- Spare a thought this bleak new year for all those who
rely on charity. Open your hearts, for example, to a group of people who,
though they live in London, are in such desperate need of handouts that
last year they received £7.6m in foreign aid. The Adam Smith Institute,
the ultra-rightwing lobby group, now receives more money from Britain's
Department for International Development (DfID) than Liberia or Somalia,
two of the most desperate nations on Earth.
- Are the members of the Adam Smith Institute starving?
Hardly. They work in plush offices in Great Smith Street, just around the
corner from the Houses of Parliament. They hold lavish receptions and bring
in speakers from all over the world. Big business already contributes generously
to this good cause.
- It gets what it pays for. The institute's purpose is
to devise new means for corporations to grab the resources that belong
to the public realm. Its president, Madsen Pirie, claims to have invented
the word privatisation. His was the organisation that persuaded the Conservative
government to sell off the railways, deregulate the buses, introduce the
poll tax, cut the top rates of income tax, outsource local government services
and start to part-privatise the national health service and the education
system. "We propose things," Pirie once boasted, "which
people regard as being on the edge of lunacy. The next thing you know,
they're on the edge of policy." In this spirit, his institute now
calls for the privatisation of social security, the dismantling of the
NHS and a shift from public to private education. It opposes government
spending on everything, in other words, except the Adam Smith Institute.
- So what on earth is going on? Why are swivel-eyed ideologues
in London a more deserving cause than starving refugees in Somalia? To
understand what is happening, we must first revise our conception of what
foreign aid is for.
- Aid has always been an instrument of foreign policy.
During the cold war, it was used to buy the loyalties of states that might
otherwise have crossed to the other side. Even today, the countries that
receive the most money tend to be those that are of greatest strategic
use to the donor nation, which is why the US gives more to Israel than
it does to sub-Saharan Africa.
- But foreign policy is also driven by commerce, and in
particular by the needs of domestic exporters. Aid goes to countries that
can buy our manufacturers' products. Sometimes it doesn't go to countries
at all, but straight to the manufacturers. A US government website boasts
that "the principal beneficiary of America's foreign assistance programs
has always been the United States. Close to 80% of the US Agency for International
Development's contracts and grants go directly to American firms."
- A doctor working in Gondar hospital in Ethiopia wrote
to me recently to spell out what this means. The hospital has none of the
basic textbooks on tropical diseases it needs. But it does have 21 copies
of an 800-page volume called Aesthetic Facial Surgery and 24 volumes of
a book called Opthalmic Pathology. There is no opthalmic pathologist in
training in Ethiopia. The poorest nation on Earth, unsurprisingly, has
no aesthetic plastic surgeons. The US had spent $2m on medical textbooks
that American publishers hadn't been able to sell at home, called them
aid and dumped them in Ethiopia.
- In Britain the Labour government claims to have abandoned
such practices, though only because they infringe European rules on competition.
But now it has found a far more effective means of helping the rich while
pretending to help the poor. It is spending its money on projects that
hand public goods to corporations.
- It is now giving, for example, £342m to the Indian
state of Andhra Pradesh. This is a staggering amount of money, 15 times
what it spent last year on the famine in Ethiopia. Why is Andhra Pradesh
so lucky? Because its chief minister, or "chief executive" as
he now likes to be known, is doing to his state what Pinochet did to Chile:
handing everything that isn't nailed down, and quite a lot that is, to
big business. Most of the money DfID is giving him is being used to "restructure"
and "reform" the state and its utilities.
- His programme will dispossess 20 million people from
the land and contribute massively to poverty. DfID's own report on the
biggest of the schemes it is funding in the state reveals that it suffers
from "major failings", has "negative consequences on food
security" and does "nothing about providing alternative income
for those displaced". But it permits Andhra Pradesh to become a laboratory
for the kind of mass privatisation the department is seeking to encourage
all over the world.
- In Zambia, DfID is spending just £700,000 on improving
nutrition, but £56m on privatising the copper mines. In Ghana, the
department made its aid payments for upgrading the water system conditional
on partial privatisation. Foreign aid from Britain now means giving to
the rich the resources that keep the poor alive.
- So there are rich pickings for organisations like the
Adam Smith Institute. It is being hired by DfID as a consultancy, telling
countries like South Africa how to flog off the family silver. It is hard
to see how this helps the poor. The South African government's preparations
for privatisation, according to a study by the Municipal Services Project,
led to almost 10 million people having their water cut off, 10 million
people having their electricity cut off, and over 2 million people being
evicted from their homes for non-payment of bills.
- What we see here, in other words, is a revival of an
ancient British charitable tradition. During the Irish potato famine, the
British government made famine relief available to the starving, but only
if they agreed to lose their tenancies on the land. The 1847 Poor Law Extension
Act cleared Ireland for the landlords. Today, the British government is
helping the corporations to seize not only the land from the poor, but
also the water, the utilities, the mines, the schools, the health services
and anything else they might find profitable. And you and I are paying
- All this was pioneered by the sainted Clare Short. Short's
trick was to retain her radical credentials by publicly criticising the
work of other departments, while retaining her job by pursuing in her own
department policies that were far more vicious and destructive than those
she attacked. Blair's trick was to keep her there, to assure old Labour
voters that they still had a voice in government, while ensuring that Short
did precisely what his corporate backers wanted.
- I never thought I would hear myself saying this, and
I recognise that in doing so I may be handing ammunition to the rightwing
lobby groups campaigning for a reduction in government spending, such as,
for example, the Adam Smith Institute. But if this is what foreign aid
amounts to, it seems to me that there is too much of it, rather than too
little. Britain's Department for International Development is beginning
to do more harm than good.
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