Artillery Row

British self-interested aid

Is it wrong that donor countries should also benefit from their development aid projects?

The news in mid-June that the Department for International Development (DFID) and the Foreign and Commonwealth Office (FCO) are to merge was met with howls of derision from the left. Oxfam claimed the merger would directly result in the deaths of poor people in some of the world’s humanitarian hot spots, whilst others said the move would return the UK’s aid programme to the sort of corporate corruption seen in the Pergau Dam scandal in the early 1990s.

As usual, loud cries against strategically sensible changes are driven by vested interests rather than evidence – and the aid sector has its fair share of vested interests like any other.

The ethos and structure of the new Foreign, Commonwealth, and Development Office (FCDO), which will launch on 2 September, has been starting to emerge over the past few weeks. In a job ad for independent board members of the new department – in itself a structural adjustment which brings an element of private sector governance style – the following statement was issued:

The mission of the FCDO is to build shared global prosperity, eradicate poverty, tackle climate change, strengthen the international rule of law and global security, and promote free, open societies, all of which is within our enlightened self-interest.

Just as the 1662 Book of Common Prayer attempted to merge Catholic and Protestant ideas during the celebration of the Eucharist, so the FCDO is bringing together the best of DFID and the FCO: there isn’t much not to like about prosperity, poverty eradication, environmentalism, international security, and global freedom. Perhaps after the self-interest of the Oversees Development Administration in the 1980s and 90s, and then the inefficient altruism of Blair’s DFID, is Britain finally finding a via media when it comes to its international role in the twenty-first century?

I for one would hope so, and if the “dual mandate” of the FCDO is upheld in the way it implements aid programmes, there should be a place for every type of organisation in its supply chain, whether for-profit or non-profit.

In the worldview of leading non-profits, there is no place for business in poverty eradication

There is already positive evidence that this will be the case. Last week saw the launch by DFID of the “Vulnerable Supply Chains Facility”, a new £6.8m programme designed to partner with British multinationals such as Tesco and Primark to help support some of the poorest farmers and garment workers in Africa and South Asia through the Cobid-19 pandemic. The hybrid nature of the programme seems to truly combine the strengths of both the aid sector and the private sector to target poverty eradication: both DFID and the multinationals are contributing money, funds are largely flowing through non-profit partners with significant expertise in working with the most vulnerable on the ground, and the scale of big business is being harnessed by DFID to reach hundreds of thousands of poor people within their supply chains, over whom they can have positive influence.

Whilst the call for proposals for the programme in April this year did not explicitly limit partners to British firms, the DFID press release on 14 August cast the programme as DFID helping the UK high street – in line with the FCDO’s dual mandate, but which again was met with howls of derision from the left. The Guardian predictably led with the headline “DFID scheme accused of ‘putting UK aid in pockets of wealthy companies’”.

That claim is untrue, and also reveals that in the angry worldview of leading non-profits, there is no place for business in poverty eradication. This is of course despite business being the engine that generates the funding that these organisations have enjoyed for years, as well as directly paying millions more poor people across the world every day than do the NGOs. Given these two facts – is not the FCDO’s harnessing this power a positive move?

Another FCDO programme in the offing – called the “Growth Gateway” – finally appears to be an attempt to bring together the multiple arms of the UK’s overseas spending in Africa for the dual mandate of poverty eradication and self-interest. The programme is set to be a single advisory unit through which all of the UK’s private sector development aid, development finance, export finance, and trade promotion for Africa will be channelled.

This work is currently split between DFID, the FCO, CDC, UK Export Finance, and the Department for International Trade (DIT). If you think that’s confusing, think how confusing it is for a Nairobi tech start-up or Ghanaian cocoa farm to find out how to get British investment or link to British business partners. I can tell you it is much easier for them to find Dutch, Indian, or Chinese money, countries which have none of the historic links to African countries which the UK does.

The non-profit world would rather retain their position at the top of the hand-out chain

The Growth Gateway will hopefully provide a single point of contact for all such players, with the ability to link them up to the correct bit of the UK Government machine for their needs – and in turn ensure that the most appropriate instruments that the UK has at its disposal (whether grant aid channelled through non-profits or red-blooded investment through the private sector) are deployed. This will perhaps allow a shift in the relationship between Britain and many African countries from one of aid-donor and aid-recipient to that of business partners. Such a shift would be fairer, more equal, and less arrogantly neo-colonial, but one which is again likely to be resisted by the vested interests of the non-profit world which would rather retain their powerful role at the top of the hand-out chain.

The missing part of the FCDO puzzle seems to be trade promotion. DIT is being left as a separate department, even though bringing it within the single fold would be the logical thing to do if the aim is truly to combine the UK’s altruism and self-interest abroad. Programmes like the Growth Gateway may be a step in the right direction, but they will ultimately only sign-post external parties to a number of still fragmented UK Government units.

To fully realise the dual mandate, both the Vulnerable Supply Chains Facility and the Growth Gateway should work closely with DIT to ensure maximum UK business opportunity to take part in Britain’s poverty reduction activities. If Kenyan farms are being supported with UK aid to continue hiring and protecting workers through the pandemic, then we should ensure these said farms are selling into Tesco and Sainsbury’s. If a Nigerian start-up has received UK seed funding from DFID, we should be making sure that the next stage of significant private investment they receive comes from the City of London.

Britain’s corporates have the ability to hire, invest in, and support millions of poor people globally.  The good news is that the FCDO looks like it will focus on enabling this – even if The Guardian doesn’t think it should.

Enjoying The Critic online? It's even better in print

Try five issues of Britain’s newest magazine for £10

Critic magazine cover