Don’t sell out British aid to business

This week, the government will unveil its review of Britain’s international development budget. The Coalition’s vision for the future of British aid lies in partnerships with business. But to privatize the fulfillment of our international responsibilities would be dangerous, misguided and a waste of public money.
Michael Edwards
28 February 2011

This week, the government will unveil its review of Britain’s £8.4bn international development budget. But what is the Coalition’s vision for the future of British aid? According to Andrew Mitchell, the international development secretary, the future lies in partnerships with business that will decide on priorities for action, “drive innovation in health and food security,” and solve global poverty. What planet is Mitchell living on? Are these the same businesses who refuse to pay their taxes to developing countries to the tune of hundreds of billions of dollars each year, far more than they receive in foreign aid, or whose activities have led to unprecedented levels of inequality despite their investments in third-world economies, or who couldn’t even be bothered to turn up to the World Economic Forum’s only session on world poverty last month, which was subsequently cancelled?

There’s nothing wrong with engaging business where this makes sense – to reduce the costs of new vaccines for example, or get environmentally-friendly technologies to those who need them – but creating a whole new “paradigm” of aid around a single, untested strategy is misinformed, misguided and ultimately a misuse of public money. There is something desperately sad about reducing a project of collective liberation to another bout of deal-making by corporate elites in Davos. What on earth do Mitchell’s colleagues at the Department for International Development think about this move, an agency that led the way in focusing aid on poverty, governance and institutions, but is now in danger of becoming an extension of corporate interests and agendas?

The minister’s new paradigm claims to be based on scientific research and the “relentless pursuit of results,” but it ignores most of what we’ve learned about development since 1945. Plenty of countries in Latin America, East Asia and elsewhere have reduced poverty and improved their health and education during that period, but none of them followed the business-is-best approach. Instead, they used strong public action to direct and regulate the market, recognizing that business was as much a part of the problem as of the solution and could not be trusted to occupy the driver’s seat. And all of these successful experiences of development were locally-designed and controlled, often taking turns that were unpredictable, and shot through by politics and conflicts over policies and priorities – the exact opposite of Mitchell’s belief that technocrats and accountants can control these processes from afar in order to deliver more “value for money".

The truth is that businesses will do what’s in their interests, and if that includes investing in things that are useful and still make a profit then they will do those things too. And if they don’t, they won’t, which leaves huge areas of development untouched. That’s why we still need public money, spent in the public interest, and held publicly to account for its achievements. Our international responsibilities can’t be privatized or handed over to billionaires and celebrities. Mitchell calls his new paradigm “private sector, public benefit”, but “private benefit, public subsidy” would be a more accurate description of what will happen if the voice and priorities of business are allowed to trump open and democratic decision-making. This is hardly a new vision to set the pulse of the public racing. In fact, it’s a waste of taxpayer’s money.

Michael Edwards is a Distinguished Senior Fellow at Demos in New York, and the author of 'Small Change: Why Business Won’t Save the World'.

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