Aid agencies: Blair package not enough

By Teresa Küchler

Date: 30/06/05

The stage has been set for the meeting of the Group of Eight industrialised countries (G8) in Gleneagles, Scotland, next week.

The warm-up act will be the Live 8 concert in London. Then there will be a mass demonstration by anti-poverty activists in Scotland.

The energetic preparations of the UK Prime Minister Tony Blair and Finance Minister Gordon Brown have apparently paid off. There will be an international agreement not just on debt relief but on increased aid to the developing world, with new money from Italy and Germany to meet Blair's aim of increasing aid to Africa by $25 billion (e21bn) a year by 2010.

But not all experts are convinced that another aid package is the best way to get Africa on the track to prosperity in the long run.

The international development agency ActionAid stated in a report published earlier this year that more than 60% of aid money simply disappears on its way from donor to receiver. There are problems with corruption and projects from different donors and member states overlapping each other.

ActionAid argues that the UK government exaggerates the value of its aid, including debt relief, in published aid figures, and that most Western aid has little to do with fighting poverty. Instead, it upholds a lucrative system of "overpriced consultants" and "technical support", says the report. It also accuses the US of linking its aid to ideology and American interests.

But others support a little bit of self-interest for the sake of long-term aid. Stanley Crossick, a Brussels-based analyst, believes that Blair should focus not just on higher figures, but also on the actual implementation procedures for aid and that Europe should be less reluctant to involve private initiatives in its aid policies.

"The Tony Blair objective of doubling aid to Africa is laudable. Gleneagles must ensure that a process is put into place to ensure that the aid is spent cost-effectively.

"Some aid has to go to cope with current crises, but it is essential that there is also a long-term strategy embracing better governance and sustainable development," he says.

To achieve sustainable development in Africa, the American aid system, where private companies work alongside public bodies in public-private partnerships, to a greater extent than in Europe, is often extolled. The argument goes that a mutual profit interest is good for long-term improvements, as the involved bodies stay in the receiving country to maintain their business. The private company provides the recipient country with top management and science.

A traditionally European view of aid is that business and humanitarian aid should be kept apart. A colonial history of ruthless profiting from Africa has left a legacy of guilt and giving away tax money to private companies to invest in Africa - even with a good outcome for the African country - is politically contentious in most European countries.

Some economists say that giving aid money to Africa, whether administered by private or public bodies, does not solve the underlying problem: that Africa must live on its own resources and not depend on charity.

International aid agency Oxfam said on 22 June that the Blair package was just a good start. "The European Commission's decision to adopt a new system of trade preferences for poor countries will help poor countries to trade their way out of poverty, but the gains will be limited as many of Europe's protectionist measures have been maintained."

Gordon Brown's original plan for the G8 agreement argued that the EU and the US should scrap subsidies to their own farmers, lower import tolls and tear down trade barriers around their continents.

Yesterday (29 June) Brown launched a further attack on the EU's Common Agricultural Policy. The subsidies for EU farmers, he argued, prevented African nations trading their way out of poverty.

Politicians, resurrected pop stars and actors with a conscience might wear white ribbons against poverty and buy tickets for the G8 credibility tour, but it will be far more difficult for the leaders of the rich countries to meet the demands of their African counterparts for "trade, not aid".

Anticipation of the meeting of the Group of Eight industrialised countries (G8) in Gleneagles, Scotland, 6 July 2005, where an international agreement on debt relief and on increased aid to the developing world was expected to be agreed. Article features voices calling on leaders to focus on implementation procedures for aid including the role of private initiatives in aid policies.

• Primary Source

G8: 2005 Gleneagles Summit http://webarchive.nationalarchives.gov.uk/+/http://www.dfid.gov.uk/g8/UK-presidency-05.asp

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