Aditya Chakrabortty tells us that it's very important indeed that the UK continue to shift 0.7% of GDP overseas as foreign aid:
No, if you want to see how far to the right our new prime minister will go, watch one area that most papers barely cover. Watch international development.
By development, I mean emergency relief for Syrians bombed out of their homes, healthcare for new mothers and their kids in Sierra Leone and school lessons for girls in Pakistan. Who could be against any of that? The answer is: no one in mainstream politics. It may have been Labour that pledged a target for government aid spending, but it was the Tory-led coalition that made that promise reality so that, of every £100 Britain earns, 70 pence goes to poor countries. That, David Cameron claimed on his last day at No 10, was one of his proudest achievements.
We agree entirely that aiding the poor in becoming rich is a moral imperative. We also agree that there's much that we can do to aid in this process. However, we are with Peter Bauer here, in that foreign aid is all too often taking money from poor people in rich countries to give it to rich people in poor countries.
We exclude from this disaster aid - although even there we insist that sending food which arrives well after the next harvest is not the way to deal with famine. Instead, send money to give to people to buy food. As Amartya Sen has pointed out, modern famines are not about a dearth of food, they are about an absence of effective demand. Let us solve the actual problem in front of us.
But aid as development aid? Again, let us solve the actual problem in front of us. Which is that poor people are poor because they produce little of value. Not just little of value to us but little of value to themselves or anyone else. The solution to that is to aid them in producing things of value. Economic development that is - or, as Madsen of these parts puts it, buy things made by poor people in poor countries.
With Brexit now to happen there is a golden opportunity for us to aid in this:
Take the example of coffee. In 2014 Africa —the home of coffee— earned nearly $2.4 billion from the crop. Germany, a leading processor, earned about $3.8 billion from coffee re-exports.
The concern is not that Germany benefits from processing coffee. It is that Africa is punished by EU tariff barriers for doing so. Non-decaffeinated green coffee is exempt from the charges. However, a 7.5 per cent charge is imposed on roasted coffee. As a result, the bulk of Africa’s export to the EU is unroasted green coffee.
The charge on cocoa is even more debilitating. It is reported that the “EU charges (a tariff) of 30 per cent for processed cocoa products like chocolate bars or cocoa powder, and 60 per cent for some other refined products containing cocoa.”
The impact of such charges goes well beyond lost export opportunities. They suppress technological innovation and industrial development among African countries. The practice denies the continent the ability to acquire, adopt and diffuse technologies used in food processing. It explains to some extent the low level of investment in Africa’s food processing enterprises.
If we wish to aid developing countries in developing we should buy more of what they produce. And enable them to add more value to it to boot. The best thing we British can do is simply throw open our borders, entirely tariff free, to anything and everything made by poor people in poor countries.
There are those who insist that unilateral free trade causes jobs losses at home. They are wrong of course, that is nonsense, cheaper imports make us richer. But imagine they are right - what better use of the aid budget than enabling development overseas and compensating those who lose from it?
This free market globalisation thing has led, in recent decades - and as we have pointed out many a time - to the greatest reduction in absolute poverty in the history of our species. We should be, if we do want to aid development, reinforcing what works. Which means opening up, tariff free, to those products of the poor. Once and only if the aid wallahs agree to that will we even start to discuss that aid target as something that might remain. Because only if they agree to that will we know they are being serious about wishing to boost development.