Finally, an idea on international aid we can get behind


Should we clothe the naked, feed the starving and succour the ill favoured in our world? Yes, no doubt we should. Emergency aid isn't one of those things that really causes much controversy. There might be arguments about how it is done, should we ship food or ship money to buy food locally, for example? (The answer is the second). But that's not what international aid is these days: it's rather more about paying the EU to teach people to take trapeeze lessons.So, we entirely welcome this suggestion:

First, the language of investment better reflects the reality of modern aid. The charity paradigm has long been considered patronising by most poor countries, and is increasingly considered old-fashioned even in many “donor” agencies. The reality that strategic and economic interests have always been at play in aid-giving is recognised by most DAC, or developed country, donors somewhat cautiously, but is explicitly promoted by the “emerging” contributors of development cooperation in the global south.

These “emerging donors” eschew the term aid because of its simplistic connotations, preferring the language of “mutual benefit”. They want to imply “horizontal” relationships between equals, fundamentally similar to business transactions. Investment, not charity.

Yes, we're all for this. Firstly, doing it as investment means that at least some attention will be paid to how effective it is. That is, what is the return? It's not necessary for this return to be appropriable by the investors, but just the calculation of whether there will in fact be one or not would have a bracing effect upon decision making.

But there's another point to be made here as well. We don't, domestically, think that governments are very good at investment. So, there's no reason at all for us to think that they will be very good at foreign investment either. Thus, if we are to move over to an investment paradigm, as we agree we should, then it's not going to be government that does the investing. Thus the end of Overseas Development Aid altogether, and the replacement with proper commercial investment.

As of course should happen anyway in our view. As has in fact been happening. ODA is of the order of $100 billion a year these days, Foreign Direct Investment, FDI, is of the order of trillions a year globally. The ODA is only a remnant rump of the process making the poor of the world richer anyway. So, no problems if it gives way to the more efficient and effective investment, is there?