Commentary / World

A new way of thinking about foreign aid

The British government has just made a significant change in its aid and development policy.

Hitherto, and for some years past, the British aid program has been administered chiefly by a full department called the Department of International Development (DFID), with its own agenda and priorities. But now it is to be absorbed into the Foreign and Commonwealth Office (FCO), the United Kingdom’s foreign ministry.

We are talking here about a very large operation, with an annual budget of around £15 billion ($19 billion). This is the third-biggest aid budget in the world (depending on how one measures aid), considerably larger than Japan’s international cooperation program (around $15 billion) and amounting to 0.7 percent of gross national product, enshrined in law, as against 0.28 percent in Japan. The percentage for the United States is lower than that. Only Germany can match anything like the British 0.7 percent.

The philosophies behind the Japanese and the British aid programs have always been different in some ways. Japanese development aid, while retaining a strong social element, has since the days of postwar reparations been rather more geared to serve strategic and national interests, while British aid has been heavily slanted toward the alleged “purity” of aid flows, free of any taint of British interest in other areas, whether of the commercial, security or national strategic kind.

This has led in some cases to the former DFID pursing completely separate goals from the FCO, and even in some recipient countries having separate offices that rarely liaised.

Now, with the merger, the hope is that while the humanitarian part of aid remains as important as ever, some aspects will be better dovetailed between the two sides of the U.K.’s overall international involvement.

Japan’s aid policy reflects the same humanitarian concerns, and supports the U.N.-defined Sustainable Development Goals. But it also has more room for alignment with business and trade interests, and has clearly led to much more direct Japanese involvement in developing country projects. The current project to help India build a high-speed bullet train from Mumbai to Ahmedabad with strong Japanese cooperation is a good example.

This seems thoroughly sensible, as well as good domestic politics. Spending very big amounts of taxpayers’ money overseas, at a time when resources are scarce and home social needs are acute, requires strong justification to the general taxpaying public.

All this should be helped by bringing U.K. foreign policy and aid and development policy closer together under one roof. That, at any rate, is the hope.

But behind all these moves rests a deeper and more modern analysis that calls into question the whole traditional aid philosophy and doctrine.

The overseas aid cause was born out of theories about economic progress that blossomed in the 1950s and 1960s about the stages of growth in different societies, promulgated by such economic giants as professor Walter Rostow. Political leaders like U.S. President John F. Kennedy, sensing the idealism behind the aid concept, and seeing also the potential advantages for Western democracy, gave full backing to the cause. The argument was quite simply that if enough money could be poured into poor countries to trigger growth, the populations of those countries would prosper and stay at home as their conditions improved. Problems of mass migration to more advanced societies would therefore be headed off.

When none of this worked out, as growth in even the most heavily aid-dependent countries failed to take off, and emigration from poor regions, far from falling, began to soar, the mood about aid turned much more critical.

Most familiar have been the claims that corruption has siphoned off the funds, that aid stifles rather than promotes grassroots enterprise, that aid agencies, both national and international, have too many staff on high salaries, that the money has gone to monster projects with small, and sometimes negative, impact on the poorest people, and so on.

But perhaps there is now a new doubt, beyond this familiar string of complaints, that strikes even deeper at the whole aid concept. This is quite simply that throughout the developing world there is a new mood of both pride and hope. While specific humanitarian projects, aimed at relief of disease, famine and natural disasters, will always benefit from money and expertise from any source, the general idea of funds being handed out from the rich to the poor is not so welcome. Somehow it is beginning to feel patronizing. Even the word “aid” itself starts to jar.

Two or three decades ago it seemed that the very poorest African countries had no choice but to accept the largess of the richer world. The picture of Africa as a jumble of corrupt dictatorships and impoverished communities appeared to offer no future and no escape. But now, thanks in large part to new technologies and the digital revolution, the path to prosperity has opened up, and with it a growing sense of self-esteem within African communities.

Africa is rising. Its population in a few decades could exceed a billion people. Africa can increasingly afford to choose how and from where to take its investment and its funding.

Perhaps the current manifestations of Black indignation and anger round the world are signs not just of the old sense of despair and hopelessness, or of being trapped in dependence on the charity of others, but of just the opposite — that there is now at last solid hope and opportunity in sight, with the South not only catching up with the North, but in places overtaking it.

In short, the tiny microchip could be doing the work that all the gigantic flows of aid after the past 60 or 70 years have failed to do. And perhaps this means that as attitudes toward aid have changed at the recipient end so they need to change at the donor end as well.

David Howell is a Conservative politician, journalist and economic consultant.

Coronavirus banner