NO BETTER THAN THE PREVIOUS 500

Bauer-Onslow case

PETER BAUER and Cranley Onslow seek to mark the 50th anniversary of development aid by claiming falsely that it has failed, attributing some of the major wrongs that have occurred in developing countries to the effects of aid. They then switch their ground and call for a pro- gramme of reform not abolition — much of which is sensible.

The reality is that, despite all the misuse of aid that occurred during the Cold War years, more people have escaped from poverty in the past 50 years than in the previous 500. When we realise that the previous 500 years included the period when Europe and North America climbed out of mass poverty, it underlines what a big achievement this is.

Peter Bauer and Cranley Onslow should apologise for their criticism of President Truman. Truman's vision was right. Expenditure of small amounts of money has helped create a massive advance in the quality of life for millions of people. Just as the Americans were right to help Europe with Marshall Aid after the second world war, so we are right to help the developing world in the same way.

It is reasonable, of course, to ask: if aid is so successful, why are so many people so very poor? The simple answer is popula- tion growth. More have escaped from poverty than ever before, but even more have been born. World population was 2.3 billion in 1945, is 5.8 billion now, and will inevitably reach 10 billion. It could sta- bilise at under 11 billion if we spread edu- cation and basic health care, including reproductive health care, across the world. If not it will grow even further, with more violent conflict and large-scale refugee movements.

There are strong moral reasons for sup- porting aid and development, but they are complemented by hard-headed self-inter- est. The resources of the planet are finite. Growing population imposes great strains. The only way to stabilise population growth is basic education for all, including girls, and giving people the chance to con- trol their fertility and see their children live and grow.

Wherever these conditions are put in place, population growth stabilises. It is also in our interest to avoid war and foster trade. Development assistance helps achieve all these aims and this brings big rewards for very little cost.

The suggestion that aid was responsible for Mrs Gandhi's enforced sterilisation policies, the emergence of Idi Amin, civil war in Mozambique, or genocide in Rwan- da is simply false. But they are right to sug- gest that aid may well have been implicated in enforced collectivisation in Tanzania, and certainly Western donors provided massive aid to the corrupt dicta- torship of Mr Mobutu for all the wrong, Cold War reasons. But the fact that some aid was badly spent does not mean all aid was, or that it always must be.

The joint authors refer dismissively to the international campaign calling for the reduction of the unpayable debt of the world's poorest countries. They tell us it is no solution. The G8, the IMF, World Bank and Christian Churches worldwide, disagree. There is international agreement that we should reduce the unpayable debts of the poorest countries to sustainable lev- els, provided they adopt beneficial eco- nomic policies. Again, this is morally right and hard-headed.

The debts are unpayable and prevent new governments who inherit bad debts from their predecessors being able to deliver reform, spend on health and edu- cation or attract inward investment. The commercial banks wrote off such debt long ago. The remaining problem is about IMF, World Bank and export credit debt.

Again we should examine our own histo- ry. German debt was written off after the second world war so that the European economy could recover. Germany was sad- dled with debt and reparations after the first world war and the consequences for Europe were highly destructive. Halfway though their argument Lord Bauer and Sir Onslow change tack. From exaggerated claims about the failure of aid, they move smartly into advocating a programme to reform aid. From here on, I became more interested in their arguments and agree with some of them.

Their first claim is that we should end government-to-government subven- tions. This is not right. Much government aid in the past has gone into projects dams and roads, but also clinics and schools — which were unsustainable. When the donors departed, the projects ended. Now we seek to work to support reform that will strengthen government services permanently. We focus particular- ly on education, health and clean water, but also on financial management and tax- raising systems. And we help through our resource transfers to establish universal primary education systems. When our funding ends in ten or so years, there will be a self-sustaining, quality primary educa- tion system in place. When a generation of children has been through primary educa- tion, this produced a major development effect in all countries. Thus, sometimes, government-to-government work is better than projects.

I agree very much with the authors that we cannot allocate resources simply by need, regardless of the quality or values of the government. We need to back good governments and create models that suc- ceed and therefore encourage people liv- ing under bad governments to demand change. Under bad governments we should try to strengthen voices for reform. We must, of course, provide humanitarian relief to those who are starving, but we should also be clear that this is an essential act of human charity, it is not develop- ment. What we must do in these circum- stances is to act to end the cause of the starvation, which is often continuing war- fare. Otherwise, humanitarian aid can sim- ply prop up war economies.

I do not agree with Lord Bauer and Sir Cranley that all aid should be bilateral. We need to strengthen the effectiveness of the IMF, the World Bank and UN agencies to manage our globalising world. We simply cannot work directly in every needy coun- try. We should, however, make our input into international agencies conditional on increased effectiveness — and this we are doing.

We are living at a time when a great advance in human development and poverty reduction is possible. Countries across the world have voted to work together to meet a range of targets, includ- ing halving the population of people living in abject poverty by 2015 and providing universal primary education and basic health care by that date. The OECD Development Committee spelled out its commitment to these aims in its 1996 report Shaping the Twenty First Century. The G8 reaffirmed their commitment to the targets at the Birmingham Summit. All the experts agree that these targets are affordable and achievable. To make progress, we must focus both our bilateral and multilateral systems on these targets, and we must back up the efforts of devel- oping country governments committed to the targets.

Britain spends £20 billion on defence, £100 billion on social security and £2 bil- lion rising to £3 billion on international development. This is a small expenditure for a massive objective — eliminating abject poverty from the world and leaving a sustainable planet to the next generation. This aim is both noble and essential to our national interest.

The author has been Secretary of State for International Development since May 1994.