‘One World Conservatism’: international development policy from the Conservative Party

The Conservative Party here in the UK have been unveiling their proposed policies on international development, should they (as widely expected) win the next general election, expected in May. Having admirably promised to ‘ring fence‘ international development spending, their green paper states that:

Any future government will have to take tough decisions to balance the books – and that means cutting back the rate of growth of government spending. The Conservative Party has made the bold pledge, even in the context of this fiscal squeeze, to increase the level of British aid. We have done so, above all, because it is morally right to do so. Cutbacks must not cost lives.

However, they also propose to:

establish a new MyAid fund, worth £40 million in its first year. Every taxpayer will be able to log on to the MyAid website and view details of ten ongoing DFID-funded aid programmes, and vote for which one they think should receive the extra money. The options will include programmes run directly by DFID, as well as those run by respected NGOs. The Fund will then be distributed between the ten programmes in proportion to how many votes they receive. For example, if 25 per cent of people vote for the DFID programme in Malawi, that programme would receive 25 per cent of the Fund – £10 million. Everyone who votes will be kept up to date with regular email updates about the progress of ‘their’ project.

(H/T Brian Barder.) Now I like to think of myself as a democrat. I also like to think that by and large, on broad moral issues, the people as whole know best. But international development is a much, much more complicated field than many people think. With the greatest of respect to the British citizen, if the average person in the street was able to competently evaluate development projects, then why is it that the development industry continues to be plagued by horror stories of projects gone wrong, even as the expertise of aid workers is ever increasing? The truth is that workable aid projects are really really hard to do well. A vox pop/Big Brother approach is not the way to go about it.

The Overseas Development Institute concluded that ‘there are as many questions here as answers’. This is to be expected of a green paper. Yet:

the devil lies in the detail and there is much in the chapter on value for money, and indeed in the whole report, that raises further questions. On how aid is spent, for example, it is not clear what the criteria will be for allocating aid by country if, as the Green Paper states, the 108 countries in which DFID works at present  is too many (even though 90% of current spending is concentrated in 23 countries).

Duncan Green adds that the Tories ‘love NGOs. Get ready for weird lobby meetings in which NGOs are arguing for channelling funding for essential services via the state, rather than via NGOs’. Yet the Conservatives’ free market preferences haven’t gone down well with charities, particularly when it comes to their proposals on aid vouchers. The vouchers:

would be redeemable for development services of any kind with a supplier of their choice. Such an innovation would help demonstrate what poor people really want – and who they perceive to be most effective in meeting their needs. Clearly, this will only work where there is a genuine choice between different service providers, and is not a substitute for comprehensive efforts to strengthen the capacity of national governments to guarantee access to essential services for their people. We will also examine carefully the case for using a more limited type of voucher in certain emergency situations, where providing people with aid vouchers rather than food would enable them to access products through local markets, rather than shipping in imports and putting local providers out of business.

In response, an Oxfam spokesman emphasised the impotence of vouchers where basic services do not exist, arguing that ‘what is needed is aid money invested in helping poor countries build and maintain free public health and education systems.’ Kevin Watkins was more outspoken, arguing that a voucher system would be ‘using vulnerable people to advance an ideologically loaded, market-based vision for education, which would exclude millions of kids from school. It completely overlooks the achievements of publicly financed, publicly provided education in countries such as Ethiopia and Tanzania. Watkins is right to call out the Conservatives on what they claim is a ‘non-ideological approach’ to aid delivery. There is no such thing.

New DFID white paper

On 6 July, DFID published its new White Paper , promising to:

Maintain our commitment to people in poverty

Work to make sure every pound of UK aid is spent well

Work for sustained, fair and green growth

Help make people safe and secure

Increase our investment in international organisations and continue to lead reforms with real impact

Commit to helping vulnerable countries adapt to climate change and develop in a low carbon way

Reinforce our partnerships with charities, faith groups, trade unions, businesses and others

Meet our aid target of 0.7% of UK income by 2013

So far, so pedestrian. It looks like the white paper is essentially advocating a pretty straightforward continuation of current policy. More superficially, as predicted, British aid efforts have been rebranded as ‘UKaid’, in a similar manner to the American USAID programme.

