Beware Development Aid - For Whose Agenda?

Development used to be a battle against deprivation and dependence. Nowadays it’s more about supporting the liberalisation of markets.

The Conservative party’s conversion to development in 2009, most evident in its support of higher aid spending, was seen by many campaigners as one of the development sector’s greatest successes. After years of being seen as a concern of Christians and the left, development had gone mainstream. Apart from a few Little Englanders on the far right, there was a broad consensus that we should fight global poverty.

But a closer look at One World Conservatism – “capitalism and development was Britain’s gift to the world. Today we have an opportunity to renew that gift by helping poor countries kick-start growth and development” – suggests that this victory was not all it seemed. For in equating it with the global expansion of capitalism under the British empire, the term development has clearly come to mean something quite different – indeed pretty much the opposite – to that which anti-poverty campaigners had worked for over several decades.

Back in the heyday of “development”, from the 1950s-1970s, the term had been closely associated with national liberation governments like those of Kwame Nkrumah in Ghana and Julius Nyerere in Tanzania, which fought poverty, deprivation and dependence by using strong state intervention and provision.

Ugandan activist Yash Tandon went further, saying that development for him meant “people’s struggle for liberation from prevailing structures of domination and control over national policies and resources”. In other words, development was seen as a process of breaking with colonial exploitation and transferring power over resources from the first to the third world. For these activists, development represented a revolutionary struggle over the world resources.

The gutting of development of its political content wasn’t something that happened overnight. In the 1990s, after years of right-wing governments in the UK and US expressing the idea that poverty was an individual responsibility, and aid budgets slashed to historically low levels, some in the development sector actively embraced a new way of talking about what they were doing. The UN invented a new category of extreme poverty, denoting those who really deserved our attention, which separated the idea of poverty from inequality.

Campaign organisations pushed a technical “non-political” set of development policies addressing poverty at the micro level, by digging wells and supplying fertiliser, for example. These policies promised to lift the very poor out of their poverty so that they too could share in the wealth of the global economy.

From here, development quickly became a very different proposition. Because if the assumption is that more of the global economy will solve poverty, then developing countries needed to better embed neo-liberal policies. Aid was important because it meant using public money to facilitate the building the sort of liberalised market necessary for democracy and prosperity to flourish. Development became a chance for the political right to extend economic neo-liberalism into those parts of the world which other forms of intervention couldn’t reach.

Today we have arrived at the stage where development involves the UK spending aid money on private investments in gated communities in El Salvador, upmarket flats and a business hotel in Kenya, luxury beachfront homes in Mauritius. Or the World Bank funding five-star hotels in Ghana in conjunction with one of the world’s richest men. Even the mainstream of aid budgets today are used to foster better investment environments in Africa for the likes of Diageo, Coca-cola and SAB Miller, or private education in Pakistan.

Development, and fighting poverty, have been separated from any conception of politics or power; a fundamental misunderstanding of what poverty is. Poverty isn’t simply the difference between living on $1.20 and $1.40 a day. It’s about lacking power over those resources that you need to live a decent life – food, water, shelter, access to healthcare, education. If one person – or corporation – controls them, that means others don’t.

Today, in the wake of the financial crash, as those most responsible for the economic meltdown walked away, it seems clear that neoliberalism and globalisation has made a tiny proportion of people much better off, while the livelihoods of many others – not to mention the environment – has been eroded. Ironically, one of the areas of society most immune to this erosion is development, where neoliberalism still holds sway and has actually grown stronger.

This is why last week World Development Movement became Global Justice Now. We have taken this radical step to show how far the pendulum has swung. We have always maintained that poverty is deeply political. Despite what we’ve been repeatedly told by the political elite, you cannot get rid of poverty while a tiny minority enjoys wealth beyond imagination. In particular, the power that big business wields today is incompatible with a democratic society capable of solving the world’s problems.

Of course it’s true that sometimes people need immediate help – they can’t wait for a radical transformation. But unless we build that transformation into all of our work, the aid industry will not wither away but grow bigger and bigger. The work of democratic states will become the preserve of NGOs working with private companies. It’s time to take a stand against this ever rightward drift.


from here

The business of charity

A British charity which builds wells in Africa was refused overseas aid funding because its bid was not “innovative” - but the consultants who decide which charities should be helped were paid a million pounds.

