Posts Tagged ‘Neoliberalism’

Dead Aid?

August 31, 2010 Leave a comment

The national security council has said the ODA [Overseas Development Administration] budget should make the maximum possible contribution to national security consistent with ODA rules. Although the NSC will not in most cases direct DfID spend in country, we need to be able to make the case for how our work contributes to national security.”DFID document

Documents leaked from DFID over the past couple of weeks hint at a significant shift in the future direction of  Britain’s overseas development policy; a reorientation that cannot be viewed with optimism.

After Left Foot Forward initially received a leaked ‘submission to Ministers’ from DFID’s Director of Policy, Nick Dyer, on August 12, the story has continued to run until the Guardian decided to publish a similar story on August 29. Whilst the former discussed recommendations for which projects could be abandoned (and was intended, obviously, for Ministers), the latter covered DFID’s directive to the ODA that security considerations (and the NSC) should be utmost when justifying aid expenditure. The UK government, and in particular DFID, are not exactly flattered by these latest developments. The most pressing concerns for the UK’s forthcoming overseas development policy appear to be issues of national security and stakeholder interests. Apparently, this constitutes part of the reappraisal of how aid should be applied. The Tories would like aid to be measured by outputs and outcomes rather than inputs, which is an admirable intention however unfeasible that ultimately may prove. Unfortunately it can be used as a smokescreen for removing support for numerous important initiatives, raises the prospect of short-term gains being favoured over those occurring over a more extensive period of time, and is conducive to facilitating the increased securitisation of the UK’s overseas development programme.

Conflating concerns over national security with overseas development assistance is hardly a new phenomenon – much of the Marshall Plan was governed by similar issues – yet it’s increasing prevalence is in contrast to the dominant liberal orientation of international relations in the post-Cold War context. Liberalism, and therefore humanitarian intervention, has endured repeated attacks from both Right and Left. The Right have long argued that self-interest must govern foreign policy whilst the rise of post-structuralism on the Left has questioned the long-assumed moral superiority of the West. Technological development, and the attendant growth in public access to information, has fundamentally damaged the image of the West, and the US in particular, as the guardian of progressive, democratic values. There is no moral authority when the US attacks Afghanistan and Iraq or when Israel commits its regular atrocities, and global sentiment has become resolutely anti-American (although Obama has alleviated this to a certain extent). Put simply, there now exists a choice between supporting a truly altruistic aid agenda (where we expect little in return) or one based on overbearing conditionalities. It’s clear that the UK has chosen the latter. Given the present state of most Western economies, and the increasingly multipolar nature of global politics, this is hardly surprising.

Iraq and Afghanistan were both major recipients of DFID expenditure over the past decade (although Iraq was not in the top 15 for 2008/2009 – see figure 1), yet the trend has been for aid to largely go to where it is needed (or to former British colonies). Much of

figure 1

the aid directed to Iraq and Afghanistan was aimed at the amelioration of the fragile security situation in the two states (and ultimately British national security interests). Whilst this is understandable in the context of post-conflict reconstruction there are two key problems with the approach. Foremost is the issue of an aid imbalance – the vast majority of aid to Afghanistan from global sources has been targeted at security concerns, ignoring myriad other areas that would perhaps benefit more readily from aid spending, such as health and education. The lack of support for key areas of Afghan development might not prove particularly significant given the precipice that the country appears to be falling into, but propping up Karzai’s completely discredited and rotten regime (and its equally corrupt military) is rapidly becoming a disaster. The haste with which NATO appears to preparing to exit the country merely reinforces the notion that this is not a humanitarian intervention. The second important issues relates to the wider application of the use of aid for protecting issues of national security. In war zones there is an arguable necessity in directing aid towards a nation’s security capacity; what will happen in those states where the same principles do not apply? There is clearly the potential for a reappraisal of which nations will be useful recipients of DFID’s aid programme – those nations that are unlikely to contain threats to British national security could potentially see their aid cut. This would include much of Sub-Saharan Africa with the clear exception of Somalia. The region includes many of the world’s poorest nations; those that are dependent upon foreign aid (albeit with this having debatable consequences.) Somalia would be a prime target for a move towards an aid agenda driven by national security concerns, yet the state’s (used in the loosest term possible) incredibly unstable nature will most probably dissuade the West from any significant intervention. DFID’s future direction may be to move away from the more holistic approach it has taken in recent years to one guided by self-interest. Not only is this at odds with some of the guiding principles of aid provision, it is unlikely to prove especially successful.

