Bye bye Anglo-Hindi bhai bhai?

In a move that will surprise few given the extent of planned cuts in UK government spending the new Secretary of State for International Development has announced that the UK's bilateral aid programme will be rationalised. While the overall level of aid spending will increase, to the 0.7% of GDP most rich countries agreed to in the 1970s, the Department for International Development (DFID) will reduce the number of countries it provides with assistance. The increase in spending is politically expedient for a government that has declared itself serious about tackling poverty in the UK and abroad, and fought the recent election on this basis, and in this new 'age of austerity' prioritising, targeting and focusing on results will be buzzwords for ring-fenced budgets.

 

This approach is clearly sensible; bilateral aid should be spent on the poorest people in the poorest countries, and in ways that enable those people to bring about lasting positive change in their lives. However, carrying out this rationalisation of DFID's work will prompt some tough decisions. Excluding Russia is easy, it is after all part of the G8 club of rich countries. China also seems an obvious choice because it has already made significant progress in human development terms, achieving high life expectancy, adult literacy and primary school completion rates, and low child mortality in recent years. China still has chronic poverty, with 16% of its population living on less than $1.25 a day in 2005 according to the World Bank, but few would doubt the capability of the state to achieve further reductions without outside help. But which other countries must go? A focus on the poorest will mean assistance coalescing around the countries of Sub-Saharan Africa and those elsewhere, such as Nepal, Cambodia and Bolivia, which count among the least developed. This will mean the exclusion of lower middle income countries, including, perhaps, India?

 

A case could be made for curtailing technical assistance to this South Asian giant, to free up funds (£297 million in 2008/2009) for economically and politically dysfunctional states that really need the help. India is after all an industrialising country with a stable, democratic system of government. Any foreign observer taking in the shopping malls, multi-screen cinemas and luxury jewellery stores on show in India's sprawling cities will have sympathy for the Indian Home Affairs Minister Palaniappan Chidambaram's depiction (in an interview with Time magazine) of India as a country that has poor people but is not poor. The argument would be that India has the resources to tackle its poverty and that it has not yet mustered the will to wield these resources to that end is not a justification for UK aid. Indeed DFID may struggle to justify spending UK tax payers' money on assistance for a country that has its own space programme.

 

But ending UK assistance to India on this basis would be a mistake. Yes, the Government of India could do more with its own revenues (and hopefully will), but this will not happen overnight. Precisely because India is a stable democracy, where national priorities are subject to the push and pull of contests for political power, change happens slowly. Moreover, if the UK wants to target the poorest people in the developing world India is a good place to start. Official Indian estimates of poverty are lower than the World Bank's, but even the conservative estimate of approximately 300 million poor means almost 1 in 3 of the billion people around the world who do not get enough food to eat each day are Indian (India's official poverty line relates to calorie intake). Thus significant reductions in Indian poverty are also significant reductions in global poverty. At the same time although India is classed as a 'lower middle income' country by the World Bank, its human development indicators point to problems translating economic growth into poverty reduction: life expectancy, adult literacy and primary completion in India are all well below China, while child mortality is higher. These are all reasons for the Indian government to do more, but also justification for continuing UK assistance to support Indian efforts.

 

Whether India is imagined as a non-poor country with lots of poor people, or a poor country where an increasing number are well off, further poverty reduction is needed. We will know by the autumn whether efforts to achieve this reduction will continue to involve the UK as a partner or if it is to be 'bye bye'.

 

 

 

 

 

 

 

Slum clearances in world class Delhi

The Municipal Corporation of Delhi's website boldly claims to be "Bringing MCD closer to the Citizens". For some of those living in slums in the sprawling Indian capital the municipal government may have gotten too close for comfort. For several years the government has been carrying out slum clearances in preparation for the city hosting the 2010 Commonwealth Games, moving families out of their makeshift housing on marginal land, and clearing the settlement areas for construction work. Land is needed for sports venues, and for the infrastructure (improved sanitation and water supplies, more frequent electricity supplies and better roads in particular) that will demonstrate that Delhi is a "world class city". The MCD has stated clearly that 'world class' also means slum free.

 

According to a BBC report of October 2006 at least some of those evicted from their homes have been relocated to new housing built to accommodate them, but relocation means children moving schools and parents forced to find new work or commute for long distances. These families may be lucky, as others are reported to have lost out on replacement accommodation and simply moved on to other slums or wasteland elsewhere in the city.

 

If the MCD is failing to provide appropriate housing for evicted slum dwellers it would be replicating the shortcomings of Mumbai's municipal government, which has a woeful track record of providing for its low-income citizens, let alone the poorest among them. In the last twenty years the Municipal Corporation of Greater Mumbai has overseen the construction of many more luxury apartments than affordable housing units even as millions continue to live in crowded and poorly serviced slums in the city.

 

Despite legislation it enacted in the 1970s specifically to address the housing needs of the poor, the MCGM has largely ignored the massive need for affordable housing in Mumbai. The official slum rehabilitation programme has provided housing for some ex-slum and pavement dwellers following clearances, but this small scale supply barely meets demand.

