Writing over 200 years ago, Adam Smith asked how “a man of humanity” would react to a catastrophe in a far-off land. “If he was to lose his little finger tomorrow, he would not sleep tonight.” And yet, with enough distance from the event, he would “snore with the most profound security over the ruin of a hundred million of his brethren.”
In December, a UN report estimated that Covid-19 will push not 100m people, but 200m—mostly in Africa—into extreme poverty. This will bring the total living below the generally accepted breadline (calculated at $1.93 a day) to one billion.
Most people would agree that is a catastrophe, so how will we react? Well, not by providing more aid, it would seem. At present, Britain is the only G7 country to spend at least 0.7 per cent of national income on overseas development assistance. But it will soon lose that distinction.
In June, Boris Johnson announced that the Department for International Development (DfID) would be merged into the Foreign Office. DfID—widely regarded as one of the most conscientious, accountable and effective aid agencies in the world—would no longer provide a “giant cashpoint in the sky.”
The 0.7 per cent target was not at that time questioned by Johnson. His argument then was that the restructuring was about doing aid differently, not that there needed to be less of it. But the move—and the Prime Minister’s accompanying rhetoric—set up a soft target for Treasury cuts.
It was too soft not to be exploited. In November the Chancellor, Rishi Sunak, reduced the target to 0.5 per cent of national income—and national income has, of course, fallen. The overall effect is a cut to aid spending of 25 per cent, or £4bn (coincidentally or not an annual reduction that exactly matches the increase in the defence budget awarded in the same spending round).
The UK’s ambitions to be an “aid superpower”—which have spanned the Blair, Brown, Cameron and even May governments—look to be at an end.
The cut is supposedly temporary, to “pay for Covid,” as if that were not also a humanitarian challenge, and one that is far harder in countries with smaller and more fragile economies. But it is a shattering of a promise that survived through the austerity years, and the felling of the most visible symbol (save perhaps for gay marriage) of David Cameron’s project to modernise the Tory Party. These will be difficult steps to retrace.
The global significance is all the greater because it fits an established trend across the Anglo-Saxon world. New Zealand began cutting around a decade ago, Australia and Canada followed, all with proportional dips in the “aid share” of national income ranging from a fifth to a third, sometimes with the winding-up of development departments thrown in as well. The US has not yet followed suit—but only because Donald Trump’s attempt to do so failed to get through Congress (like Sunak, he was proposing a cut of a quarter).
Here in Britain, the focus of aid spending is already changing. Dominic Raab, the small state Tory who as Foreign Secretary is now in charge of development policy, has announced a “new strategic framework for aid,” which, strikingly, includes no explicit commitment to reduce global poverty. Many in the aid world fear an abrupt shift in priorities, from the poorest and most vulnerable to “areas of maximum British interest,” and furthermore that this interest will then be defined in a narrow way.
Andrew Mitchell, who was Conservative International Development Secretary between 2010 and 2015, is a vocal supporter of British aid as a force for good in the world, and bristles with anger at what the Johnson government has done. “If you take these amounts out of the budget, across the board, then you will by definition take a million girls out of school,” he says. “You will stop family planning and contraception from reaching 7.6m women and girls. You will stop 3.8m people getting access to clean water, when dirty water and waterborne diseases kill thousands of children every week.”
He also points to the impact of the cuts from a broadly defined national interest perspective, one that emphasises “soft power.” He said: “what we have done is destroy what was internationally agreed to be the most effective engine of development anywhere in the world. Every current member of the House of Commons was elected on the promise of standing by the 0.7 per cent target. Now we’ve got Joe Biden in the White House, and he wants to rejuvenate and revivify the international system. So what’s the first thing we do? We introduce this dismal, mean-minded, nasty cut.”
Mitchell awaits the looming “integrated review” of security, defence, development and foreign policy—due early this year—with foreboding, pointing out that the country is supposed to be “in the process of working out what ‘Global Britain’ means. The one tangible aspect of Global Britain at this point is the one that lies shattered on the floor of the Foreign Office.”
“The one tangible aspect of ‘Global Britain’ is the one that lies shattered on the Foreign Office floor”
Yet in response to such a historic and controversial policy shift, it is striking that few people are today willing to defend aid in the purest terms—as an expression of altruism, a way of meeting an obligation to help others. Why not? We have the means if we choose to use them. The G20 countries have recently “found” $10 trillion for propping up their own economies from the fallout of the pandemic. If we want to find the resources then we can; the doubt attaches to whether we have got the ability to use them well.
On this question, there has been a notable collapse in the confidence of the aid “industry.” Insiders, and we include ourselves in this (representing, broadly, the donor and the recipient sides), increasingly worry that developing country governments and populations can end up being forced to the margins of decision-making in crucial fields of public policy.
Donor fads for particular “models” can displace locally tailored solutions to familiar local problems—and with a hammer pre-selected as the tool, the challenge becomes finding a suitable nail.
In 2008, the government of Lesotho was encouraged by donors to sign a contract with a large South African healthcare corporation, Netcare, to build a new hospital in the capital, Maseru. The contract was based on Britain’s now-defunct PFI model, but the commercialisation involved went far deeper, including the de facto privatisation of all core clinical services.
