Trade not aid: spending more doesn’t mean we care more

Outside the Catholic mission I walked through rows of women in traditional hide skirts, squatting or sitting with legs astride, palms upturned in supplication. Many suffered from scabies and cradled emaciated babies, and all looked 20 years older than their true age. These are my memories of the Uganda famine in 1980 and these were the survivors. Africa is a different place today and so are the methods used to combat famine. But this was where I learnt about the contradictions of overseas aid.

Aid is pernicious, and injudicious aid can destroy all before it. Take food aid. It is wonderful for saving those in extreme peril, but once the extreme event has passed, it destroys farmers and local markets, and inevitably leads to corruption. It is rather like steroids in medicine, which in the short-term save the patient’s life but in the long-term can easily kill them.

Senior politicians from all sides have criticised the Chancellor’s announcement of a reduction in the aid budget from 0.7 per cent of national income to 0.5 per cent — hardly a word has been said to support it. Yet if we applied the same principle to any other government spending there would be uproar. We have long abandoned the belief that success can be guaranteed by throwing money at a problem: a theory tested to destruction in the NHS. Why, then, do we think things are different when it comes to overseas aid? Is it that we believe if we spend more we care more? Is this all about showing our virtue, burnishing our haloes, even allaying postcolonial guilt?

Only a moment’s reflection would indicate that the size of the input is unlikely to be correlated with the output. If input was handsomely rewarded by output, we would have found the way to abolish poverty.

Perhaps we have — it is called trade. Global trade, not development, has pulled one billion people out of extreme poverty over the past 20 years, allowing us to reach so many of the millennial development goals.

But the correlation between input and output in development is frail. We may easily kill the thing we love with our misdirected care and do more damage than good. William Easterly’s 2006 book The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good points out the many problems that plague the sector. Horror stories abound. There are very few easy wins, and unintended consequences are inevitable.

As someone who has worked in this field for over four decades, I have no doubt that small, well-targeted aid is more effective than grandiose schemes. Bilateral schemes are better monitored than multilateral ones, as the buck stops with our own secretary of state. A smaller but better focused and managed aid budget could achieve more than the current one, as demonstrated by Lynda Chalker and Valerie Amos under John Major and Tony Blair. I worked with both and they achieved solid results with budgets a shadow of those now. Today, when so much money is being spent, it has to be handed over to the UN and the major charities which act as their implementing agencies. As much as the government might try — and it has — it is just not feasible to monitor the £15 billion that made up 0.7 per cent of national income last year. Scandals are inevitable.

And is there not something out-of-date and patronising about ‘social development’ — that we will show others how to live when we seem to have made quite a mess of it ourselves? Few people like taking advice on sensitive issues from foreigners, however well intentioned. Development to what? We, with our vast global carbon footprints, are hardly a model to emulate.

If it is trade that eradicates poverty, let us concentrate on removing barriers to trade, improving public health and education to equip poor countries to join the global marketplace. Nowhere is this more important than in African Commonwealth countries, to combat China’s malign influence.

Of course, there is a place for well-directedaid. But it is one thing to give away money that we have, quite another to borrow it so as to give away money that we don’t. Then we are supplying aid only to make ourselves feel good while we pass on the bill to our grandchildren.

No one thinks any less of New Zealand for spending 0.28 per cent or Switzerland 0.44 per cent. Let us be realistic, spend what we can actually afford, and focus what we do on things that will make a difference.