Cut Foreign Aid — And Make Poverty History
Britain’s insistence on giving money we cannot afford to Africans who do not want it puts sentimentality before common sense
In an open letter to the newly formed Coalition government in August 2010, Andrew Mwenda, editor of the Independent newspaper in Uganda, urged Andrew Mitchell, then Secretary of State for International Development, to halt Britain’s “half-century-long experiment with ‘development aid’, which has, since its inception, stunted growth and subsidised bad governance in Africa.” Mwenda concluded: “The British have a unique opportunity to cut the deficit and help Africa. Please, ask your government to stop your aid.”
Far from listening to Mwenda and his co-signatories, the Coalition has clung to its commitment to raise the budget for development aid, largely disbursed by the Department for International Development (DfID), to 0.7 per cent of GDP, some £11 billion by the end of the present parliament. This policy — reaffirmed by David Cameron at the United Nations in September — is Britain’s contribution to “official development aid” (ODA), as distinct from emergency relief or the approximately £1.1 billion donated voluntarily to UK charities for overseas work. If the policy is not popular with African intellectuals such as Mwenda, it certainly reflects the establishment view in the West. While Live Aid in the 1980s raised money for famine relief in Ethiopia, the purpose of the Live 8 concerts organised around the world in 2008 to coincide with the meeting of the G8 nations in Edinburgh was to stimulate public demand for an increase in ODA in general — an ambition heralded by the hard-hitting if vacuous slogan “Make Poverty History”.
Predictably enough, this abundance of public money has given rise to something of a feeding-frenzy among the specialist consultancies, NGOs and commercial contractors operating in the “humanitarian sector”. “There’s lots of money!” Graham Hand, a former British ambassador to Bosnia and Algeria, announced to a “networking reception” for such organisations in London in September. “We’ve all got money! They’ve signed treaties so they have to give out the money!” Or as UK Trade and Investment, Whitehall’s export promotion department, puts it, “Aid-funded business is about win-win: British companies win the business, the aid agency funds a sound project and the developing country gains a sustainable asset.”
This new wave of public funding has created opportunities for senior civil servants to move into positions in privately-owned — though publicly-funded — consultancies and NGOs, where salaries and perks far exceed the civil service payscale. According to recent investigations by the Daily Express and Sunday Telegraph, some development professionals have been making hundreds of thousands of pounds a year in this way, in one case more than £1.2 million.
These revelations are an embarrassment to DfID and the aid industry more widely, but it would be wrong to draw the conclusion that the prospect of private gain on its own explains the sector’s great popularity-why, for instance, 85 per cent of applicants to the civil service state a preference for working at DfID over any other branch of government. Abundant funds naturally increase opportunities and add to an impression of glamour and prestige. But the critical factor for young recruits, as well as for senior politicians and celebrities endorsing the aid consensus, is surely the quasi-redemptive quality of overseas development. Being paid well to travel the world is not unique to the aid industry; what is peculiarly beguiling is the conviction that by living this lifestyle one is actually making the world a better place.
It is always hard to disentangle the impact of material motives from considerations arising from altruism and compassion, self-image or public relations. Gordon Brown’s knowledge of development politics, for instance, has contributed significantly to his £1.4 million earnings since leaving Downing Street (though his fees and royalties all go to the upkeep of his office and to charity).
Nevertheless, the abundant availability of public money has nourished a seductive moral microclimate in which intellectual certainty is bolstered by the applause of the international political establishment and an impressive array of Western celebrities. The film star Angelina Jolie has described the American economist and development expert Jeffrey Sachs as “one of the smartest people in the world”, while Bono wrote the foreword to Sachs’s bestselling The End of Poverty. More significantly, according to William Easterly’s account, when President George W. Bush wanted a photo-opportunity with Bono, the rock star demanded in exchange a 50 per cent increase in the US aid budget — and Bush agreed.
Perhaps the most striking thing about the nexus of power, money and glamour that has come to represent the public face of international development is not just that it can give rise to such examples of wholly irrational decision-making; but even more that, by its nature, it excludes non-Westerners, both experts and the poor whose interests the aid industry exists to champion.
The Zambian-born economist and writer Dambisa Moyo spoke for many when she remarked that “public discourse on Africa” had become “a public disco”. “Scarcely does one see Africa’s (elected) officials or . . . African policymakers . . . offer an opinion on what should be done, or what might actually work to save the continent from its regression,” Moyo argues. “This very important responsibility has, for all intents and purposes, and to the bewilderment of many an African, been left to musicians who reside outside Africa.”
For Moyo, the “glamour aid” phenomenon forms part of a wider tendency in the West, dating back to colonial times, to regard Africans as helpless children who cannot “improve their own lot in life without foreign guidance and help”. This infantilising tendency manifests itself in a kind of moral megalomania, an attitude the Nigerian-American writer Teju Cole has dubbed “the white saviour industrial complex”, which sees world poverty as “nothing but a problem to be solved by enthusiasm”. In Cole’s view, the world of development aid “exists to satisfy the needs — including, importantly, the sentimental needs — of white people and Oprah [Winfrey].”
This sentimental attitude towards the poor encourages an impatient, simplistic assessment of their political, social and economic situation. It is as if a sense of moral outrage becomes an end in itself, whereas in fact the moral imperative to help those in need ought to be regarded as the starting point in a long and demanding engagement with reality, in which it is often far from easy to bring relief to the poor, for all sorts of technical, economic, cultural, military and political reasons.
