Overseas aid doesn’t work and we can’t afford it

  • 17 September, 2012
  • Politics

Open letter from Lord Ashcroft to Justine Greening MP

Dear Justine,

Congratulations on your new job. You will, without doubt, find the Department for International Development “Dfid” far more pleasant than your previous post in the Department of Transport. Yes, you will spend a lot of time in the air, giving you perhaps a fresh perspective on Britain’s aviation needs. But you get to travel the world like a medieval potentate, with politicians in the developing world keen to tap into your generosity. You will visit some of the world’s most wonderful nations and see some of the globe’s most stunning scenary. And you can spray around taxpayers’ money just like Tony Blair and Gordon Brown did in the days before the banking crisis.

The downside is you may not be very popular when you are in Britain. At a time when libraries are being closed and people with disabilities face benefit cuts, there is growing fury over giving away ever-increasing sums to foreigners. Despite the downturn, your department’s budget is the only one still soaring, set to grow 50% during the term of the Coalition from £7.8bn in 2010 to £11.5bn by 2015.

Many Conservatives are horrified by this. They think it morally wrong to carry on giving away such vast sums abroad – more than £300 per household – at a time of domestic spending cuts. Others argue it is politically insane to modernise by currying favour with Guardian type readers that looks out of touch in current circumstances. Recent surveys found a majority of Britons now favour a reduction in aid spending, while there is growing scepticism about the effectiveness of British aid programmes.

Certainly, our current policies are politically nonsensical. But I do not fully agree with the argument we should turn our backs on the world’s poorest people because of tough times at home. I have spent much of my life travelling in Africa, Asia and Latin America. I have been to 140 countries. I visited 24 countries with Andrew Mitchell when he was the shadow minister for DfiD. I have seen the grinding poverty that still exists in many places. If aid worked, I would endorse the government’s attempts to cosy up to St Bob and Bono. But I have always approached politics in the same way I approach business – relying on rigorous analysis of all available evidence. That is why I am urging you to do the same, since it is clear Britain’s approach to aid is flawed and self-defeating. So I urge you to recommend to the Prime Minister to turn off the golden taps and stop flooding the developing world with our money.

This will upset your department’s friends in the aid lobby, who will no doubt howl in protest about ‘Tory heartlessness’ since their incomes will suffer. Oxfam, for example, saw funding from Dfid rise from £18.8m to £27m last year. But for too long Dfid has acted like a non-governmental organisation itself rather than a wing of government. Indeed, I hate to say this to you but there is a strong case it should be folded back within the Foreign Office, as it was before 1997. That discussion can come later.

Under your predecessors Dfid developed unhealthily close relationships with the big aid charities and some of the major poverty barons. The Sunday Telegraph revealed this weekend an astonishing £500m is being paid to an army of consultants, some earning seven-figure incomes and many of whom used to work in Whitehall. This demonstrates how the department has so much money to give away it barely knows what to do with it. So it gives India, a country with its own aid agency and a space programme, £280m a year and the European Union £1.3bn annually. As The Daily Mail revealed earlier this year, this cash goes on improving the Turkish sewer system and implementing Icelandic food safety laws – not the sort of projects we hear about when politicians proclaim the wonders of aid.

Ministers like to say they get 100 pence of value for every £1 spent on aid, but even charities themselves admit only about 40% reaches people on the ground. Few dispute that mountains of money have been wasted over the years; more than £2bn of aid is thought to have been stolen in Afghanistan over the past five years alone. The Zambian economist Dambisa Moyo pointed out that half a trillion pounds went to Africa in Western aid over half a century – yet economists struggle to point to examples of nations that advanced because of aid.

In truth, all this aid from Britain and other Western nations undermines progress. As it is often said, you cannot build democracy on other people’s money. Aid corrodes civil society and encourages corruption and conflict. By doling out vast sums to often-dubious foreign regimes, we ensure they have less need to respond to their citizens’ needs. While we fund schools and hospitals, rulers can steal from state coffers or spend huge sums on arms, then win elections using bribery, coercion or violence. In Africa, a study revealed nearly two-thirds of health assistance is diverted to other purposes, while development expert Paul Collier found about 40% of the continent’s military spending was financed inadvertently by aid. In Afghanistan, experts found aid increases instability by fuelling tensions between villages.

Quite rightly, the government has attacked targets for distorting priorities. Unfortunately, it is so focused on the anachronistic and random target of giving away 0.7% of Britain’s income that it ignores the obvious failings of its policies. So even declared successes melt away under scrutiny.

To give one example, ministers like to brag how many millions of impoverished children go to school thanks to British aid. Yet when the Independent Commission for Aid Impact investigated the spending of more than £1bn in three east African countries, it found it was failing to improve basic literacy and maths skills. It was all about hitting targets and creating headlines rather than examining whether children were learning or teachers bothering to turn up. No wonder Giles Bolton, Dfid’s former man in Rwanda, called aid ‘the least effective major public service funded by Western taxpayers.’

On top of this, while we see the Coalition trying to tackle welfare dependency at home it happily encourages it overseas. Bear in mind nearly all Western countries have been pressured into increasing their aid budgets (although Holland has courageously decided to cut aid despite a predictable furore). This mean struggling nations must develop vast bureaucracies to service all their donors and deliver their dictats, instead of focusing on the needs of their own citizens.

Even worse is the way Britain pours money into the coffers of some of the world’s most brutal regimes. Ethiopia became increasingly-repressive under Meles Zenawi, whose death was reported last month – yet Britain gave hundreds of millions of pounds to his government even after Human Rights Watch found food aid being used as a political weapon. In Rwanda, British cash funded an electoral body that prevented President Kagame’s rivals from standing. Such is the desperation to find a country that proves aid works, we continued to lavish money on this unlovely regime even after Scotland Yard warned it sent a hit squad to kill British citizens living in Britain.

Defenders of aid have recently pointed to the astonishing falls in child mortality across Africa as proof of their policies. They are without precedent in recent history. But as others have said, what is so striking is how widespread the falls have been across the continent. In fact, they are down to improved governance, better health policies and various new technologies. As The Economist concluded, the broad moral was that ‘aid does not seem to have been the decisive factor.’

This highly-welcome development shows the speed of change in the developing world. Six of the fastest-expanding economies on the planet are African, now home to a growing middle-class, hungry for consumer products. They increasingly resent the tired old stereotypes perpetuated by development charities and your department, the damaging images of disease and distended bellies, the idea they need our salvation. They want tourism and trade, not dollops of aid. If we remain stuck in the past, obsessed by outdated narratives, they will happily turn elsewhere – not just to China, but to countries such as Brazil, India, Mexico, Russia and South Korea.

For all these reasons and so many more, I urge you to jettison the old-fashioned, neo-colonial approach of your predecessors. Don’t allow your agenda to be determined by self-aggrandising pop stars and self-interested lobby groups. If you really care about international development then you will shift your new department’s focus towards a modern outlook that recognises the emerging shape of the world.

The last Labour government proved that spending more and more money does not solve all our problems; indeed, it often makes them worse. The Coalition has accepted this at home; now please accept it abroad. Stop pandering to the aid lobby, stop parading as modern-day saviours of developing nations and step into the modern world. Otherwise you do both Britain and the nations you claim to be helping a gross disservice. It might even be a politically popular move by the government, an all-too-rare event these days.

Kind regards,

Yours sincerely,


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