However, the ODI are concerned, as am I, that DFID is neglecting trade. As Oxfam have famously argued, ‘if Africa, East Asia, South Asia, and Latin America were each to increase their share of world exports by one per cent, the resulting gains in income would lift 128 million people out of poverty.’ Pascal Lamy, writing in the Wall Street Journal, predictably agrees that ‘developing countries need trade’. Expect yet another update on Doha progress in relation to the Obama administration shortly.

Leopards and spots

Marc Weisbrot of the Center for Economic and Policy Research has written an op-ed on the IMF’s increased funding and possibilities of reform. At the core of his argument is the belief that the Fund simply hasn’t changed since the bad old days so excoriated by the likes of Stiglitz and Sachs:

in spite of the depth of the world recession, the Fund is too willing to sacrifice employment, and increase poverty, in pursuit of other goals. A country can always reduce a trade deficit by shrinking its economy, since that causes households and businesses to import less. The main purpose of IMF lending in the current crisis should be to enable low- and middle-income countries to do more of what the rich countries are doing: adopt stimulus packages that counter the downturn.

It’s not often that an article comes along with that you can agree with without reservation or qualification, but I think that this might be one of them. In the meantime, The Economist worries that all the attention the IMF is getting runs the risk of sidelining the World Bank. Over at the Bank, Shanta Devarajan insists that ‘even though it is the least integrated with the global economy, Africa may be the worst hit region by the global economic crisis’, due to falling private capital investment inflows, falling remittances, falling commodity prices and falling foreign aid. Owen Barder addresses this last point when he notes that while Wednesday’s Budget didn’t cut aid, it didn’t raise it either. Duncan Green is right to suggest that with Britain’s fiscal condition the way it is, this demonstrates the Prime Minister’s genuine (and somewhat exceptional) commitment to international development.

Across the pond, Simon Johnson argues that the current financial crisis is a similar one to those that plagued middle-income countries in the 1990s:

In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. Just as in emerging-market crises, the weakness in the [U.S.] banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

It’s been widely observed that the US (and other western countries) are now engaging in the very economic recovery strategies denied to the likes of Argentina, Malaysia, Thailand and South Korea. (See Marc Weisbrot’s article for more on this – even now, El Salvador’s agreement with the IMF prevents it from using expansionary fiscal policy.) But for Johnson the financial sector has learnt little from the crisis:

there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive.

Plus ça change, plus c’est la même chose.

IMF’s latest World Economic Outlook

The IMF’s latest biannual World Economic Outlook has been (partially) published online. (Hat tip: Paul Mason.) As far as recovery goes, the Fund finds that:

expansionary fiscal policy seems particularly effective in shortening recessions associated with financial crises and boosting recoveries. However, its effectiveness is a decreasing function of the level of public debt.

That is to say, the more indebted the country, the less powerful Keynesian stimuli are likely to be. According to the IMF, the massive debts now held by leading economies mean that ‘the current recession is likely to be unusually long and severe and the recovery sluggish.’  For the record, the UK’s government debt is now 49% of GDP. Both historically and comparatively, this is huge.

The New York Times has been talking in quasi-serious tones about Britain seeking an IMF loan, alongside countries such as Ukraine,  Berlarus, Serbia, El Salvador and Armenia.

Wednesday is Budget Day.

The G20, Gordon Brown and time management

According to The Times’ Red Box blog, the Prime Minister will have a total of 4 hours and 35 minutes (aside from all the mealtimes) to spend on rectifying the global financial crisis and reforming the world’s economic architecture when the G20 summit takes place a week today. Gulp. It sort of reminds me of that line about doing six impossible things before breakfast…

Of course, much has been decided already, but if that’s the case, you’ve got to wonder whether a publicity stunt is worth all the cost, especially as policing alone is expected to cost £7.2 million.

Speaking of the British government and cost, I feel compelled to share this, from The Spectator:

To comprehend the scale of the sickening task awaiting George Osborne if he becomes chancellor, consider the following. If he were to raise VAT to 25 per cent, double corporation tax, close the Foreign Office, cancel all international aid, disband the army and the police, release all prisoners, close every school and abolish unemployment benefit he would still be unable to close the gulf between what the UK government spends and what it raises in taxes.

Double gulp.

Activism, the internet age and the perils of simplification

I’ve just finished watching this video from the World Development Movement:

Is it me or is does the sketch simplify to the point of becoming patronising? I know that NGOs have to appeal to a time-pressured public with short attention spans, but I can’t honestly see how the video isn’t insulting to the intelligence of the average person. If you wanted to introduce the issue to children, I could respect that, but this is meant for the general population. I know it’s not meant to be taken too seriously, but there’s surely a point at which NGOs like the WDM need to engage with the public at a more substantive level.

