Thursday, February 13, 2014

Is Lady Stocking worth more than 1,000 Rwandans? Guardian nonsense on foreign aid.

The Guardian has this morning gone on the attack over suggestions that the cost of flood damage across much of the UK should be taken from the foreign aid budget. The suggestion was first made by UKIP leader Nigel Farage and subsequently made into a national campaign by the Daily Mail.

The Guardian naturally reels off a list of impressive sounding statistics provided helpfully by those organisations who are responsible for the disbursement of aid. How many children were vaccinated, how many people were provided with fresh water, how many schools were opened. All terribly noble stuff.

But I am reminded of some research I did back in 2001 when I first stood as a candidate for UKIP. The EU's own report on its poverty reduction efforts in Rwanda saw it spend something in excess of $250m over a five year period, and yet the report stated that there had been little impact on poverty reduction, and few wider tangible benefits to report. To put this into context, at the time Rwanda had a population of 7 million, and a per capita income of under $140 and yet giving the equivalent of 4 months wages per person had somehow not managed to make anybody - except those in charge - richer.

The question must be whether things have changed. As things stand now, almost 20% of the nation's GDP is in the form of aid payments. A report by the HRF Foundation - When foreign aid hurts more than it helps - has found that heavy inflows of aid did not materially affect the lives of the vast majority of Rwandans. According to an IMF report, while the richest 20% (predominantly Tutsi) of the population shared over 50% of the nation's GDP, the poorest (predominantly Hutu) 20% shared 10 times less, with only 5.4%. The country ranks amongst the most unequal in the world. The reports authors argue that what such huge tranches of foreign aid have achieved is to ensure that while the nation is broadly peaceful, the repression which lead to the genocide in 1994 between Hutu's and Tutsi's is being reinforced by aid payments which enable the Tutsi minority to cement its position of power, while denying aid to the majority Hutu population. Is this really what we wish to achieve with our foreign aid budget?

And then there is the more obviously undeserving waste. The Daily Telegraph reported in December 2012 on the following:

* £800,000 out of the EU aid budget is being spent on a water park being built in Morocco by the French owners of Center Parcs
* Iceland has received £20 million from an EU fund subsidised by British aid. The funding is to prepare Iceland for EU membership - even though two-thirds of the country no longer wish to join
* a former Lancashire detective turned DfID consultant was given £223,683 for fighting corruption in Jamaica, one of eight consultants paid more than £100,000 for their work

But even when we focus on the alleged successes of our aid programme - which is now inextricably linked with that of the EU - the reality is less than impressive. As the Guardian reports:
European aid, in particular, has helped almost 14 million new pupils enrol in primary education and connected more than 70 million people to improved drinking water, since 2004, according to the European commission.

Which sounds good until you recall that the EU aid budget for this year is over £9bn, and it has been at a similar level for some time. If we assume total EU aid over the past decade to be in the region of £65bn (and that is a conservative estimate), this is equal to the combined GDP of the world's 34 poorest countries according to the EU's own index of GDP. Even worse, in many of these countries and those just above them on the GDP table, national wealth is actually falling rather than rising.

The problem is that while committing 0.7% of GNI to international aid makes anyone touched by the madness of government feel all warm and soft inside, it seems to escape their notice that much of that money is simply being poured down the plughole whilst making the lives of the poorest citizens of countries which receive aid worse rather than better. We should not make the mistake of thinking that these are isolated incidents either - you do not have to dig very deeply on the internet to find a wealth of information concerning misappropriated aid payments, such as:

"Global Fund to Fight AIDS, Tuberculosis and Malaria, an independent non-profit organization, suspended US$367 million in grants to Uganda in August 2005, after discovering that $45 million had been diverted to sham NGOs created by local politicians"

which is taken from the report "Killing them Softly: Has foreign aid to Rwanda and Uganda contributed to the humanitarian tragedy in the DRC?", written by a former aid worker with experience of both military and civilian humanitarian mission. One hardly needs to descend to the language of 'Bongo-Bongo' land to make the point that there is something seriously wrong.

Part of the problem is the extent to which the aid agencies have become an increasingly politicised industry. The Guardian quotes Oxfam as saying "that money should be redistributed from the UK's wealthiest population sectors to help alleviate suffering in the sodden flood plains. British bankers had received more than €70bn in bonuses since the onset of the financial crisis – far more than the UK's aid budget, according to a statement by the aid agency". Am I alone in wondering what the one has to do with the other outside of the pages of a Labour Party manifesto? Has Oxfam suddenly decided to run for office? We should not forget that Oxfam itself works in Rwanda, where its own publicity states that "60% of the population subsist on less than $1/day", and yet it is their disbursement of aid which helps to cement that in place. Oxfam states that it is assisting "by organising village sessions on such cross-cutting issues as...gender", a favourite topic - along with climate change - of the pro-Labour former Chief Executive. As head of Oxfam Lady Stocking earned £119,000 in 2012/13. The average salary in the banking industry according to Reed International is a more modest £48,000, while the average salary of a Rwandan Hutu is £120. Is Lady Stocking worth more than 1,000 Rwandans? You decide. It's not as if she has ever worked outside the public sector.

I won't pretend to know what the answer is to the foreign aid question. I think most people would agree that we are right to give it, but probably not in its current form, and that is without mentioning aid given to nations which have space programmes and aircraft carriers or are members of OPEC. That much of what we give is wasted, mis-spent, diverted to inappropriate uses or supplied with political strings attached is beyond question. If we are failing to help those most in need, then why has aid become such a sacred cow?


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