I attach a great deal of importance to international development aid. After all, I was for two years the minister responsible for it, but I have never been uncritical of it. It is precisely because I attach such importance to it, that I am horrified when any of it is wasted.
When aid is wasted the damage is twofold: First in the ‘opportunity cost’ of the good use that it might otherwise have been put to; second because that waste, magnified by the press, undermines the whole case for such aid in the eyes of the public.
Last week I saw press coverage criticising the fact that some of our aid was being used to support the Chinese film industry. Without having to read further, I knew the culprit: the ‘Prosperity Fund’.
This fund was set up by George Osborne when he was Chancellor and was given £1.5 billion to be disbursed over a five year period. I was one of the joint chairmen of the fund along with Greg Hands, Chief Secretary to the Treasury, and Lord Price the Trade Minister. Its purpose was to use development aid to open up markets, from which there might subsequently arise opportunities to be exploited by UK enterprises.
(The language had to be pretty tight because the expenditure remained governed by the International Development Act 2002 which requires that it be spent for the purpose of eradicating poverty.)
The other members of the board were ministers from spending departments across Whitehall. It was part of a strategy to reduce the proportion of development aid disbursed by the Department of International Development to only 75% of the total, and to divide the rest between Whitehall departments whose budgets were otherwise being severely cut.
Although I ‘read the riot act’ to the board, pointing out the narrow definition of what can count as official development aid, and that government policy was not to tie aid to trade, and that all expenditure must be in accordance with the very limited provisions of the 2002 Act, and that departments would bear full responsibility for any projects that they sponsored, nevertheless I knew that I was watching a car crash in slow motion.
It was obvious to me that the sorts of markets that were going to generate subsequent opportunities for trade, were not going to be in the world’s most fragile, disordered, misgoverned, and poorest states; the sort of states that are in desperate need of jobs; the states that generate waves of migrants; the states that breed terrorism and grievance. These are the states where we need to deploy our aid, in our own national interest, in order that we can prosper in a more stable and peaceful world.
Rather, the targets of the fund, given its objectives, were bound to be in countries, though still qualifying for aid under international rules, were no longer what we would consider ‘poor’. It was in the rapidly developing economies of China, India, and Brazil that the fund’s opportunities would be found. And so it has proved.
After years of denying to outraged constituents that we were giving aid to China, now apparently we are.
A spectacular own goal.