take power in higher offices, in order to further reform social policy and politics in Chile.

“For these elections, we weren't unified enough,” he concedes. “For 2017 [when national elections take place], we will have one list of parliamentary candidates and one presidential candidate.”

And while Sharp clearly sympathises with other left-wing movements in countries throughout the world, this is not a call for a unified approach to take on the rise of the right.

“Every country has its own path,” he finishes. “There is no single correct path. What we need to do [in Chile] is articulate a force that’s outside the political mainstream.”

Oli Griffin is a freelance journalist based in Latin America.