One of my lecturers is working on a research project on the Make Poverty History campaign and I find myself having to agree with him that there comes a point at which appealing to quick campaign actions like petitions and text messages (not to mention wristbands) comes at the expense of building a more committed support base. On its dissolution, the flash-in-the-pan activism of Make Poverty History failed to translate into more concrete and permanent groupings. Organisations like WDM need to learn that it’s not enough to put out simplistic videos like this one (let’s not forget that excessive simplicity is a form of deception) and then ask people to send off a quick email to the EU. NGOs have to work on fostering really committed grassroots campaigners, people who are willing to properly educate themselves on the issues, rather than base their activism on easy stories like the one above.

Since I’m having a little bit of a rant about activists, I’ll include this clip too, just because it amuses my silly side. The crucial point is 41 seconds in.

The summer of rage?

Apparently, a ’summer of rage’ is being predicted for the UK. Mass protests are expected. The combination of the G20 summit and the likelihood of more ‘wildcat’ industrial strikes, as well as general anger at the financial industry as a whole seems to be causing concern at the highest levels. According to The Guardian:

Britain’s most senior police officer with responsibility for public order raised the spectre of a return of the riots of the 1980s, with people who have lost their jobs, homes or savings becoming “footsoldiers” in a wave of potentially violent mass protests.

Apparently, ‘known activists’ are mobilising. Of course, it is well known that civil strife (as well as crime) is more common in summertime. That said, my gut instinct is that all this is being exaggerated a bit. Mark Easton’s talk of attempts to ‘destroy capitalism’ is overblown. Naturally, there will always be an active minority trying to do just that. It takes a lot to get the British to protest at all; only the Iraq War has seen real public mobilisation in recent years. I can see middle England letting off some steam about the economy, but calling for the end of capitalism itself? Things haven’t got so bad as to provoke the English to advocate revolution. Of course, if the summer should also see some allied political controversy emerge, that would be an explosive combination. It’s times like that can see governments fall. Either way, interesting times.

(Hat tip: my mother.) Photo by Roger Lancefield, via Flickr (Creative Commons).

P.S. The above notwithstanding, I’ve noticed that I’m also getting a few hits via searches for ‘economic collapse martial law’. A little disturbing…

EDIT: The Prospect blog is reporting on a Prospect/YouGov poll that suggests that ‘37 per cent… of people across Britain thinking unrest is certain or likely this year’.

Representation at the London Summit

Some of you will have read my previous post on One’s campaign to ensure African representation at the G20 meeting in April. Well, mission successful. In the end, Downing Street acted before the petition could be delivered, so it was converted into a thank you note! According to the One blog, ‘32,319 ONE members around the world, including 1,104 in the UK, signed that thank you message.’

The London Summit’s official website reports that invitations have been sent to ‘the Chair of The New Partnership for Africa’s Development (NEPAD), the Chair of the Association of South East Asian Nations (ASEAN) and the President of the EU Commission are also invited. The Chairman of the African Union Commission will also attend.’

There’s also an interesting interview on the site with Lord Malloch-Brown, Foreign Office Minister for Africa, Asia and the United Nations (a suspiciously large portfolio?). One thing that strikes me is how comfortable he seems with articulating the desires and interests of Africa. Speaking on behalf of an entire continent seems to come a little too easily to the minister.

Labour and the ‘New Protectionism’?

Apologies for the hiatus. What’s been going in since I last posted? British readers will not have failed to notice the so-called wildcat strikes in protest at the hiring of foreign labour in preference to British workers.

The strikes were almost immediately co-opted by the British National Party, with BNP vans parked next to strikers. The British Wildcats website would also seem to be a front. All of this brings up a lot of questions about protectionism. Indeed, labour is the last great frontier of globalisation-as-liberalisation. Goods can be traded (relatively) freely, as can money. Yet restrictions on the movement of labour are everywhere. I’m not saying whether this is a good or a bad thing. Obviously there’s a happy medium. See chief trade unionist Brendan Barber’s article in The Guardian.

Moving away from labour per se, the FT has a special in depth section on what it’s calling ‘the new protectionism’. As I have said before, self-fulfilling prophecies should be our biggest concern. On that note British cabinet member Ed Balls has said that the current recession is to be the worst in a century.