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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A loyalist rebranded: will Ségolène Royal run again to be the French President?

The French press is speculating about Ségolène Royal replacing François Hollande as the Socialist candidate.

“I will lead you to other victories!” Ségolène Royal told the crowds gathered in front of the French Socialist party’s headquarters on 6 May 2007.

Many at the time mocked her for making such an odd statement, just after losing to Nicolas Sarkozy in the presidential election. But nearly ten years on, she might just be the candidate the French left needs to win the upcoming presidential election.

There is growing speculation that the current President François Hollande – who was Royal’s partner for 30 years and the father of her four children – will not be in a position to run again. His approval ratings are so low that a defeat in next May’s election is almost inevitable. His own party is starting to turn against him and he can now only count on a handful of faithful supporters.

Royal is among them. In the past, she probably would have jumped at the opportunity to stand for election again, but she has learned from her mistakes. The 63-year-old has very cleverly rebranded herself as a wise, hard-working leader, while retaining the popular touch and strong-willed character which led to her previous successes.

Royal has an impressive political CV. She became an MP in 1988 and was on several occasions appointed to ministerial positions in the 1990s. In 2004, she was elected President of the Poitou-Charentes region in western France. In 2006, Royal won the Socialist party’s primary by a landslide ahead of the presidential election.

She went on to fight a tough campaign against Sarkozy, with little support from high-ranking members of her party. She ended up losing but was the first woman to ever go through to the second round of a French presidential election.

After that, it all went downhill. She split up with Hollande and lost the election to be party leader in 2008. She was humiliated by only getting 6.95 per cent of the votes in the 2011 Socialist presidential primary. She hit an all-time low when in 2012 she stood as the Socialist party’s official candidate to become MP for La Rochelle on the French west coast and lost to Olivier Falorni, a local candidate and Socialist party “dissident”. Royal then took a step back, away from the Parisian hustle and bustle. She continued to serve as the Poitou-Charentes regional President but kept largely out of the media eye.

Royal was very much the people’s candidate back in 2007. She drew her legitimacy from the primary result, which confirmed her huge popularity in opinion polls. She innovated by holding meetings where she would spend hours listening to people to build a collaborative manifesto: it was what she called participatory democracy. She shocked historical party figures by having La Marseillaise sung at campaign rallies and Tricolores flying; a tradition up until then reserved for right-wing rallies. She thought she would win the presidency because the people wanted her to, and did not take enough notice of those within her own party plotting her defeat.

Since then, Royal has cleverly rebranded herself – unlike Sarkozy, who has so far failed to convince the French he has changed.

When two years ago she was appointed environment minister, one of the highest-ranking cabinet positions, she kept her head down and worked hard to get an important bill on “energy transition” through Parliament. She can also be credited with the recent success of the Paris Climate Agreement.

Above all, she has been impeccably loyal to the President.

Royal has reinforced her political aura, by appearing at Hollande’s side for state occasions, to the extent that French press have even labelled her “the Vice-President”. This has given her a licence to openly contradict the Prime Minister Manuel Valls on various environmental issues, always cleverly placing herself on virtue’s side. In doing so, not only has she gained excellent approval ratings but she has pleased the Green party, a traditional ally for the Socialists that has recently turned its back on Hollande.

The hard work seems to have paid off. Last Sunday, Le Journal du Dimanche’s front-page story was on Royal and the hypothesis that she might stand if Hollande does not. She has dismissed the speculations, saying she found them amusing.

Whatever she is really thinking or planning, she has learned from past errors and knows that the French do not want leaders who appear to be primarily concerned with their own political fate. She warned last Sunday that, “for now, François Hollande is the candidate”. For now.

Philip Kyle is a French and English freelance journalist.