An opportunity on international aid

Last week it was announced that the Prime Minister is to chair a United Nations committee on overseas development. While this may be viewed with some scepticism, it is surely a good thing for a centre-right leader to try to build a consensus for greater involvement from the private sector, so trade can be a greater part of the development of the world’s poorest countries.

The Prime Minister must use any additional clout this UN position gives him to try and turn the current system of international aid into something which allows the Developing World to become less reliant on the West. He could do worse than having a word with his fellow EU leaders. The EU preaches the values of international aid, and puts our money where its mouth is. However, it will come as no surprise that the EU is simultaneously helping and hindering the Developing World – using plenty of our cash, of course. The Common Agricultural Policy not only stifles the growth of developing countries, but is also yet another example of EU waste and extravagance at our expense.

In 2010, the EU spent €9.7 billion (£7.93 billion) on Development aid. This figure is only what the EU spent itself, and does not include the bilateral spending of its member states. But while it is right for the West to prevent people needlessly dying, it would be more sustainable for the EU to reform the Common Agricultural Policy, and ultimately reduce the need for aid.  Even the Liberal Democrats see flaws in the CAP. Essentially, it places a tariff on agricultural produce from Developing countries, to reduce their competitiveness vis-à-vis European goods, as well as subsidising European producers. The tariffs and the subsidies go to block out producers in the Developing World, making it difficult for them to trade. Surely it is obscene to spend money on aid while simultaneously spending to shut them out of the market. The Prime Minister must attempt to gain a genuine consensus on reform – he must stand up for taxpayers who are fed up of seeing Brussels blow our cash on the CAP, as well as for those who don’t want to rely on the West for a living.

There are colossal examples of CAP waste, and sorting this problem would be a step in the right direction.  The CAP civil servant budget is £72 million per year, and they are allowed to spend over £5 million on furniture and equipment. These sums are outrageous in their own right, but especially so as they are part of a flawed scheme which contradicts other areas of EU work. It is only right that the Britain does all it can to end such waste, and put a halt to the EU gravy train. Further private sector involvement in the Developing World would not only lead to greater opportunities for some of the poorest, but would see less spending responsibility residing with Western  governments.

Closer to home, British bilateral aid needs to be looked at. While UK aid is doing great things and saving lives, the system is far from perfect. The House of Lords Economic Affairs Committee said last month that the Department for International Development (DFID) must “do more to tackle corruption” which results from British aid. It is unacceptable for a single penny of taxpayers’ money to be unaccounted for. As well as attempting reform through international institutions, the Prime Minister must reform the way things are done here. Not to mention the fact that aid unaccounted for probably isn’t saving any lives.

I would suggest that progress on the following five points would benefit the West, and those it is trying to help:

Scrap (or, at the very least, wholly reform) the CAP

- In 2010, the CAP budget equalled £48 billion – almost half of the European Union’s total budget. The TaxPayers’ Alliance estimates that this costs each British household almost £400 per year.

Allow the Developing World to trade

- While aid to the Developing World has some success, in the long-term, aid alone cannot be the only answer. People in the world’s poorest countries need to be able to trade with the richest, in order for them to not have to rely on handouts. This is why the EU need to take a look at the tariffs and subsidies.

Ensure all money is accounted for

- The House of Commons Public Accounts Committee has warned that even more UK aid is liable to be lost to fraud. Every single penny of public money needs to be accounted for.

Reduce what the EU spends itself, more effective via countries

- The same committee also warned that by giving money to international organisations such the EU, that money was more likely to be lost. Britain should reduce the amounts it gives to the EU and focus on its own bilateral efforts.  This is to ensure that the money is actually accounted for, goes to the right places, and gives the EU less ability to try and build itself as a global player.

Increased private sector involvement

- A cull of the CAP and the opening of the European market would see benefits for Developed and Developing countries. It would mean that taxpayers in Britain and across Europe would stop having to give money to the EU to subsidise European farming. Additionally, opening trade barriers would enable those in the poorest parts of the world to trade with the West. This would obviously benefit them, as there would ultimately be less reliance on handouts. It would also reduce the burden on taxpayers, and go to greatly decrease the role of the EU.

The Prime Minister has sought to play a key role in International Development. He must now seek to ensure that government does not need to play such a large role in the future. More economically liberal policies are needed to ensure more people in Developing countries can become self-sufficient. Western governments can reduce their own role, which will reduce the costs on their own people. David Cameron has a huge opportunity to further integrate the private sector on aid, and must attempt to improve the way the EU works. Such changes can benefit the rich and the poor, and would be a vast improvement on the status quo.

By Darren Rutland