UK aid should not be used to help the City of London, warn campaigners
Launching an overhaul of British aid today, development secretary Penny Mordaunt said aid should serve British interests as well as those of developing countries, and put a greater emphasis on working with the private sector, global business and the City of London.
But campaigners from Global Justice Now warned that such a strategy was based on outdated ideas of trickle-down economics and risked future financial crises across African and Asian countries.
Nick Dearden, director of Global Justice Now said:
“We’ve clearly seen the dangers that the big financial corporations in the City of London have done to the world over the last 10 years. We’ve seen the way that unregulated free trade has trashed poorer economies while boosting the profits of big business. What the developing world needs is the control and regulation of these institutions so they can gain some control over their own economic development. Unfettered free trade and free markets will not solve poverty. They will make the world more unequal, more insecure, more dangerous.
“We applaud the Secretary of State’s promise to clamp down on tax dodging, and we agree that there is support in Britain for humanitarian aid and for supporting high quality healthcare and education around the world. But services must be delivered by the public sector, on a democratic basis, free to use for citizens of poorer countries – just as they are here. We cannot trust financial markets to deliver basic services and rights to people.
“We are deeply concerned by the idea that anything which helps British business and the City of London invest in Africa will help reduce poverty. This is trickle-down economics – pour money in at the top and it will eventually help those at the bottom. Sure, investment and trade can be useful, but only if properly controlled and regulated democratically by African governments. Otherwise, the flow of capital will simply enrich the bankers in the City and the elites of the recipient countries. Some African countries are already at risk of a re-run of the 1980s and 90s debt-crisis - simply flooding markets with more loans and finance could well exacerbate that.”
Photo: Penny Mordaunt, UK international development secretary. Credit: Benet Coulber/DFID.