Queen’s speech 2013: The 0.7% worry, no fuss

An extremely short blog post. Based on a…tweet!

Ivan Lewis ‏@IvanLewis_MP
Leaving 0.7 bill out of Queens speech shows Camerons weakness + lurch to right. + yet another eg of @nick_clegg’s impotence.#brokenpromise

Again, I’ve no political affiliation. Nevertheless, I wonder what’s the great fuss over this: Clearly, I and many others such as Phil Vernon and even the House of Lords have noted that 0.7% is not a silver bullet towards development. It is a “champagne-popping” means for donors and a “what-are-we-getting” outcome for aid recipients. Not to mention that Labour big wigs like Lord West favours reducing ODA. So is Justine Greening pandering only to the right? What about voters? They don’t seem to fully favour such legislation or proportional spending either.

So why chase after 0.7% Mr. Lewis? (and Ms Greening and the Lib Dems?)

Thatcher, Pergau Dam, ATP

Recently, with the death of Baroness Margaret Thatcher, the Guardian ran two articles discussing her impact on development: Short-lived legacy: Margaret Thatcher, neoliberalism and the global south and Margaret Thatcher: her impact and legacy in global development. What was not clearly mentioned in these articles was her various foreign aid/ODA policies.

Given that she “reigned” from 1979 to 1990, this post will not talk about aid policies every single year. However, aid levels would be an easier place to start with.

source :http://cf.owen.org/wp-content/uploads/UK-Aid-as-Share-GNI.png

This great diagram from Owen Barder’s blog evidently shows that aid during Thatcher’s time dropped substantially, though her supporters would still argue that aid rose in  several distinct periods. (This is all aid as a proportion of GNI but is a widely used measurement).

OK, so she wasn’t so generous in providing aid. What she and her very last Cabinet, did was to instigate a “development” deal with Malaysia. This is placed in parentheses as well, it is widely known in the International Development circles as the [ugly] “Pergau Dam Affair”.

This affair can be summed up in this Economist article. If you look at the timeline, the event arose after that Iron Lady left office, however, she (and her foreign secretary) were the key players in forging that deal with then Malaysian Prime Minister Dr. Mahathir Mohammed. It was one of the hallmarks, well last ones, of the notorious Aid and Trade Provision (ATP).

In a nutshell, ATP means: you get our aid on condition that you buy good from our companies and only our companies. (see White, 1998: 154 and others for a clear explanation). Pergau was financed and Malaysia in return bought (may not be the right term) around billion pounds of British military hardware (just old jet fighters if I’m correct). This later resulted in a furious uproar and enquiry.This article clearly indicated Thatcher’s role in fostering the deal:

On 6 August 1988, on a visit to Australia, she stopped in Kuala Lumpur and spent two hours with Dr Mahathir. According to a parliamentary answer, they discussed arms, aid and air rights for the Malaysians at Heathrow.

A month later, they signed a memorandum of understanding covering the purchase of pounds 1bn of arms from Britain. In March 1989, in a meeting with Dr Mahathir in London, Lady Thatcher offered aid for the Pergau dam.

Yet, she refused to appear before the Foreign Affairs Select Committee inquiry. It was then Foreign Secretary Douglas Hurd who bore the brunt of the whole matter. Pergau later became the key case for the creation of a Cabinet-level aid department, known as the Department for International Development (DFID). Under its first (and quiet fiery) Secretary of State Clare Short, ATP was fully removed with the creation of the International Development Act 2002.

For Thatcher, she, unlike Hurd, escaped the wrath of the Pergau investigation. Given a nice place the House of Lords, she simply slipped away. Fast forward now to 2013. One of the foreign guests who attended her funeral was Dr. Mahathir himself. Now, for full disclosure, I’m not saying that there’s any link between the Pergau Dam, the invitation of Mahathir, and Thatcher. More importantly, this post is explaining a part of Thatcher’s legacy less talked about.

Pergau will be forever Pergau. But one must not forget the Iron Lady’s hand in the whole matter.

White, H., 1998, “British aid and the White Paper on International Development: Dressing a wolf in sheep’s clothing in the Emperor’s new clothes”, Journal of International Development, 10(2), pp.151-166

For more about the Pergau Dam, also see Barder, O., 2005, Reforming Development Assistance: Lessons from the UK Experience, Working Paper 70, Washington DC: Center for Global Development
http://www.cgdev.org/files/4371_file_WP_70.pdf (Appendix 1)

and as of 2012, read Lankester, T., 2012, The Politics and Economics of Britain’s Foreign Aid: The Pergau Dam Affair, Abingdon: Routlege.

Warwick/RIPE Debate 2013

h/t Dr. Simon Glaze.

An International Political Economy (IPE) themed post. Recently, one of my favourite academic journals, the Review of International Political Economy, or RIPE, marked its twentieth anniversary. Below is a link of a video (I think now it’s broken but will be fixed soon) from the 2013 Debate.

Warwick/RIPE Debate 2013.

