Debating at the Dulwich Festival

By Alex Singleton | 14 May 2005

I took part in a debate last night at the Dulwich Festival in London. The debate was on the aims of the Make Poverty History campaign. Some of the sharpest audience contributions came from students from Alleyn's School. One of the students said he was a member of the Labour Party before going on to defend free trade. The speaker from the World Development Movement, Dave Timms, was clearly a little put out by this! Another of the students pointed out that fair trade schemes lead to oversupply and depress prices further. And another pointed out that it is all very well for opponents of free trade to say they are in favour of trade, but if you increase the cost of trade, you get less of it.

Other speakers included Dr David Keen, Reader in Complex Emergencies at the London School of Economics, and Revd David Peck, Archibishop's Secretary at Lambeth Palace. The event was chaired by Emily Buchanan, World Affairs correspondent for the BBC.

In my speech I concentrated on foreign aid. This is what I said:

The Make Poverty History campaign should be commended for their efforts putting the world's poorest onto the agenda this year. I agree with them that it is scandalous that so many people in the world today live in poverty. Where I disagree is that I don't think that their agenda offers a particularly plausible way forward.

Yet there is much I agree with. I have publicly supported debt cancellation for a number of years like other speakers here tonight. I am happy to do so because these loans were often ill-conceived loans to illegitimate rulers who squandered the money on lavish lifestyles and arms.

I agree with Make Poverty History that the West's protection of its agriculture - most notably the Common Agricultural Policy - is a travesty.

But this evening I am going to concentrate on the campaign's call for More and Better Aid. When it comes to aid, I fear that the supporters of Make Poverty History have not learnt the lessons of history. While some are calling for a Marshall Plan for Africa, the fact is that between 1960 and 1997, Africa received the equivalent of six Marshall Plans. Foreign Aid over the last half-century has - on the whole - been a massive failure. Foreign aid has sheltered bad governments from needing to run their economies wisely, and the money has been mostly wasted on Swiss bank accounts, the ruling elite and on arms and civil wars. All the evidence - study after study - shows that when bad African governments receive foreign aid, the country gets poorer.

The only developing countries that are benefiting from foreign aid are those who have good governance. But these are the developing countries that are already doing quite well, whereas the priority needs to be to help those countries that are worst off. And these are the countries that are unlikely to benefit from aid.

Now it is true that Make Poverty History is calling for Better Aid. That sounds good. But what does "Better Aid" mean? Does it mean ensuring that it is spent wisely? Does it, for example, mean ensuring recipients follow good economic policy? Well no it doesn't. Organizations like the World Development Movement oppose placing "conditionality" on aid.

Actually, they may be right to do so, but for the wrong reason. They oppose conditionality because they think it forces poor countries to do things they don't want to in order to get the aid. In fact, the evidence is that conditionality is actually incredibly difficult to enforce. Poor countries accept the conditions but quite regularly ignore them. They later tell donors that they are not now able to do X for political reasons but they can do Y instead. Because donors like the World Bank need to disperse money in order to justify their budget and their staff, they are very reluctant to stop giving to countries that pick and choose what conditionality to follow. The balance of power where conditionality is concerned is very much with the developing world. If there is a case for opposing conditionality, it is to stop donors from having unrealistic expectations about how their aid will lead to reform by receipients. And, ultimately, poor countries must decide for themselves what policies they should follow.

The ineffectiveness of persuading badly-run governments to follow good ideas through conditionality means one thing: giving more development aid to many of the poorest countries - like Liberia or Somalia - is just a waste of money.

Wishful thinking is not enough in the fight against poverty. And yet the Make Poverty History campaign fails to deal with major causes of poverty in Africa: incompetent and corrupt governments; civil wars; dysfunctional banking systems; insecure property rights which make it impossible to get a mortgage on a house thereby preventing Africans from raising the capital to set up small businesses; low productivity; and the continent's inability to gain inward investment. These are the real issues if we are to Make Poverty History.