by Mark Curtis
Guardian, 9 July 2005
The government will try to pull off a PR coup in the aftermath of the G8 summit by posturing as Africa’s champion – hiding Britain’s real agenda and how agreements on debt and aid will further impoverish the continent.
While the G8 agreement commits the richest countries to increase aid and write off the debt of 18 countries, it requires developing countries to pursue a raft of free-market policies. The G8 is united behind this agenda, which Britain has taken a lead in pushing.
Gordon Brown’s new deal talks of the poorest and richest countries “each meeting our obligations”. Poor countries’ obligations are to “create the conditions for new investment” and “more favourable business environments” while “opening up trade”. Only in return for these will rich countries provide aid and debt relief and open up their markets.
One might think that countries where poverty kills thousands every day have no obligations towards the rich. But in the world of Brown and the G8, they are to help western companies make more profits by pursuing policies that have increased poverty and inequality from Ghana to Zambia.
The G8 and British goal of free trade for poor countries deprives them of levers to regulate trade for development and is a recipe for deep ening poverty.
New Labour appears to be keen on debt relief because it is a lever to reshape the global economy for the benefit of private investors. It’s a cheap strategy, too – last month’s G7 finance ministers deal cut in aid what countries got in debt relief.
The new deal was recently morphed by spin doctors into a Marshall aid plan. Brown told a Chatham House audience that this was “a smart business proposition: enlightened self-interest at its best … for the world economy to prosper and for the companies operating in it to have markets that expand, developing country growth is a necessity”. Without this, rich countries were “unlikely to maintain the growth rates we have enjoyed over the past 20 years”. Again, poor countries help western companies, at their own expense.
A March Treasury report on priorities for the UK presidency of the EU calls for “greater flexibility in product markets, labour markets and capital markets … a new approach to regulation and “taking a lead in multilateral trade liberalisation”. This is a strategy that would make Margaret Thatcher blush.
While Brown has been telling development groups of his commitment to Africa, he has given speech after speech on his pro-business policies. Last November, for example, he told the CBI that “rewarding enterprise is … central to a renewed British national economic purpose”.
Deregulation is to be applied globally. The white paper on trade states that “the UK government has a key role to play at the international policy level to ensure that … the UK can compete in global markets – a more eloquent rendition of former trade secretary Patricia Hewitt’s comment that “we want to open up protected markets in developing countries”.
The G8 and British goal of free trade for poor countries deprives them of levers to regulate trade for development and is a recipe for deep ening poverty. Brown’s only concession is that poor countries should have time to adopt such policies. Richard Caborn, the former trade minister, explained that this “is the message we need to hammer home if we are to get the developing world to agree to another round of WTO talks” – ie further opening of their markets.
Postwar planners never intended to allow African countries to be truly independent. After decolonisation, they sought to establish pro-western elites – like those who now welcome the G8 agreements – and impose indirect economic rule through levers such as aid.
Here is where aid comes in. The Foreign Office was not joking when it stated in a 1958 file that aid was “a weapon in the armoury of foreign policy”. The Department for International Development’s (DfID) recent document, Partnerships with Business, states that most aid recipients “are commercially important to the business sector, not just as export markets, but also for sourcing inputs and raw materials, for foreign investment and joint ventures … Business may become involved in the identification of key policy and regulatory constraints to the business environment.” DfID’s aid is “typically” used to “enable the private sector to invest with more confidence”. This explains why tens of millions of pounds go to British companies to force water privatisation on poor countries.
Africa needs less aid like this. And less debt relief, if it comes with these conditions. And less trade with rich countries, if it is forced to open up markets.
The basic aim of British elites has traditionally been to help companies get their hands on other countries’ resources. Secret 1960s files state that “we should bend our energies to help produce a world economic climate in which our external trade, our income from invisibles and our balance of payments can prosper”. The key was to protect sources of raw materials in the Middle East and southern Africa by promoting “freer” global trade and “increasing our efforts to open up new markets”.
Postwar planners never intended to allow African countries to be truly independent. After decolonisation, they sought to establish pro-western elites – like those who now welcome the G8 agreements – and impose indirect economic rule through levers such as aid. The Attlee government, which established the aid programme in 1948, drained millions from Africa to help Britain’s postwar recovery. Current development policies are ways to control nominally independent economies in a post-imperial world.
G8 leaders favour private business interests, and their agreement is a vehicle to facilitate the corporate plunder of Africa. Britain’s lead in this needs to be exposed and challenged.