No, no, I'm afraid this isn't quite how it works

A very badly aimed piece of snark in the Telegraph's city gossip column:


Here's a tale of how public money for good works can end up in private offshore hands that is troubling conscientious corners of the City. It involves the Emerging Africa Infrastructure Fund (EAIF), an enterprise set up by a fund co-founded by the UK Department for International Development, which decided to invest $25m (£16m) into a start-up satellite services provider called O3B Networks. If the EAIF really wanted to make “a real and lasting difference on the development of sub-Saharan Africa’s infrastructure”, as it states on its website, wouldn’t it have done better to invest in an African-owned satellite company? Channel Islands-based O3B prefers not to break down its exact ownership structure, says a spokesman. But, given its largest shareholder is the Luxembourg-based satellite group, SES, accompanied by the similarly tax-conscious Google, it has a distinctly first-world flavour.

No, no, I'm afraid this isn't how it works. As Adam Smith reminded us all, consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. As he didn't go on to point out, not only must we not attend to the interests of the producer over and above those of the consumer we should also ignore who is the producer when attempting to gain that consumption opportunity.

A satellite firm, one that knows what it is doing, backed by the likes of Google among others, seems like an excellent choice to provide satellite internet links (this is what the company does) to those sort of places in Africa that currently do not have decent internet links. Further, we know very well that the provision of simple mobile telephone increases GDP growth. One researcher says that growth increases by 0.5% of GDP for every 10% of the population that has a working mobile. And there is similar research showing that simple broadband, up to 2 Mbits/s (we don't know about higher speeds, no one has had widespread coverage for long enough for us to check) similarly increases GDP growth. And finally we also know that those countries which do not currently have a landline network are never going to get one: it's so much hugely cheaper to wire everyone up using mobile technologies.

So, what we'd actually like to do for the poor of the world is whack some satellites up there and let them get access to that mobile telephony and internet. Which is what the company does, its name standing for "The Other 3 Billion".

Who owns it, whether they pay their taxes, whether they pay any taxes at all, are entirely irrelevant compared to the benefits that will come from the consumption of the company's products. After all, as I repeatedly say, the benefits to us of Google are not the number of people the company employs, not the taxes it does or does not pay, but the fact that we get to Google. So it is here: who gives a damn who is building the thing, it's who gets to use it that is important.