The evidence for privatising aid is thin. So let’s at least have the debate before subjecting millions of people in the global south to free market experiments.
Alex Scrivener is a policy officer at World Development Movement
“At last!”, the Daily Mail headline exclaimed, the Tories have “seen sense” on aid.
The tabloid was of course responding to the announcement that more aid would be distributed through British companies instead of going directly to “wasteful” governments.
In the event, international development secretary Justine Greening’s speech to the London Stock Exchange on Monday was less dramatic in style. She underlined that the move towards private sector involvement didn’t signify a return to the bad old days of “tied aid” – the practice of forcing aid recipients to buy UK products and services.
But while some of the rhetoric was clearly aimed at pacifying the anti-aid Tory right, there was a lot in the speech to worry people concerned about aid effectiveness.
Firstly, there was the namedropping: Coca Cola, Tesco, GlaxoSmithKline, Unilever and Sainsbury’s were among the companies hailed as pioneers of development by Greening.
Would that be the same GlaxoSmithKline which sued the South African government after it attempted to provide its citizens with AIDS medication they could not afford ? And would that be the same Coca Cola which is leading efforts to turn clean water into a priced commodity that can be traded on financial markets?
There is a genuine argument to be had about the appropriate role of the local private sector in development. But there are also serious doubts about effectiveness of giving out aid money to multinationals.
One company was conspicuous by its absence from Greening’s speech. Nike previously received aid money to implement its Girl Hub project which was judged to have had “serious deficiencies in governance” by the independent aid watchdog ICAI.
Despite the reassurances in Greening’s speech about not returning to tied aid, the constant references to UK aid as “market making” and supporting UK national interests are troubling. The point of aid, she implied, is no longer solely the interests of the poor, but to position UK companies to take advantage of the “emerging opportunities” in the developing world.
The new projects announced to coincide with Greening’s speech underline this approach.
The Department for International Development (DfID) is to put £51 million into providing “independent growth advice” to African countries and will push for barriers to trade to be removed.
Some of this advice (like on streamlining bureaucracy at borders) may be welcome. But given DfID’s habit of hiring contractors like the market fundamentalist Adam Smith International, can we be sure that developing countries will not be told to open their markets to UK exports and privatise their public services?
Fulfilling the 0.7 per cent aid target, although important, should not be seen as an end in itself. The creeping privatisation of UK development aid risks jeopardising the benefits of meeting the target.
And the rhetoric around the UK “national interest” and aid-for-trade risks sending a subtle message to recipient countries that UK aid comes with informal strings attached, even if it is not formally “tied”.
So before entrusting large chunks of the UK’s £11 billion development budget to the likes of Tesco, we need to have an evidence-based discussion about what really works in development.
Is it better to help private education firms like Pearson to build schools for profit, or should we be helping developing countries build their own state education systems? Should we be promoting public private partnerships in health, or should we make sure public hospitals in developing countries are well staffed and well equipped?
So far, the evidence for the benefit of privatising aid is thin. So let’s at least have the debate before subjecting millions of people in the global south to free market experiments.
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