This small, poor, rural economy had limited capacity to plan, manage or superintend such a complex deal. Costs ballooned. With the hospital accounting for a third of the country’s health budget, the government found itself unable to pay the bill. Netcare is trying to enforce settlement of a M686m debt (about £33m) that it says it is owed. Who knows what the eventual consequences for Lesotho’s economy and healthcare will be.
Fundamental questions—and deep anxieties—arise. Are we doing any good, or as much good as we could be? Might we be doing harm?
The British development expert Paul Collier’s Bottom Billion (2007), Zambian economist Dambisa Moyo’s Dead Aid (2009), and NYU economist William Easterly’s The White Man’s Burden (2006), are only the most well-known outputs from a thriving cottage industry producing books on precisely these questions. Each takes its own line, but some themes echo throughout—in particular, the intractability of development problems, the impossibility of resolving them “from the outside,” and the risks to the economic and political health of a society that is created by the attempt.
Some depict aid as inherently harmful, an invitation for “rent-seeking” over productive activities, and perhaps a major reason for Africa’s stubbornly disappointing growth over decades. Moyo describes how African net manufacturers were forced to close when aid agencies shipped in and distributed (for free) a huge consignment of mosquito nets. Such “helicopter solutions” can help aid agencies meet targets, but at the cost of undercutting local firms, including those needed to address demand for nets in the future. Critiques of this sort are now widely read on the political left as well as on the right.
The US economist and Nobel laureate Angus Deaton, an expert on inequality, has been another influential critic of aid, which he believes can drive a wedge between governments and populations, and inhibit the emergence of institutions that are needed to underpin economic development. “I worry about what has been called the technocratic illusion—the sort of hubristic idea that somehow you can develop a country from the outside,” he says. “The current demoralisation” which he sees “slowly permeating [the] aid world is completely understandable in this sense—the inevitable result of asking good people to undertake what is effectively an impossible task.”
Are there, then, alternative pathways for development that are practically useful—and politically sustainable too? China has been increasingly active in this space, and takes a very different approach. Its explicit focus is on the “hardware” of development—and infrastructure in particular. It places little emphasis on “good governance,” still less on democratic norms which it has, after all, rejected for itself. And this “fewer-strings attached” approach to development has been popular with governments in Africa and elsewhere. For Paul Collier, based at Oxford University, this comes as no surprise: “Of course, the mutual benefit principle promoted by China is something that African governments like—both because it’s more reliable and because it’s less insulting.”
It’s also generously funded, including under China’s Belt and Road initiative—a vast, transcontinental development project looking to improve connectivity among nations in Asia, Europe and Africa, a centrepiece of President Xi Jinping’s foreign policy. When, in 2018, Xi addressed a major summit of African leaders, and offered $60bn in new financing and the write-off of some loans, some 51 African heads of state attended—more than twice the number that made it to the UN general assembly two weeks later. China has its own interests of course and some worry that its conditions just take a different form. But Collier cautions against assuming the recipients are naive: “African governments have learned from experience and are quite wary of China now. But at least China is talking about mutual benefit, and this is very, very healthy, much healthier than this sort of patronising ‘we will save you’ perspective.”
But others, including in the Labour Party, remain keen on aid as a tool for projecting western values in a range of ways. Sarah Champion, Labour Chair of the House of Commons International Development Committee, insists this approach can continue, even under a Johnson government: “Some UK aid has always been based on values and this won’t change—even the new strategic priorities include references to things like the promotion of democracy, human rights, media freedoms and effective governance.”
For Champion at least, pragmatism as well as principle points to continuing in this vein: “This is not just ‘ethnocentric virtue signalling.’ It is also based on what works actually in terms of creating the conditions for sustainable… prosperity, including the construction of attractive business environments that everyone can have a stake in.”
Yet this way of thinking seems anomalous, at best, when set against this country’s wider engagement with developing countries, most obviously its commercial involvement, which is very heavily focused on extracting natural resources.
The International Monetary Fund defines a “resource-rich” country as one that depends on natural resources for more than a quarter of its exports. Africa is home to 15 per cent of the world’s crude oil, 40 per cent of its gold and 80 per cent of its platinum, and has 20 “resource-rich” states.
The exploitation of these natural resources by British multinationals, and the ruinous effects of this on African economies and societies, is well described in Tom Burgis’s The Looting Machine. He points out that in 2010, fuel and mineral exports from Africa were worth some $333bn—more than seven times the value of the publicly-funded flow of resources that went in the opposite direction (and that’s before factoring in the vast corruptly acquired sums being spirited out of Africa and into the City of London).
“Not since Cecil Rhodes’s imperialist ‘Cape to Cairo’ project have western resources built African rail, roads or ports”
“What is happening in Africa’s resource states is systematic looting,” Burgis argues. “Where once treaties signed at gunpoint dispossessed Africa’s inhabitants of their land, gold and diamonds, today, phalanxes of lawyers representing oil and mineral companies with annual revenues in the hundreds of billions of dollars impose miserly terms on African governments and employ tax dodges to bleed profit from destitute nations.”
