Ten great myths about foreign aid:
After Cameron described critics as 'hard-hearted', how your money is
pledged to pour hundreds of millions more into propping up Afghanistan,
David Cameron this week accused critics of his foreign aid policy of
being ‘possibly hard-hearted’. The fact is we’ll soon be spending more
on the Third World than on the Home Office and, while other budgets
face cuts, overseas aid is being increased by billions. Here, IAN
BIRRELL reveals what really happens to all that money . . .
Aid mission: Prime Minister David Cameron
holds a baby as he visits Darfur in Sudan
MYTH 1: We can afford to spend a
few billion pounds to help the world’s poor
Defenders of aid say we have a
moral duty to help those less fortunate and we are a rich country that
can afford it. This argument is put forward by ministers and supporters
such as the heiress Jemima Khan, who claims Britain is wealthy enough
to spend such trifling sums on aid.
Here are the facts. When Tony
Blair established the Department for International Development (DFID)
as the political wing of the charity movement in 1997, its budget was
£2.6 billion — more than twice the Foreign Office allocation.
Today, we spend £8.1
billion, which will increase to £11.4 billion in 2014 — a 34 per
cent rise, despite spending cuts elsewhere.
Unsurprisingly, MPs are
getting a growing postbag over this. We are giving more than £300
per household to the world’s poor while public sector jobs are lost and
vital services for the elderly and disabled are closed. The head of the
Royal Navy has warned there may not be enough money to pursue the war
Four out of five voters oppose
the cross-party consensus of increasing aid spending, according to a
new YouGov@Cam survey. I share the ideals behind foreign aid — and, if
it worked, I would say spend more. Unfortunately, the policy is based
on old-fashioned concepts, outdated figures and all too often makes
life worse, not better, for people in poorer nations.
MYTH 2: We must hit the UN target to give away
0.7 per cent of our GNP in aid
Ah yes, the sacred target. For
a government promising to sweep away targets, the Coalition is
strangely wedded to this particular one.
We’re handing over 0.56 per
cent of national income — far more than our economic rivals. Germany
contributes 0.38 per cent of its income, while we donate twice as much
as Japan and five times as much as Italy.
But this target is absurd,
arbitrary and outdated. It was first calculated more than four decades
ago based on theoretical data from the Forties, and was the result of
back-of-the-envelope calculations of the needs of poor countries.
Since then, Western economies
have soared while many poor nations have stagnated.
Five years ago, the United
Nations itself said the amount of aid really needed was 0.44 per cent
of national income.
applying the original calculations to today’s world yielded an aid goal
of just 0.01 per cent of rich countries’ gross domestic product (GNP).
Young Iraqi men struggle to get boxes
with food: Today Britain spends £8.1 billion on aid, which will
increase to £11.4 billion in 2014 - a 34 per cent rise, despite
spending cuts elsewhere
MYTH 3: Aid works
The economist Peter Bauer
famously said aid transfers cash from poor people in rich countries to
rich people in poor countries. His words have been underlined by scores
of studies that found idealism tempered by harsh reality.
Zambian economist Dambisa Moyo
revealed the West had given more than half a trillion pounds to Africa,
but over the past three decades the most aid-dependent recipients saw
negative annual growth rates.
Haiti is another example. It
was given official aid of more than £6 billion — four times as
much per person as Europe received under the Marshall plan for post-war
reconstruction — in the 50 years before last year’s earthquake.
Private aid poured in as well,
with more charities operating in Haiti per capita than any other place
on the globe. Despite this, income fell by a third.
It has, of course, endured
despotic leaders, dreadful corruption and political unrest.
The same goes for the
Dominican Republic, with which it shares an island — but while
receiving far less aid, this nation saw incomes and life expectancy
soar over this period.
MYTH 4: OK, it hasn’t worked in the past, but
it will in the future
Whenever people point out that
mountains of money have disappeared into thin air, the aid lobby says
it has learned the lessons of the past.
So yes, cash funded dictators,
fuelled corruption, fostered a dependency culture and aided genocidal
killers, but things are different now. The new buzzword is ‘smart aid’.
To be fair to Andrew Mitchell,
the international development secretary, he has stopped some of
Labour’s most outrageous abuses, such as £115,000 spent on stalls
at summer music festivals in Britain, and he is right to boost
transparency and encourage trade. But the flawed fundamentals remain
And his department’s top civil
servant admitted this week the Government still has no idea how much
money is being lost to fraud and corruption.
Marines unload aid in Haiti: The country
was given £6 billion - four times as much per person as Europe
received under the Marshall plan for post-war reconstruction - in the
50 years before last year's earthquake
MYTH 5: We will ensure 100 pence of value for
every £1 spent on aid
This was the message Mr
Mitchell gave a sceptical Tory Party conference last year, which he
repeated to an equally sceptical looking Jeremy Paxman on Newsnight
last month. But it’s not true.
There have been many attempts
to quantify how much Western aid really helps intended beneficiaries.
Generally, it is estimated by
think-tanks and charities that the real figure is in the region of 40p
in every pound, though British aid is seen as more cost-effective than
The rest is swallowed up by
bureaucracy, corruption, consultants, charity costs and duplication
between donors — bear in mind dozens of countries and thousands of
charities give aid. Indeed, an African nation must waste precious
resources churning out 10,000 action reports for aid donors a year.
One UN adviser looked into a
house-building project in Bamiyan, Afghanistan, that began with
£92 million in the bank. The job was sub-contracted so many times
through agencies in Geneva, Washington and Kabul — each taking
administration fees — that by the time the money got to those working
on the project, they could afford to buy only some wooden beams from
They were delivered for five
times the normal cost by a company owned by the Bamiyan governor, but
turned out to be too heavy for village houses. So they ended up as
Or take India, which spends
£1.5 billion a year on a space programme, but is still one of the
biggest recipients of our aid.
