Trade not Aid

By Charlotte Argyle

Foreign aid is a divisive topic. It never fails to evoke strong opinion and mobilise the heartstrings of those of a naturally charitable nature and altruistic disposition. It is for these reasons that we can often become blinded to a counter argument on the basis that it is somehow of self-interest for a western society with so much to deprive those societies with so little. After all, 0.7% of total GDP is so little – how can we possibly object, right? Well, let’s look at this a little deeper and across a number of levels.

I hope you will agree, that what you are about to read is designed to provide a more balanced and pragmatic narrative, while it retains an appreciation for the moral and inherent desire to assist those less fortunate. To be clear, I believe in the stabilising effects of the institutes of civil society which are naturally brought about in an environment of economic prosperity within a free market and I advocate principles which look to provide an opportunity for these geographies to prosper under their own economic incubators. In doing so, they gain the fulfilment and retention of associated economic rewards. Give a man a fish or teach a man to fish if you will.

What is in a number by which any other number would smell so sweet?

0.7 is the magic number and it derives from a World Bank report, the Pearson Commission, published in 1969, a time when the world was a very different place – as was Britain’s position within it. This was a time when The Beatles were giving their last public appearance, The Berlin Wall was standing strong, China was in the midst of Red Guard anarchy and Brazil was not the 7th fastest growing economy.

A quick look at the numbers shows that for every £10 we spend 16p of this goes on international aid, with more than £60m a year of British aid paid to countries in Europe (DfID figures). Until 2010, beneficiaries included: Croatia, the Seychelles, Mauritius, Malaysia, Oman, Turkey, Chile and Argentina. Why and how have we have become so fixated on delivering upon a target with is over 40 years out of date and to countries that, thanks to economic prosperity, can finance the projects themselves? To further compound this in some cases, the fund doesn’t reach the front line. At best aid makes marginal inroads to service its objectives; at worst it sustains corrupt foreign governments.

Britain has and continues to spend more money on foreign aid, as a percentage of Gross National Income (GNI), than any other G8 country with an applauded 100% achievement on aid targets. It could continue to spend 0.56 % of national income on aid in line with the £12 billion it spent last year if it so chooses. However, at a time of national austerity, we need to evaluate and renegotiate what role we are looking to have in the international landscape and recognise that  if we are committed as a coalition government, to spend 0.7% of national income on international aid, it is vital that we review the direct end result of bilateral aid and multilateral aid alongside the current economic standing of these countries and the processes by which we have in place – to ensure that there is appropriate tracking of the fund and that clear terms have been agreed with incumbent governments that they will take their vital role in promoting both moral and economic change.

Never again should we have an incidence where DfID admits to the National Audit Office that it did not know in which country £530 million of aid was spent nor where a country like Nigeria, which is flourishing into an emerging economy – with the second highest national income of all African countries, receives £275 million from the UK in 2013 and a further £250 million until 2015.

For non-interventionists, assurances and evidence demonstrating that more than one tenth of the budget does in fact finally reach its humanitarian or emergency aid purpose would better serve moral aspirations and also appease concerns over corruption.  I am a great believer that any society which is left to function without the conditions of corruption and fear will eventually produce pockets of enterprise. Redefining foreign aid with a focus on mutually beneficial trading relationships and long-term infrastructure projects is not a short-term solution but the only way to bring about long lasting change. By continuing to not take a holistic approach to tackle the route cause simply acts to maintain the status quo and the dinner tables of corruption.

Western societies have long recognised the power of the free market and economic mobility to increase wealth across demographics, civilise and promote stability.  Let us not forget that the Arab Spring was not about democratic freedom, it was about food (Liam Fox ‘Rising Tides’). We must remember that Western society will not change the world alone, nor should we be so pompous as to assume that everyone wants to live the way we do. We can however recognise that regardless of our inability to change long entrenched political wrong-doings or misallocation of resources, what we can do is promote mutually beneficial trade agreements which, over time, set the foundation for something much more powerful within these countries AND reciprocally for Britain. Rather than incessantly throwing money over the fence we should be encouraging EU regulation to promote access to free trading with these countries and call for a decline in prohibitive business tariffs. We need to recognise that allegiances promote increased stability in a way which only business can bring over religion.

At a time of austerity, with debt at £1.2 trillion we have asked out businesses to make a number of difficult choices and many sacrifices have been made both by employee and employer. It is out of respect for our own taxpayers that processes must be put in place to properly understand and evaluate our international spends. The UK economy may of grown by 0.8% in the third quarter of 2013, up from 0.7% in the second quarter of the year (Office for National Statistics), but if we are to ask for sacrifices at home we cannot justifiably continue to aspire to a figure with no basis on fact and which leaves most of us out in the cold.

Western society is obsessed with the concept of intervention at any cost. We are at times so bold as to believe our way is the right way. Until we stop trying to make ourselves feel better for the luxury we have and look at the hard facts we will achieve nothing. These are territories with long legacy problems of poor human rights, little education and conditions ripe for governmental corruption. Rather than continue to provide a ubiquitous 0.7%, we should look to negotiate the conditions to bring about change within the legal and education system and invest in forward looking infrastructure which would in time naturally lift people out of poverty, while opening the door to improved reciprocal trading relationships. After all, isn’t this much like our friends in China who have recently invested £13bn into Basra. Now there is an argument for trade not aid…