Thursday, October 27, 2016

Aid is business

The International Development Secretary, Priti Patel, suggested that aid spending should not “exclude the whole areas of trade and trade opportunities”. Her suggestion that we should use money allocated to fighting global poverty and inequality to secure trade deal is wrong – particularly when these deals chiefly benefit big business. Aid is being used to heavily promote the interests of multinational companies in Africa, rather than fighting poverty and inequality

When Patel took charge of the Department for International Development (DFID), she said DFID should be axed to form a new Department for International Trade and Development. That never happened but there is effectively an informal merger with the new Department for International Trade as they plan “joint missions” overseas to look for “economic opportunities” for British businesses. The wheels of new corporate-led trade UK deals will be greased with money from the aid budget. The rich see “aid” only in terms of how it can create economic opportunities, serve the “national interest”, and benefit them. These trade deals benefit multinational corporations and investors by stripping a country and its people of the power to protect its own industries and services.

Free trade agreements are bad for most people in the poorer countries. They harm producers by driving down prices of goods and removing protective tariffs. Regulations on environment, health and safety are often weakened or cut, meaning a race to the bottom for all. Moreover, privatisation is often at the core of these deals, meaning big businesses move in to run schools, water or health services at a profit. And the deals are rarely actually “free”. Rich countries inevitably maintain protection of their own exports, while the competitors in poor countries are forced to agree to open their markets. The drive to produce at the lowest cost is paramount for those pushing these trade deals and is pushed at the expense of workers, land and water resources. Thus free trade agreements pull poor countries deeper into poverty. Aid budgets should only be used for genuine poverty reduction initiatives, such as support for small-scale farming, improving education or healthcare rather than boosting the profits of big business.

Due to a global network of tax havens, tax evasion, corruption and money laundering an estimated $3 trillion of revenue is lost every year.

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