Britain’s foreign aid is utterly stupid

Poverty #5 650

One of the most amazing successes of my lifetime has been the immense increase in wealth in the world. All generated by the wonder that is capitalism. And whilst the rich have got richer, so have the very poor. You can see in the graph above how capitalism in countries such as China, Singapore, Hong Kong and South Korea has taken them from grinding poverty to being rich. Countries such as India, afflicted with the disease of socialism, have done less well. And the very badly governed countries in Africa have done very badly indeed.

This is what real hunger and poverty look like
This is what real hunger and poverty look like

0.7% of the UK’s gross national income (GNI) is ringfenced for international aid spending. This equates to about £12 bn a year. A lot of money. And when you realise that we have a budget deficit this means that the British government is borrowing money that it then gives away!

So where is all this vast wealth going? Here is a clue:

Foreign aid

Impressive, isn’t it? In Germany there is an organisation called Transparency International, which monitors corruption in the world. Here is their 2014 map and list. You can see it full sized here.

Transparency International 2014 650

So, as you can see, Britain is borrowing money to throw at some of the most venal and corrupt regimes in the world. Here is why this is very wrong:

  • All the countries in the world which have made great advancements have done so by using capitalism, free markets and trade. Thatcherism works.
  • There is zero correlation between giving aid to a country and the people there becoming less poor. There is 100% correlation between more capitalism and less poverty.
  • A few of the countries we throw money at have nuclear weapons and space programmes. We are effectively financing these.
  • Many recipient countries are undemocratic. They are run by very rich, venal, corrupt ruling elites who are experts at extorting aid money and who have the power to do so. Our aid ends up paying for palaces, private jets, luxury London homes and fleets of prestige cars. We have zero control over this corruption, we would need an infinite number of aid civil servants in order to exert any control.
  • The EU, with its trade protection rules, works to keep the world’s poor in poverty. This is malicious because it is only by trade that they can advance. Relaxing EU trade rules would do vastly more to alleviate world poverty than increasing our aid a thousandfold.

Here is an interesting and unsurprising chart. It shows the high correlation between aid and corruption. When you think about it this should be no surprise, when there is free money going round people are going to be corrupt to get their hands on it. In other words aid is the problem, not the cure.

Aid 2 650

Now let’s look at what the Irish musician Bono thinks. He is an expert on poverty and aid having visited the world’s poorest places many times,  he co-founded DATA, EDUN, the ONE Campaign and Product Red and received an honorary knighthood partially for his humanitarian work. So he knows what he is talking about.

Poverty Bono 650One really great glimmer of hope for Africa has been the huge economic advances that smart phones have recently brought to the continent. I have written about this before, here. Once someone has a smartphone they have access to all the world’s information. Accurate medical information is always at hand. Markets work far more efficiently, they know what to grow and when, what is the best price for seed and fertiliser, they can find buyers and know the selling price. Reliable weather information is available instantly as is political news from multiple uncensored sources. Smartphones have become the main banking device in many places. For many in Africa the transformation has been like having an operation to restore their sight. The huge potential of the continent is being unlocked. Everything works better.


And finally I don’t want to give lots of specific examples of our aid being wasted. Google will bring up many hundreds for you very quickly. And these are just the ones that have come to light. The reality is that our aid programme is doing harm around the world and also harm in Britain, where it is increasing our deficit. It is amoral and we must stop it now. Instead we must work to increase capitalism, markets and free trade.

Aid #1 650

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