These challenges and pitfalls have been well documented, at least since the economist Peter Bauer wrote his seminal studies on the effects of aid in Nigeria in the 1960s; but the extensive, fascinating literature on international aid has so far had a minimal impact on its public image. One important negative consequence of official aid, discussed by the Oxford economist Paul Collier among others, is simply that large injections of funds from the West unavoidably involve foreign exchange transactions that artificially drive up the price of local currencies. High exchange rates inhibit foreign investment and choke off nascent export industries, thereby depriving recipient states of the one tried-and-tested means by which poor countries such as Taiwan or South Korea have become rich over the last 50 years.
Influxes of funds also tend to stimulate inflation and speculative booms in the host economy, forcing the authorities to raise interest rates, and thereby adding to the difficulties of home-grown businesses. Moreover, aid is generally provided in the form of loans, so that the West’s largesse also increases the indebtedness of poor countries. Worse still, by providing an external source of funds, aid creates an incentive for coups and rebellions, since anyone who manages to get his hands on power can expect to enjoy the benefits of this revenue, regardless of the condition of the country at large.
One of the critics’ central arguments is that aid drives a wedge between the political elite and middle-class taxpayers, whose proportionate contribution to government revenue is diminished by the inflow of foreign cash. This means that, rather than being incentivised to encourage the growth of a prosperous and independently-minded citizen body, the ruling clique has every interest in prolonging a degree of misery at home, in the reasonable hope of maintaining the flow of foreign funds. Not only does official aid exacerbate corruption, therefore — it represents a serious form of public corruption in itself.
Indeed one of the least attractive features of the aid consensus in the West is its tendency to understate or deny the culture of venality in recipient states. The Kenyan whistleblower John Githongo, who fled to the UK bringing with him a comprehensive dossier on corruption in President Mwai Kibaki’s regime, has spoken of official Britain’s long-held “quietly racist, patronising view that Kenyan affairs are being managed as well as anyone could expect . . . in other words, that Africans simply don’t have the intelligence or sophistication to manage very well.” When Githongo met two senior DfID officials in London following his resignation from Kibaki’s administration in 2005, far from being welcomed as a champion of transparency and good governance, he was subjected to a “sneering and provocative” interview: “They kept referring to my ‘allegations’, basically saying, ‘You’ve upset our programme.’ I realised afterwards I’d been talking to two very angry men.”
Not all British officials showed such contempt for the truth. Sir Edward Clay, Britain’s High Commissioner to Kenya at the time of Githongo’s resignation, was indignant about DfID’s behaviour, which in his view set the worst possible precedent. “By their negligence, DfID have shown that they don’t wish to see this issue pursued to a kill. And that’s unforgivable . . . The message we’re sending the Kenyan people is that, on the whole, we’ll always line up with those in power.”
One problem faced by the then Secretary of State Hilary Benn and his officials at DfID, and a partial explanation for their moral evasion, was simply that the department is under political pressure to spend its budget each year. “It’s supply side pressure,” in Clay’s words. “Most departments have the Treasury breathing down their necks to spend less. DfID is unique in that it is required to spend more, and farther away from scrutiny than any other department.” As the Africa expert Michela Wrong points out, this places DfID in a difficult — indeed, morally absurd — position, since if even relatively well-governed African countries like Kenya are excluded from the list of recipients on the ground of political corruption, the UK would be in danger of having nobody to give its money to at all.
Another factor weighing on the minds of DfID officials is the rising influence of China, which has increased its trade with Africa 15-fold since 2000, and was described in a leaked US diplomatic cable in 2010 as “a pernicious economic competitor with no morals”. China’s willingness to deal with literally anyone — even Zimbabwe’s Robert Mugabe and Omar al-Bashir of Sudan — is a serious deterrent to anyone seeking to raise standards of governance in Britain’s aid partners. If the British refuse aid to Kenya because of concerns over the abuse of funds, so the argument goes, China is more than willing to take Britain’s place, no questions asked. The essential wisdom of this was demonstrated when Britain’s High Commissioner to Malawi was expelled from the country in 2011 for describing President Bingu wa Mutharika as “ever more autocratic and intolerant of criticism”. By contrast, Mutharika boasted that China had given Malawi aid with no strings attached.
This is a strong argument, but it is ironic that DfID officials have been advancing it. When Tony Blair’s government separated DfID from the Foreign Office in 1997, assigning the new department its own budget, the move was explained as a way of ensuring that Britain’s aid would not be given or withheld for reasons of national interest as determined by the Foreign Office. Yet in the Githongo affair, DfID found itself arguing that British aid must be continued regardless of the moral case against, simply in order to preempt Chinese influence. By contrast, some Foreign Office officials courageously argued that Britain should do the right thing and back the whistleblower, regardless of the short-term impact on Britain’s influence.
Justine Greening, who took over from Andrew Mitchell as Secretary of State for International Development in the September reshuffle, is reported to have been reluctant to take on her new portfolio. If she feels short of allies in Whitehall, perhaps she should pick up the phone and talk to Andrew Mwenda, who encouraged her predecessor to cut Britain’s aid. “As Africans,” Mwenda wrote, “we urge the generous-spirited British to reconsider an aid programme they can ill afford, and which we do not want or need.”