 

In both cities municipal authorities have cleared slums and relocated their inhabitants largely only when they have needed the land underneath the settlements. The provision of properly constructed housing that families on low incomes could afford has been so inadequate in both Delhi and Mumbai that any rehabilitation programmes have been seen as a victory by slum dweller supporting non-governmental organisations.

 

Sheila Dikshit, Delhi's Chief Minister, may want to create a metropolis that impresses the world, but unless urban renewal in Delhi meets the needs of all its citizens it will risk creating a capital that only a minority will feel proud of.

 

 

 

The impact of corruption in Sub-Saharan Africa

With a degree in business innovation and enterprise Suzanne symbolises the hopes and aspirations of Sub-Saharan Africa, a region more commonly associated with poverty, conflict and famine. And yet the ambitious twentysomething also represents a problem for the region: the largely one-way flow of talented students and skilled professionals to Europe and North America from African countries.

Suzanne left her home city of Dschang in Western Cameroon to study at Oxford Brookes University in Britain, but chose to stay on after graduating and now works in London, having been in the country for nine years. The International Organisation for Migration would argue that her example is far from exceptional, as every year thousands of students and qualified managers, accountants, engineers and teachers leave Africa and settle abroad, looking for a better quality of life and higher wages. These students and highly skilled migrants do contribute to African economies, sending $21 billion (£13.6bn) home in 2008 according to the World Bank, but it is their adopted homes which gain the full benefit of the migrants' skills and knowledge.

It is a lack of economic development in Africa that persuades many of those who can afford to leave to migrate elsewhere. African countries continue to struggle with the underdevelopment and weak economies bequeathed by their former colonial rulers at independence in the 1960s and 1970s. Although a majority of the region's thirty-five countries achieved growth in Gross Domestic Product (GDP), a standard measure of national productivity, of five percent or more in 2005 (approximately twice that of the UK in the same year) this was growth from a very low starting point. The region's combined GDP in 2008 was less than half of that of South Asia, a region which gained independence only about fifteen years earlier. What this means is little in the way of manufacturing or services sectors in many countries, and therefore few managerial or technical jobs for the tiny minority who complete higher education (an average of 6% across the region according to World Bank data). "The amount of people [in Cameroon] who are overqualified and out of a job is pitiful", says Suzanne.

This economic weakness, and the departure of scarce highly skilled labour it prompts, is puzzling when one considers the extent of Africa's natural resources. The Food and Agriculture Organisation, a United Nations agency, argues that although distributed unevenly across the continent, fertile land suitable for agriculture and water supplies exist in abundance. Africa also has significant supplies of fossil fuels, including natural gas, coal and oil. In fact West Africa, including oil-rich Nigeria, is the world's fastest growing supplier of oil. A wide variety of precious metals and valuable minerals are also found across the region, from copper to diamonds and bauxite (used to make aluminium). These resources should have been the foundation for booming economies in Africa, enabling investment in roads, railways, telecommunications and other growth promoting infrastructure.

That they have not been can be explained by the actions of Africa's leaders. With the obvious exception of the universally revered Nelson Mandela, African politicians have poor reputations when it comes to delivering transparent and accountable government. A 2009 survey of citizens' perceptions of corruption in their countries, by the NGO Transparency International (TI), places ten African countries amongst the worst twenty in the world.

Indeed many African governments have sought to gain personal profit from their countries' resources, using state-owned companies with monopoly access to natural resources to control national wealth for their own benefit. Large-scale domestic and foreign investment has been concentrated in these industries, providing high returns for those in power and excluding most citizens. Agriculture, "the backbone of overall growth for the majority of countries in the region" according to the FAO, has not benefitted from similar attention because in this sector the returns are disbursed throughout the population and harder for those in power to capture. The FAO estimates that 75% of the total land suitable for cultivation in Sub-Saharan Africa, which could provide incomes for many millions of poor and middle-income Africans, has yet to be farmed because of a lack of investment.

At the same time governments throughout the region have overseen the expansion of petty corruption throughout the societies they govern. TI's 2007 Country Study Report for Cameroon argues that corruption "affects public contracts, insurance companies, customs and taxes, the army and police, justice, electoral processes and more". Less than 50% of those the NGO surveyed in Senegal in 2009 said they had not paid a bribe of any amount in the last twelve months. When this pervasive the demand for bribes is a hindrance to productive economic activity, freezing out entrepreneurs who cannot afford to pay and putting off many would be small-scale investors.

Western governments have criticised their African counterparts for the corruption that has undermined economies in the Sub-Saharan region. They have emphasised the need for African leaders to promote "good governance"; more effective and inclusive government that is transparent and accountable. However, as TI point out in regard to Cameroon, "it is at the level of the central administration, which should in fact be implementing good governance, that the plague of corruption is the most widespread".

This is bad news for Suzanne. Unlike many others in her position she has no intention to settle permanently outside Africa. Instead she is planning to return to Cameroon and set up a business helping local companies to prosper. "People come to Europe with the idea of settling and not going back. They do not think maybe if [I was] investing in Africa my younger brothers and sisters would not have to encounter the same difficulty I have, because if I go back and invest I am creating jobs". It remains to be seen, in light of the problem of corruption big and small, whether she herself will prosper once she returns. It will not be easy unless the government starts to change its practices and sets a different example for society to follow.