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International Undevelopment

Under the Tories, Britain's approach to international aid and development has become wedded to market ideology - encouraging some of the world's poorest countries to pursue waves of privatisation.

It appears that the UK’s Department for International Development (DfID) will continue to exist as a separate government department. It was widely expected that DfID would become subsumed under the Foreign and Commonwealth Office as part of a significant restructuring of Whitehall. That DfID has escaped the axe (in the short-term at least) is to be welcomed. But this decision should not obscure the British government’s considerable failings in relation to international development. 

Many non-governmental organisations had argued that the government would be closing a well-performing government department. This is highly debatable. DfID certainly does plenty of good work to reduce global poverty. However, since 2010, it has been severely tainted by an ideological drive to promote the privatisation of education and healthcare overseas, despite a lack of evidence that such an approach works for the world’s poorest and most marginalised people. 

Last year’s In Whose Interest? report by Global Justice Now found that Britain’s development aid was “supporting privatisation through grants to education businesses, support for pro-private research, and consultancy contracts with UK-based businesses, among other methods.” Similarly, a 2016 report by the union Unison found that the DfID was promoting public-private partnerships in healthcare, using development aid to invest in fee-paying hospitals and “encouraging governments to hand over their health budgets to multinational healthcare companies.”

There are other, more technical, problems with how DfID works. The organisation has, for the most part, adopted a short-term approach to achieving results rather than accepting the reality that international development often requires careful experimentation and learning over a longer horizon. In spite of criticism from both the Independent Commission on Aid Impact and civil society, DfID’s thinking on when and how countries transition away from receiving aid also remains weak.  

It should also be noted that large amounts of aid money are already spent by other departments – DfID provided only 75% of UK aid in 2018. Overall, DfID’s share of UK aid has declined over the past five years. Yet research has shown that this non-DfID aid expenditure tends to be less focused on poverty, less transparent and less effective. 

Moreover, the UK’s lack of policy coherence is staggering. The DfID supports poor countries to improve their tax revenue collection capabilities while the Treasury is unwilling to crack down on the UK’s major network of tax havens. Similarly, it provides humanitarian relief to Yemen while the Department for International Trade has licensed billions of pounds worth of arms to the Saudi-led coalition that has been accused of war crimes.

There is no reason to believe that any of this will change just because plans to fold DfID into the FCO have been abandoned. All indications are that the UK’s international development agenda is to become even more subservient to the government’s trade and security goals. Boris Johnson admitted to such an intention a year ago, saying “… it is perfectly possible to boost global development in a way that coheres much better with UK political and indeed commercial objectives.”   

What does this mean in practice? The traditional purpose of aid – to alleviate humanitarian suffering and reduce global poverty – will be further eroded. Expect the British government to resume its push for the international definition of aid to be broadened. If successful, the pressure to reduce aid may diminish. However, although the quantity of aid matters, the quality of aid is more important.

Regardless of any changes to international rules on how aid is defined, the government will likely look to expand the type of investments made by the controversial Commonwealth Development Corporation (CDC). CDC, DfID’s private equity arm, has been criticised for focusing on its rate of return rather than its impact on poverty, as well as for its use of tax havens and complicity in human rights abuses.

More importantly, broader development issues will surely suffer as the British government relentlessly pursues its (narrowly conceived) self-interest above all else. For example, post-Brexit trade deals will likely push poor countries to liberalise sectors that are ill-prepared for foreign competition. Through the UK’s Prosperity Fund, which officially seeks to promote British business at the same time as alleviating poverty (even though the Fund’s theory of change does not mention poverty reduction), the ground for an aggressive free trade campaign has already been laid. The Prosperity Fund has also financed 16 fossil fuel projects around the world, making a mockery of the UK’s commitments to tackle climate change.

Furthermore, it is difficult to see the UK paying greater attention to largely ignored yet critical development problems. For instance, Africa is in the grip of a new debt crisis. As 90% of publicly traded loans to African governments are made under UK law, the British government has a particular responsibility to ensure that such loans are transparent, lawful and unable to be exploited by vulture funds. This is hardly radical. Sadly, even small steps to make the financial sector more accountable are perceived as a threat.

Retaining DfID as an independent government department with its own cabinet minister is certainly preferable to the alternative. But let us not kid ourselves. The UK is not a genuine champion for international development as politicians from all major parties like to claim and many in civil society like to parrot. A truly ethical international development agenda is farther away than ever.