 It is a small British charity with a simple goal – to supply clean water to villagers in some of Africa’s poorest countries.Just £3,000 can build a well  serving 4,000 people. A further £170 provides a latrine. Such straightforward schemes can save and transform lives. Operation WellFound has so far built more than 25 wells in four countries. WellFound has worked in Kenya, Senegal and Guinea Bissau, building sealed wells with hand pumps in areas where families previously sent their children many miles to fetch fresh water, or risked contracting dysentery, typhoid and cholera from contaminated shallow wells. WellFound requested £250,000 to build wells and latrines for 60,000 people in Burkina Faso, one of the most impoverished nations on Earth. The bid for funding was referred by the Department for International Development (DfID) to Triple Line Consulting, a London-based company which advises on overseas aid, to be examined in detail. The application was rejected. In an email sent by Triple Line to WellFound, the consultancy gave three reasons why the charity should not receive funding. The bid was considered not “sufficiently innovative”; it did not clearly explain how poverty would be alleviated; and it did not provide evidence of how the work could be replicated on a larger scale in the future.

 £29 million was paid in the past 12 months to Triple Line, whose main contract is to assess applications for grants from DfID’s Global Poverty Action Fund. The company passed on £27.1 million of the funding to aid providers it had vetted, while keeping the remaining £1.9 million as a fee for its services. Charities which are approved by Triple Line do not qualify for funding straight away. Instead, they are subjected to a second round of scrutiny by a different consultancy – this time a specialist branch of the global accounting firm KPMG. In the same 12 months, DfID paid KPMG more than £35 million. According to KPMG sources, most was passed on to aid providers and £3.5 million was kept as a fee.  

 Triple Line, based in Putney, south-west London, is owned by two directors who founded the company in 1999: Lydia Richardson, 42, a “socio-economist”, who lives with her husband in a £1 million house in Southfields, south-west London, and David Smith, 54, an economist, who lives with his family in a £750,000 house a few streets away. Triple Line – which states on its website “We operate on the principles of openness, transparency, accountability and trust” – is registered as a small company, meaning it is not required to publish its accounts. Last night its owners declined to disclose what the company’s income or profits were last year, or how much they were paid in salary or dividends.

A DfID spokesman said: “Operation WellFound was one of 238 applicants for a grant under the Global Poverty Action Fund. The top 20 will be awarded a grant. The nature of a competitive process means there will necessarily be a number of organisations that will just miss out.”

Aid to Poverty

The German magazine Der Spiegel has a report upon development aid in Africa and its problems which is well worth quoting extracts from .

"...The main reason that there is starvation in Africa is that there are no profits to be made in cultivating or trading foodstuffs. Either developmental aid ruins the profits or corrupt leaders rob their people blind..."

"..UN's employees are paid to fight hunger, and that's why they usually write reports in which they dramatically portray the situation in Africa and which they usually end with appeals demanding more donated food... And what happens when the help comes? First the merchants complain because the cost of food drops through the floor. Nor is it worth it, under the status quo, to build up any surplus stocks. Then, the farmers complain because their crops become worthless..."

"...Where there is hunger, it results from unethical leaders who steal from their people and let them either starve or rush them into wars...Kenya currently has 94 ministers and assistant ministers, each of whom earns more than $20,000 (€12,940) a month on top of having their own state-funded compound...."

In a previous Der Spiegel interview Kenyan economics expert and capitalist apologist James Shikwati said that aid to Africa does more harm than good.

Shikwati: ...Despite the billions that have poured in to Africa, the continent remains poor.
SPIEGEL: Do you have an explanation for this paradox?
Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere...

Shikwati: ... and at some point, this corn ends up in the harbor of Mombasa. A portion of the corn often goes directly into the hands of unsrupulous politicians who then pass it on to their own tribe to boost their next election campaign. Another portion of the shipment ends up on the black market where the corn is dumped at extremely low prices. Local farmers may as well put down their hoes right away; no one can compete with the UN's World Food Program. And because the farmers go under in the face of this pressure, Kenya would have no reserves to draw on if there actually were a famine next year. It's a simple but fatal cycle...

SPIEGEL: In the West, there are many compassionate citizens wanting to help Africa. Each year, they donate money and pack their old clothes into collection bags ...
Shikwati: ... and they flood our markets with that stuff...Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide..."

As Socialist Banner has always claimed , the craziness of the capitalist market economy creates the contradictions that provides for the existence of poverty alongside plenty .Patching the system up with humanitarian aid fails to deliver the real solution . Only socialism can end African's poverty .