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
FERENC ISZA/AFP/Getty
Show Hide image

This is a refugee crisis, and it has always been a refugee crisis

If your country is in flames and your life is at risk, boarding a rickety, dangerous boat is a rational decision. We need to provide safer choices and better routes.

Even those of us all too familiar with the human cost of the present refugee crisis were stopped in our tracks by the profoundly disturbing images of the dead toddler washed up on a Turkish beach. Whatever our personal view about the ethics of displaying the photographs, one thing is clear: the refugee crisis on our doorstep can no longer be denied or ignored.

For far too long the political conversation in the UK has avoided facing up to the obvious conclusion that the UK must provide protection to more refugees in this country. Ministers have responded to calls to do more by talking about the aid we are providing to help refugees in the region, by blaming other European Governments who are hosting more refugees than we are, and also accusing refugees themselves by claiming the desperate people forced into boarding unsafe boats in the Mediterranean were chancers and adventurers, out for an easier life.

These latest images have blown all that away and revealed the shaming truth. This is a refugee crisis and has always been a refugee crisis. When the Refugee Council wrote to the prime minister in 2013 to call for the UK to lead on resettling Syrian refugees displaced by a war that was already two years old, it was a refugee crisis in the making.

Many people struggle to comprehend why refugees would pay smugglers large sums of money to be piled into a rickety boat in the hope of reaching the shores in Europe. The simple answer is that for these individuals, there is no other choice. If your country is in flames and your life is at risk, boarding that boat is a rational decision. There has been much vitriol aimed at smugglers who are trading in human misery, but European governments could put them out of business if they created alternative, legal routes for refugees to reach our shores.

There are clear steps that European governments, including our own, can take to help prevent people having to risk their lives. We need to offer more resettlement places so that people can be brought directly to countries of safety. We also need to make it easier for refugees to reunite with their relatives already living in safety in the UK. Under current rules, refugees are only allowed to bring their husband or wife and dependant children under the age of 18. Those that do qualify for family reunion often face long delays living apart, with usually the women and children surviving in desperate conditions while they wait for a decision on their application. Sometimes they are refused because they cannot provide the right documentation. If you had bombs raining down on your house, would you think to pick up your marriage certificate?

The time to act is well overdue, but the tide of public opinion seems to be turning – especially since the release of the photographs. We urgently need David Cameron to show political leadership and help us live up to the proud tradition of protecting refugees that he often refers to. That tradition is meaningless if people cannot reach us, if they are dying in the attempt. It is a shame that it had to take such a tragic image to shake people into calling for action, but for many it means that the crisis is no longer out of sight and out of mind.

Maurice Wren is the chief executive of the Refugee Council