The foreign aid target is highly flawed
Published by The Mail on Sunday (3rd April,2016)
Since the time David Cameron became leader of the Conservatives, I have been one of those pushing him to move his party to the centre ground, making it more compassionate towards the less fortunate in society.
We agree on many things, as you might expect with his former speechwriter, and I admire the Prime Minister as a politician. Yet there is one major point of difference: my abhorrence for his Government’s blinkered, backfiring and bovine obsession with foreign aid.
As a foreign reporter, I have seen the damage and destruction of human rights that is being done through our funding of repressive despots in Africa.
I have heard the anger of people from across the political spectrum over our fuelling of corruption in Asia. And I have seen the mess that simply throwing cash at problems makes in places such as the Caribbean and Central America.
Unfortunately, we are ruled by a generation of politicians who were inspired by Live Aid into the deluded belief that pouring taxpayers’ cash into poor countries makes them look like kind people.
Yet as a barrage of studies and development experts such as Britain’s brilliant Nobel-winning economist Angus Deaton have shown, such policies can end up doing more harm than good. Free handouts from abroad encourage bad or weak rulers to divert cash into arms, vanity projects and their own pockets. We attack welfare dependency at home even as we encourage it abroad.
These arrogant policies smack of neo-colonialism, with Westerners strutting the planet telling foreigners how to run their own affairs. And they present a false impression of many parts of the developing world, especially in Africa, as helpless basket cases in need of our salvation.
At the heart of this flawed approach is the absurd UN aid target. Once the Tories talked of targets distorting outcomes; now they lead all three main parties in endorsing the idea we should be the only major economy handing over 0.7 per cent of our national income to aid projects overseas.
This idiocy has been enshrined in law. As a result, the Department for International Development (Dfid) is the only Government department that must explain to Parliament if it fails to spend enough money.
It is economic insanity to focus on spending over results. The legacy is a Government borrowing to give away £12 billion this year in aid, the same amount it is struggling to find by cutting welfare bills and disability payments at home. And this will rise to a staggering £16 billion by 2020.
No wonder we fund so many spurious projects. And no wonder there was such a rush from Britain’s beleaguered taxpayers to sign this paper’s petition demanding a new parliamentary debate over this political stunt.
Few British politicians bother to question the sacred UN target they worship with such fervour.
Yet it is just a figure devised by campaigners in the 1960s, based on dubious economic data. When experts applied the same calculations to the global economy in 2005, they discovered the aid goal should have fallen to 0.01 per cent of GDP.
The study ‘lays bare the folly of the initial method and the subsequent unreflective commitment to the 0.7 per cent aid goal’, concluded authors Michael Clemens and Todd Moss from the US Center for Global Development think-tank (itself given millions in aid by Britain). ‘It is an arbitrary figure based on a series of outdated assumptions,’ they wrote scathingly, adding it failed to match ‘needs and conditions of recipients and budget priorities of the donors.’
Since then the world has become richer and the number of poor people in the developing world has plummeted thanks to the twin motors of capitalism and consumerism.
But the aid bandwagon rolls on and on, largely to the benefit of self-aggrandising charities and the growing army of private sector fat cats with their six-figure salaries and swanky offices. I understand that when Chancellor George Osborne was asked at a private gathering why the Tories stuck to such an unpopular policy, he replied that it was ‘to keep the charities off our back’.
This does not seem the best reason to blow billions of pounds of other people’s hard-earned money.
Yet they should not be so scared of the avaricious aid industry. For politicians in the Netherlands have proved a country can remove itself from the hook of this anachronistic target, leading to little fuss and smarter spending.
This is a liberal country, long admired for its global outlook, which four decades ago became the first country alongside Sweden to hit the UN target. It went on to hit even higher levels of spending, winning acclaim from a think-tank as the rich nation most committed to interventional development.
But when Holland was struck by the global financial crisis, the governing Left-Right coalition decided it was wrong to cut spending at home but spare aid projects abroad. So calling it ‘development policy modernisation’ they slashed back aid – by £770 million in one year – and fell below the target in 2013.
Last week I met some politicians and civil servants in The Hague, who told me they were nervous about creating a storm of protest when they abandoned the cherished target. ‘We expected more opposition but surprisingly, it did not cause much of a stir,’ said one official.
Polls were consulted, showing only one third of voters strongly backed the policy. ‘They took public support for granted but we discovered the public support was far from enthusiastic,’ said a political adviser. ‘Now Ministers say it is not just about budgets but about results.’
How right they are. These sensible Dutch officials admitted there used to be an urgency to spend money in times of growth. Now they say reduced budgets – down from 0.8 per cent of national income down to just over 0.6 per cent – have led to renewed focus on sharper spending.
What a contrast to Britain. Here our political leaders, so desperate to look caring and so trapped by outmoded ideas, continue to chuck cash out the Dfid doors as fast as they can even as they close libraries and struggle to fund the Health Service.
Mr Cameron wants to remould his party into compassionate conservatives. Yet there is nothing compassionate about this Great British Giveaway, which often ends up hurting poor people and undermining democracy. Nor is there anything conservative about wasting money with such reckless abandon, especially when it is done simply to silence the bloated poverty sector.
It is time for this Government to steel itself, show a little Dutch courage and ditch this crazy target.