Dfid in Pakistan: Trade not aid?

Written by Total Politics has a free weekly Friday email bulletin. Follow this link to register. on 15 January 2013 in News
Today a select committee is meeting to discuss Dfid's budget in Pakistan. The department's overall budget is increasing year on year, but its results don't always follow suit. So what's the solution?

Today the international development committee is sitting to discuss the successes and failures of the foreign aid programme in Pakistan. The Islamic Republic, ranked poorly at 139th out of 174 countries in the Corruption Perceptions Index of 2012, is expected to receive over £400 million pounds yearly from the British coffers by 2015.

Dfid has announced that foreign aid as a whole is to be maintained at 0.7% of the UK’s Gross National Income, taking on board anticipated inflation, that figure is expected to be £10.5bn in 2014-2015. Per capita spending equates to an estimated £137 for British citizens on the cause, however, an earner of £18,000 would pay only £30 towards international aid.

David Cameron labels – somewhat ironically due to his domestic austerity model – Britain’s international aid donation as a “moral obligation.” However noble the means are of the Prime Minister, policy decisions – especially those regarding to expenditure – should be based on evidence and meticulous analysis; this is why the foreign aid programme needs reform.

Therefore, the question for the committee today is: Does foreign aid actually work?

Dfid’s budget is not spent wisely, Clare Short told us all about that, alongside all of her criticisms of the EU’s ‘worst development agency in the world’ chatter – of which Dfid donates a third of its budget. But more recently we heard about how Bangladesh was spending its allocated amount on a television programme, about how India received money from the UK for years whilst it had its own foreign support department, and about how £11 million of the British international assistance budget went “missing” in Uganda due to corruption and embezzlement.

Dfid’s uphill fight on vice is not gaining any momentum either: the Asia Foundation described the fight against corruption in Afghanistan as “ineffective”. “There are multiple agencies with ill-defined roles and limited independence. Afghan agencies such as the Ministry of Justice and the police force have a history of reported corruption,” they added. Can we really say that this is a productive method to reduce world poverty?

Probably not; so what is the answer? Immediately I think: Dfid’s programme is not fit for purpose, it has become wasteful and inefficient. Perhaps the answer is to remove it? But after a brief pause and a moment’s thought, this instant gesture of mine seems like a step too far; and whilst those factors of inefficiency and waste remain true, beheading the foreign aid budget immediately would create a hydra-like problem, where one problem is removed, more appear in its place.

One of those obstacles is our relationship with the EU: the UK faces trade restrictions with the developing world because of European sovereignty on its negotiation power. In order for the UK to pursue a free-market approach – which would remove the possibility of corruption with taxpayer’s money -- Britain would need to reform its member status with the EU to negotiate its own trade agreements. This would create trade and jobs – set on our own terms – in the developing world which would be beneficial for our own economy; it is no longer a hand out.  

If that reform in Europe did not take place, and Dfid’s budget were to be cut, Pakistan, among others, might stagger under the newly-founded economic heat. It would be an untenable move from the UK, no matter how much of the foreign aid budget is lost through corruption and fraud, and more importantly, the economic repercussions would be felt at home – but that does not mean the budget justifies an increase until European jurisdiction is negotiated.

The ideal answer for the committee to arrive at would be to encourage developing countries to source independence away from foreign donators, whilst simultaneously our government should ignite gradual cuts towards Dfid over a long-term approach, and for there to be some progress on reform within Europe to reclaim sovereignty of Britain’s trade portfolio. But, that is much to ask of one sitting. 

Tags: Aid, Dfid, Pakistan, Politics

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