Aid is fundamentally altruistic. There exists a clear requirement to monitor the return upon the provision of aid, but this should be made on the basis of how it alleviates the suffering of those most in need. By placing issues of national security as the primary concern, the return upon aid provision has the potential to be measured in misguided terms. Aid related to the development of a nation’s health and education provision has repeatedly proven itself to be integral to a state’s progress. In the wider context of development models, investment in human capital and education have often been ultimately conducive to particularly fast rates of economic growth. Health and education are not usually central to a nation’s security concerns however. Through directing aid to other avenues, some of the world’s poorest individuals may become increasingly vulnerable as a consequence of DFID’s future aid policy. Not only may health and education programmes endure a shortfall from redirected aid spending but perverse incentives to actually undermine positive development approaches could yet arise. Investment in education creates possible conflict with national security concerns. Suppose aid earmarked for education encourages the establishment of Madrassas that ultimately encourage the radicalisation of a number of individuals. Perhaps investment in communications infrastructure will increase exposure to radical thought via the internet. On a particularly basic level, encouraging individuals to unite on a daily basis in one particular place (as education provision does) will lead to an exchange and consolidation of ideas antithetical to Western principles. This blog doesn’t believe that these processes will happen, yet this line of thought could be used as justification for DFID to restructure aid provision.

The most alarming outcome would be for the aid imbalance to overwhelmingly favour investment in a nation’s security and military capabilities at the expense of institution and basic infrastructure building. An increasingly militaristic state will always be vulnerable to a potential Coup d’état and, consequently, the establishment of an extremely powerful military dictatorship with little credible opposition. Should this new hypothetical regime support the UK’s national security interests would this be viewed as a satisfactory outcome? There really isn’t a significant difference between this and the disgraceful Reagan doctrine. It would be completely opposed to the humanitarian principles upon which the provision of aid is founded.

The realignment of DFID’s aid policy is in keeping with many of the wider changes the Conservative-dominated UK government wishes to implement. Although the pledge to retain overseas aid spending at 0.7% of GNI by 2013 is to be applauded, it has come at a cost. Under the guise of efficiency savings, DFID will cut a third of its present workforce in East Kilbride and abandon the majority of the near-100 aid-related pledges that were established under Labour. This is a somewhat mystifying decision given the proclaimed move towards an output-based approach to assessing overseas aid requirements. By removing established targets what are the ultimate aims of DFID’s aid programme? Using the ringfencing of DFID’s budget as justification for a pejorative shift in policy direction is embarrassing for the UK as a whole, and worrying for many smaller NGOs that are reliant upon DFID’s present investment choices. It’s another neoliberal answer that nobody needs. As if the British people weren’t going to suffer enough from a government with an ideological basis that has never worked, DFID’s aid revisions will ensure that this suffering is exported to some of the world’s most vulnerable populations.


We’re all in this together

July 7, 2010 Leave a comment

No Sympathy for a Sinking Ship

June 22, 2010 Leave a comment

As the second round of World Cup group games conclude and the UK lies precariously underneath the Damoclean sword of  Osbourne’s ideologically driven, socially divisive “emergency” budget, there are interesting parallels to be made between the relative performance of teams in the world cup and their respective socio-economic models.

In simple terms European teams are not matching their pre-tournament expectations, whilst their South American counterparts are performing beyond the predictions made of them (this blog included). All five South American qualifiers currently sit atop their respective groups and have provided the competition with some of the more fluent and stylish football thus far. Argentina are ridiculously entertaining (both on the field and in the dugout), Brazil appear extraordinarily resilient and defensively strong, Chile attack with such exaggerated verve that their inability to finish is something of a disappointment, whilst Uruguay and Paraguay are talented, adaptable teams that have proved that a nation need not have a large population to create an impressive football team. The contrast with the traditional powers of European football could hardly be more comprehensive. The Netherlands and Germany are perhaps the two Western European teams most immune from criticism. The former were the first team to secure qualification for the second round of the competition, albeit unimpressively, whilst Germany dismantled Australia before succumbing to a particularly incompetent refereeing performance and an underrated Serbian team. Spain are extremely impressive in terms of retaining possession yet look tactically limited and surprisingly toothless. England, France, and Italy have been little more than a disgrace. Failing to achieve a good performance amongst them (and scoring only three goals in six matches!), the unpleasant triumvirate have all been exposed for what they are – overhyped, ageing (in the case of England and Italy in particular), and divided (France and England) squads playing some of the most negative, unimaginative football witnessed at this World Cup. France are almost certainly out, whilst England and Italy sit in precarious (albeit recoverable) positions within their groups. It would be a genuine shame should any of these teams make it through the group stage.

Whilst the relative fortunes of these two region’s football teams are somewhat interesting, it is the socio-economic context to these performances that perhaps offers an insight into a real power shift that extends far beyond football.