In this context, it seems logical to question what Britain and the rest of the west are up to when it comes to aid. If its overall developing world presence is fostering a series of states denuded of their natural resources and dependent on outsiders for the means to provide basic social services, then what is it really about? And how can we reform aid so that it can no longer be caricatured as an exercise in soothing a guilty national conscience?
Not since Cecil Rhodes’s imperialist project of connecting Cape to Cairo in the 1870s has there been any programme backed by western financial resources to build African railway lines, roads, ports, water-filtration plants, or power stations. In pointing out this remarkable fact, W Gyude Moore—senior policy fellow at the Center for Global Development in Washington—adds that this is now becoming a marked contrast between the west and China, as Beijing moves to fill the infrastructure gap. “Even if it doesn’t work,” says Moore, formerly a minister of public works in Liberia, “it’s still an incredibly innovative thing to do—a transcontinental infrastructure system that links the poorest places in the world to the world’s largest economy. So, that’s an exchange; that’s the mutuality principle in action.” He adds: “There has been nothing preventing Europe in the last 100 years from implementing a programme like this. But it has never happened.”
It seems as if Europe has never thought seriously that there might be benefits to having a truly prosperous African neighbour, as opposed to a continent to be extracted from and then rescued by turns. No European-inspired Belt and Road initiative is on the cards. To Collier, the whole western strategy is wrong-headed.
“Talk to any African government. Their first priority is the creation of jobs. Proper jobs.” And yet the west’s aid agencies “pulled out of infrastructure long ago, and started financing social stuff instead. That’s important, but there’s a need to get back to financing the basic [physical and organisational] infrastructure” because “without it countries can’t develop.”
Financing infrastructure and the things that firms need to go and use it has to be the future of aid, because—as Collier explains—“that will then build the tax base which then enables governments to provide the social stuff themselves. And that in turn will help them deal with their governance challenges, because if they can provide the social stuff directly, that is going to help them build legitimacy. That’s the virtuous circle that we in the west need to be supporting.”
Perhaps what western aid needs is a vision of how to do good, for the west and the rest to become, in Collier’s words, more reliable—and less insulting—as a partner. The old contrast between giving a man a fish so he can eat for a day, or teaching him how to fish so he can eat for a lifetime, doesn’t quite convey the reset that’s required, because it still makes aid something that “we” do for “them.” Millennial parlance captures it better: what could be needed is a “you do you” approach. To provide the means for countries to escape their most damaging constraints—in infrastructure, in trade, in basic organisational capacity—but forego the temptation to micromanage local economic evolution, still less local culture.
This will sometimes mean, of course, “looking away” from practices and norms that most of us would very much want to change. But in the context of our broader and—at best—amoral economic engagement with many recipient countries, from their perspective, attempts at such intervention will never look like anything other than empty virtue signalling. Aid is a blunt instrument at best for resetting social values. The march of human rights and freedom has to proceed exactly as it did in our own countries—by ongoing political negotiation and argument.
The new approach would have less emphasis on the west’s concern for “good governance,” and more on supporting the social objectives that are actually prioritised by governments and the societies they serve. As Daron Acemoglu and James A Robinson argue in their magisterial The Narrow Corridor: States, Societies and the Fate of Liberty, such priorities can never be imposed from outside, but have to emerge through a process of “perpetual struggle” as social groups contest for state power. Hopefully, if they want to hold on to power, at some point they will demonstrate that they can use the essential sinews of government—taxation, the law and security—to help ordinary citizens, foster prosperity and widen access to public goods, such as vaccines.
Empowering economies to develop on their own terms involves less threatening, less bribing, and less preaching. But get it right, and it could do more to promote democracy than today’s muddled schemes.
The US Marshall Plan for post-war Europe provides the most encouraging precedent. Of course it served a broad strategic purpose in the early Cold War, but the countries involved weren’t tangled up in obligations that may or may not have suited their own preferences. Instead, the broad hope was that a generosity of spirit and optimism about the possibilities of mutual self-interest would increase the power of the American exemplar—and so it proved, with consequences that are still with us over 70 years later.
In contrast to Adam Smith’s “man of humanity” two and a half centuries ago, we are no longer isolated from the catastrophe facing poor countries. Even before this global pandemic, politics, economics, travel, technology, terrorism and more all intertwined our fates. We also now have the information, resources and the means to act. Distance, then, can surely no longer be any excuse for sleeping soundly while failing to do so.
But you can’t pursue anything effectively without being clear about objectives—and promoting development is no exception. We must first take an unflinching look at every aspect of what we are trying to do—how? for whom? to what end? Investing in infrastructure that can generate “real jobs,” and with it prosperity and goodwill, some of which may—somehow, eventually—flow back in our own direction, is as cogent an answer as any to this set of questions. As such, it could not only sharpen the focus of those tasked with delivering aid, but also make it something which can at last be explained and defended to the taxpayers who foot the bill. At that point international development would not only be more effective, but might at last become sustainable too.
