Spending review reaction: lessons should be learnt from the developing world.
Date: 20 October 2010
The World Development Movement reacted critically to the announcements saying that for 30 years developing countries had faced the same austerity measures which led to more poverty and more injustice for the poorest people. It also said that it was deeply deceptive that climate finance and the Green Investment Bank were being touted as ‘good news stories’ by the coalition government.
Deborah Doane, director of the World Development Movement said:
Resisting austerity: lessons from the developing world
“The experience of austerity measures imposed on developing countries should sound alarm bells for us all. These measures are not a new innovation; they were cooked up by Thatcher and Reagan in the 1980s and forced onto developing countries by the IMF and World Bank. The effects were devastating: inequality, poverty and injustice increased as public services and welfare spending were slashed.
“Recently, such policies have been completely discredited; even the World Bank and IMF held their hands up and said they got it wrong. Countries, like Malaysia and Vietnam, that resisted the austerity measures remained far less vulnerable than those that had to succumb to these failed economic prescriptions. If we don’t resist this illogical thinking, the outcome will lead to a truly broken Britain.”
Green Investment Bank – ‘throwing good money after bad’
“A massive amount of public money has been poured into RBS which is investing in dirty oil, mining and coal projects. Contrast this to the miniscule £1 billion of public finance offered for a green investment bank – this is halved from previous proposals. This is throwing good money after bad, and will not generate the kind of investment needed to generate green jobs, green industry and a green economy in the UK. This is a short-sighted and wasted opportunity.”
Tug of war over aid budget – climate spending
“Whilst it’s welcome that the government has recommitted to meeting its aid target, the only way that the government can claim it’s on track to meet its 0.7% aid budget and climate finance commitments is through some very dodgy accountancy tricks – i.e double counting. The same money is being counted twice to meet different targets – an aid target and a climate target. And disgracefully, 70% of the UK’s climate finance is being provided as loans which will lock developing countries into unjust debt and poverty.”
Tug of war over aid budget – defence and military spending
“Defence spending has been cut and it’s clear that the government is looking to plug the hole by raiding the already tiny international development budget. Aid is supposed to help provide health care and education to the poorest countries, not bolster the UK’s military operations.”