The World Bank just carried
out the first major evaluation of its aid programmes and found so much
corruption that only 40 per cent of grain given to the poor reaches its
MYTH 6: Aid changes the world for the better
British aid props up
Human Rights Watch issued a
devastating report last year that revealed how DFID’s 250-strong staff
in Ethiopia failed to monitor annual spending of nearly £300
Worse, British taxpayers’
money was shoring up an autocratic regime, funding indoctrination and
with food used as a political weapon.
The same is true in Rwanda,
where Britain aided a sham election last year by funding the electoral
body that prevented the president’s rivals from standing and the media
council that closed independent newspapers.
This tiny nation, a favourite
of Mr Mitchell, is being given an average £83 million a year
despite last month’s disclosure it had sent a hit squad to assassinate
exiles living in Britain.
We have also given substantial
sums to Yemen, despite the concerns over the regime’s appalling human
rights record that has helped fuel unrest.
Indian floods: Villagers run to get
supplies being dropped - but the country spends £1.5 billion a
year on a space programme, yet still one of the biggest recipients of
MYTH 7: The slew of statistics prove that aid
is a success
Here is the core argument,
repeated by the Prime Minister in a passionate defence of aid last
As ever, it was accompanied by
a grief-stained tale from a slum and statistics on lives saved and
children educated thanks to British generosity. Unfortunately, this is
far from the full story.
The Coalition is tackling
welfare dependency at home, but encouraging it abroad. When countries
are given more than half their income, they have less incentive to
respond to citizens’ needs.
Harvard Medical School found
local spending on health fell when health-related aid was given in
This means we pay for schools
and hospitals, enabling politicians to steal vast sums or fritter away
revenues on arms and security (usually sold by the West, with bribes
They win elections through
bribery or violence rather than improved public services, while
innovation is stifled and local entrepreneurs are driven out of
business by dumped goods and cheap money.
The result is that aid
corrodes, rather than builds, civil society, as senior charity
officials have admitted to me.
This was the message from a
conference I attended in Pakistan two months ago, where academics from
across the political spectrum blamed aid for their nation’s mounting
problems, with venal politicians ignoring citizens’ concerns and an
over-powerful army grown fat on foreign funding.
Needless to say, Britain plans to
double aid to nearly half a billion pounds a year to Pakistan. Compare
this with Somaliland, which emerged 20 years ago from the chaos of
Somali civil war.
Because this state is not
recognised, it depends on local tax revenues rather than huge dollops
of aid — and, as a result, it has rapidly developed one of the most
inclusive, accountable governments in Africa.
MYTH 8: Britain will no longer
tolerate mis-spending of funds
Uganda has historic ties to
Britain and is among the most favoured recipients of aid.
When Mr Mitchell was
confronted on Newsnight over a Daily Mail report that President Yoweri
Museveni had bought a £30 million private jet, he said this
happened under Labour and such behaviour would no longer be tolerated.
So here is a conundrum for Mr
Mitchell. Put aside Mr Museveni’s use of violence and bribery to win a
disputed election this year.
What about the recent
revelation that he was bought six Russian fighter jets at twice the
market rate and without parliamentary approval?
The sum involved was nearly
half a billion pounds — three times annual spending on Uganda’s health
service and the same amount, coincidentally, as we plan to give over
the next five years.
It’s thought nearly £2
billion has been spirited out of Afghanistan since 2007, some to Gulf
tax havens, with the family and associates of President Hamid Karzai
linked to a £90 million Dubai property empire.
Much of this cash is from aid
donations, with £25 million disappearing from one donation to a
hospital alone. Despite this, last year Britain announced that aid was
rising by 40 per cent to £178 million a year.
Turkish help for Syria: Aid corrodes,
rather than builds, civil society, as senior charity officials have
admitted to me
MYTH 9: Aid is in our interest to prevent
When all else fails to
persuade voters on aid, politicians appeal to self-interest. It makes
sense, they say, because developing the poorest countries means less
This sounds logical. But it is
wrong. Dr Hein de Haas from the International Migration Institute at
Oxford University has shown that social and economic development leads
to more migration because it increases people’s ability to move and
Travelling across continents
is costly, while education lifts expectations and technology such as TV
and computers offers a glimpse of wealthier lifestyles.
As Dr de Haas points out, this
is why the heaviest immigration come from countries such as Mexico,
Morocco and the Philippines — hardly the world’s poorest places.
10: Developing nations are desperate to be saved
Overseas aid began as a
political stunt and remains a political stunt, used to prove
politicians have a heart.
But the more I travel around
Africa and Asia, the more criticism I hear of how the constant emphasis
on aid and endless negative imagery demeans developing nations.
This is worsened by the
associated boom in the highly competitive charity sector — as one
British official said: ‘If you don’t have starving babies, you don’t
get the money.’
It is noticeable the most
passionate saviours of the world are Western pop stars and politicians,
while the most trenchant critics come from developing nations.
‘The premise is that Africans
lack the capacity to save themselves and must rely on the kindness of
strangers,’ said Thabo Mbeki, former president of South Africa.
Last month saw the first steps
taken in the creation of an African free trade area that will stretch
from Cape Town to Cairo and straddle 26 countries.
It also saw the largest amount
raised yet for a private equity fund targeting the continent, a
reflection of the fast pace of growth in much of the region.
This is the future, not our
outmoded obsession with aid.
Read more: http://www.dailymail.co.uk/debate/article-2012074/Ten-great-myths-foreign-aid-After-Cameron-described-critics-hard-hearted-money-squandered.html#ixzz1RP4X8JV8