Ask any Argentine what they think of austerity measures and the IMF and they’ll most likely bristle at the memory of their country sinking into an economic shambles that was rescued through defaulting on the nation’s debt and, ultimately, telling the IMF where to go. As a case-study into why neoliberal economics and the IMF as a whole are fundamentally flawed concepts and institutions, one only has to look at Argentina. Paul Krugman, Joseph Stiglitz and any other respectable economists, i.e. those not slavishly following the laughably discredited ideas of Milton Friedman et al, all stress the inevitable economic decline precipitated by pursuing an agenda of fiscal-contraction in an economic downturn. Apparently this memo has not yet reached Western Europe. It’s hardly surprising – the greatest casuality of the global financial crisis has been, incredibly, social democracy. In late 2008, when sales of Marx were at their highest in years, and the state became the saviour of the financial system, this idea would have appeared preposterous. Instead we now see daily attacks upon the public sector, upon the ‘unaffordable’ welfare state, and, perhaps most ridiculously, upon the failure of “socialism” (with regards to the ousted Labour party in the UK). What the global financial crisis actually showed us was that 30 years of pursuing a neoliberal agenda and a minimally regulated financial sector were not sustainable. It is not the welfare state that is unaffordable but rather the current global financial system. Remarkably, Europe in general and the UK in particular, have decided that reducing their national budget deficits is the most pressing problem currently facing the region. Whilst financial institutions will always promote such a view, it is incredibly flawed. No real reform was made following the financial downturn and we remain locked within a crisis of capitalism. The Conservative Party’s ideologically driven economic medicine for the UK is to pursue an outdated and unworkable socio-economic system, with an inevitable rise in unemployment, poverty, rapid decline in health, education, and other public services, and an astonishing acceleration of inequality the result. When the next inevitable financial crisis arises this flawed socio-economic agenda will finally be exposed. The state will not be in a position to rescue the financial system and the general populace won’t enjoy the insulation they had from the deepest recession since the 1930s. Western Europe, and Britain in particular, faces an undignified and messy decline. Just as the England football team’s deficiencies have been hidden by an obscenely unbalanced and unsustainable domestic league model, often misguidedly heralded as ‘the best league in the world’, the UK economic system’s flaws were disguised by an obscenely unbalanced and unsustainable dependence upon a financial system beset by incompetence, greed, and panic. The Premier League began to lose a little of its lustre last year as some of its top talents fled to more appealing environments (a process set to continue this summer) and the subsequent decline in quality was notable.

South America has done things differently. The hardship associated with excessive neoliberal policies has shaped the current socio-economic agenda of much of the continent (Columbia is an obvious exception). The utterly reprehensible actions of the US both before but especially throughout the Reagan-era in the region has proved another powerful influence. Where Europe seeks to attack worker’s pay, conditions, and rights in general, Brazil has surged economically whilst led by a former prominent trade unionist in Luiz Inácio Lula da Silva. It could be asserted that many South American nations in general have willingly traded rapid economic (in terms of GDP) growth for a little more social harmony (and Uruguay certainly fits this model), yet their growth has exceeded that of Europe over the past decade (and has improved markedly following the abandonment of nominally neoliberal policies). The upshot of these varying economic trajectories is all too apparent at this year’s World Cup. Neoliberalism has left societies fractured, discontent, and greedy – qualities all too apparent in the play of England and France – whilst the social democratic model of Argentina, Brazil, and other South American nations, has created a unity and equality on and off the pitch. The contrast between the 2012 and 2016 Olympics should prove fascinating. The London games are likely to be held under severe budget restrictions with a demoralised population and the economic deterioration of the country all-too-apparent, whilst Rio de Janeiro should consolidate (following the 2014 World Cup) Brazil’s developing global prominence.

Pre-election special: Missing the Issue

This article is rather more impressive than a thousand other contemporaries discussing non-issues such as ‘Bigotgate’, immigration, and tv debates. We remain so far stuck within a crisis of capitalism we cannot regain perspective upon it. Too large to contemplate, too problematic to challenge.

The current farce at Goldman Sachs should shock us in to action, though not akin to the action taken with Greece’s economic woes – the wrong prescription from an institution with an almost unparalleled history of disastrous economic intervention, which will ultimately aid those who need it least.

The market remains largely unadmonished, unregulated, and propelled through flawed speculation. Staffed by over-privileged incompetents, the financial sector will fail again; only this time there’ll be no state to pick up the pieces, no protection from brutal levels of unemployment, no safety net.

On a wider scale, the neoliberal system has somehow remained despite overwhelming indications of its complete inability to work effectively. On a local scale, a Conservative Party victory on Thursday/Friday will tear apart the fabric of UK society for the foreseeable future. It doesn’t have to be this way – small victories for the left will save the global financial system. Listening to Krugman, Stiglitz et al can help to craft the widespread regulation that is so vital. Sustainable growth should be the aim.