Corrupt, ineffective and hypocritical: Britain should give less aid, not more

It is hard to take seriously South Africa's outrage over Britain's withdrawal of aid

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When Jacob Zuma, the president of South Africa, decided to give his family house in Nkandla a makeover, he did so in his usual flamboyant style. There were several underground rooms carved out for him and his four wives, along with the latest medical facilities, lovely playgrounds for their children and, of course, a helipad as befitting the leader of one of the world’s most important countries.

All very nice. The cost came to more than £16m, with taxpayers picking up almost all the bill. Needless to say, this caused an outcry – not least since the president has spoken passionately of his inability to sleep peacefully knowing that there are people still living in shacks in his wealthy nation. Such poverty must be painfully apparent when travelling home by road rather than helicopter, since Nkandla sits in a rural backwater where nearly half the people are unemployed.

So it is hard to take seriously the synthetic outrage in South Africa over Britain’s decision to cut aid worth £19m a year. For all the grinding hardship, our aid is peanuts for one of the world’s 30 biggest economies – just as local politicians admitted it was in India, which faces the aid axe. South Africa is an upper-middle-income nation sitting on spectacular mineral wealth, where some people with good political connections have accumulated immense wealth at great speed, including members of Zuma’s family.

The real issue in both South Africa and India, as in many other places, is inequality and how to share the spoils of success. For, unlike in the past, poor people no longer live in poor places. The economist Andy Sumner has revealed that while two decades ago more than nine in 10 of the world’s poorest people lived in poor countries, today three-quarters live in middle-income countries.

In such a fast-changing world, the West’s patronising aid policies look more absurd and anachronistic by the day. It is not just that so much money is poured into vainglorious projects, ends up in the pockets of repressive regimes, fosters corruption that scars civil society, and fuels conflict that worsens poverty. Nor is it even the disastrous legacy of always presenting developing countries as inadequates in need of our salvation, ensuring that Africa, in particular, has such a negative image it deters business people and tourists.

It is also the rank hypocrisy. We dictate to developing countries on democracy as our own electorates grow increasingly disenchanted, we lecture on corruption while presiding over tax havens and our bankers stash stolen loot, and we tell them how to run tax systems when we seem incapable of forcing rich individuals and companies to cough up their fair shares. And just imagine how we would feel if scores of rich young Africans came here and told us how to run our schools and hospitals? Not that most could get in, of course, given our hostile visa systems.

Perhaps such hypocrisy is unsurprising when the cheerleaders for aid are people such as Bill Gates, who made his fortune from a company that practises huge tax avoidance, and Bob Geldof, a wealthy non-domicile whose homes were found to be registered overseas. Yet these people harry struggling taxpayers to hand over money for their pet cause, aided and abetted by a self-interested aid industry that has grown fat on public funds. Ever wondered why some major charities are so sycophantic to politicians and so scared of tackling contentious issues such as drug illegality and immigration despite their obvious impact on poverty?

Imagine how we would feel if scores of rich young Africans came here and told us how to run our schools and hospitals?

More than any other Western nation, this country finds itself in a contorted position over its aid obsession. The Coalition, determined to prove its compassion by spending other people’s borrowed money, has ensured that Britain hits the discredited target of handing over 0.7 per cent of national income – unlike many rivals. So a government committed to austerity at home pumps ever-greater sums into flawed projects overseas, with the Department for International Development’s ring-fenced budget soaring 50 per cent over the course of the Coalition, to the increasing annoyance of the electorate.

This gives rise to another layer of hypocrisy. For as ministers attack welfare dependency at home they encourage it abroad. Even many in the aid lobby admit this swelling cascade of cash makes recipient nations less likely to deliver decent public services when they can just hold out their hand to wealthy donors for funds. Few doubt it distorts local priorities.

Research indicates that the more foreign aid spent on health, the less the recipient spends – while nearly two-thirds of health spending in Africa was found to be diverted for other uses. One new study just found the biggest improvements in infant survival in Malawi in areas that received less or no aid; meanwhile, Sierra Leone has just indicted its 29 top health officials after funds went astray, despite this being the world’s third most dangerous place to give birth.

The impetus is to shovel all the cash out the door, with little focus on success

As our ministers are told to prepare for more cuts, hard-pressed departments are trying desperately to get their hands on that alluring aid money. The Prime Minister has already indicated that some can be diverted towards peacekeeping. Now it has emerged that the Ministry of Defence wants to take millions for military patrols and body armour for troops; officials are reported to have even wondered if the cause of international development could be stretched to cover the cost of a new aircraft carrier. It is beyond satire.

Yet this highlights another key problem: the prioritising of spending over outcomes. The impetus is to shovel all the cash out the door, with little focus on success, let alone concern over corruption or waste. No one at DfId gets plaudits for highlighting ways to save money; little wonder  that the department refuses to release its inquiry into spending on £1,000-a-day consultants. And the more aid that pours into countries, the more their rich and middle-classes benefit rather than the poor, exacerbating inequality.

Maybe Lord Lipsey, the Labour peer, was right when he said in parliament recently that opponents of aid should support these profligate policies since they will so discredit the cause that “no government would dare spend poor taxpayers’ money on that scale again.” We can live in hope, if only for the sake of the world’s most impoverished people.

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