It features Prof. Matthew Watson as chair, and well for disclosure, one of my top favourite IPE academics.

UNGA Debates Global Economic Governance for Development

Reblogged from Post2015.org - what comes after the MDGs?:

The United Nations and Global Economic Governance, a UN General Assembly (UNGA) special event, was held on April 15th, 2013. The debate, including member states and representatives of the international financial institutions, revolved around the role of the UNGA in interacting with the international financial and monetary institutions. The importance of these institutions for the global transition to sustainable development was also discussed.

Read more… 134 more words

Value for Money: a very simple idea

Reblogged from Phil Vernon's blog:

There has been a great deal of noise, confusion, and at times sound and fury, over Value for Money (VfM) among overseas development NGOs based in the UK, of late. This is because so many of us depend on UK government funding from DFID, which has been taking VfM more seriously since the last election - and not surprising it has, given the degree of scepticism about overseas aid among UK taxpayers, some MPs, and journalists.

Read more… 1,235 more words

The IDC vs BOND: A clash over 0.7%

So recently, the UK Parliament‘s Commons Select Committee for International Development published a report titled Department for International Development’s Annual Report and Accounts 2011-12 (It was in response to this. See also this additional part.

Amongst the recommendations by the Committee, lead by the great Sir Malcolm Bruce, there was a warning:

…DFID should miss ODA calendar year spending targets where there are delays or cancellations to its planned projects and it does not have alternatives which provide good value for money.

(Paragraph 14).

A second warning/recommendation was:

About two-thirds of DFID’s expenditure in 2011-12, including nearly 40% of the Department’s bilateral expenditure (spending through country offices), went through multilateral organisations. This represents a major change in recent years and has been accompanied by a decline in general budget support to recipient Governments. DFID should carefully examine its growing multilateral expenditure and ensure that it has thoroughly examined other options such as greater use of local NGOs and sector budget support, especially as multilaterals have high costs and too often limited effectiveness. We recommend that DFID provide an annual report on the progress it is making on reducing the administration costs of multi-lateral agencies through cross-donor consensus. We commend DFID for demonstrating leadership in analysing multilateral costs and seeking to reduce them. We also welcome the Permanent Secretary’s willingness to look at making more use of ‘sector’ budget support.

(Paragraph 28).

Along came BOND, a consortium of British Non-Governmental Organisations (NGOs). Here’s their response. One, DFID should just race to 0.7% and there’s nothing wrong with aid through multilaterals/IOs. Bond clearly believes that 0.7% is relevant despite Clemens and Moss researchm my articles: How dare you not legislate 0.7, 0.7%? 0.07%? 7%? The lure and wonder over how much aid countries should give and Philp Vernon’s extensive critique. BOND seems to think it’s ok to give aid to multilaterals despite the principal-agent theory’s issue that delegation can lead to “agency slack”.

BOND, wake up!!!

A Tale of two live videos…

Across the month of November (or December, yes this entry is very late I watched two live videos, one of a two day conference, and one of a short panel consisting of two prominent world “stars”. More specifically, they were the Overseas Development Institute (ODI)’s Centre for Aid and Public Expenditure (CAPE) 2012 (CAPE 2012) conference and the World Bank Group’s “Dialogue [to] end [poverty] live web cast (All the videos for the CAPE 2012 conference can be found on the ODI’s Youtube page, although the sound quality is average.)

Anyway, the CAPE 2012 conference centred on the changing development landscape, particularly that of foreign aid, or its official name, Official Development Assistance (ODA). In fact, it targetted ODA issues and development issues relating to today’s context and the future. This included mentions on what IDA (Replenishment Round) 17, financing development beyond ODA, rising/new actors (speakers from China and Latin America for example), South-South cooperation, fragile states, aid to middle income countries and a whole host of issues. (See the conference agenda and the exact participatant list. In summary, a really relevant and content filled event for any researcher on development or even IPE.

Versus the World Bank talk. Two lone figures, Jim Yong Kim and the so-called rock star Bono. The topic: Responding to the World Bank request for post cards on how to end poverty. But really, the tlak was about slapping each other on the back and praising each other: Kim praising Bono on campaigning and Bono complimenting the Korean-American on the World Bank’s results (which weren’t Kim’s work at all). Then some definitions on poverty and poverty reduction. Bono and Kim’s best way to tackle poverty: Open Data. Oh please. It’s nice to release data, lots of people like Owen Barder have pushed for it, but that’s not how to end poverty. Poverty is not reduced when just data. They also just talked broadly on the Millennium Development Goals (MDGs). That’s find, but those are global broad targets, nothing about today’s and tomorrow’s development, as what CAPE ODI was discussing. Bono was talking all about campaigning for increased ODA. That was in stark contrast to the CAPE event, where even the World Bank Managing Director noted that ODA was not the main finance mechanism any more.

The bottom line: You have this new President of the World Bank rubbing shoulders with a rock star who has a narrow view and understanding of development. Whereas you have a two day event by a renown think tank that looked at development, ODA and poverty reduction through a pragmatic lens.