Can UK Government Foreign Aid be Better Allocated to help Britain?
By Dr Vince Hooper. Director of Masters Programmes in Global Oil, Gas and Shipping, Department of Applied Engineering and Management, Faculty of Engineering and Science, University of Greenwich, Chatham, ENGLAND.
The issue of UK Government Foreign Aid is contentious amongst voters because of the lack of democratic frameworks in place to disburse tax-payers money. This is often extenuated by the fact that a small proportion of funds often ends in good hands or where it was originally destined and can end up propping up illegitimate ‘crony’ regimes in far flung emerging economies. Even strong economies like China and India who have vibrant space programmes have been major recipients of UK Foreign Aid. Thus, alongside important issues like Brexit, the British government needs to readdress the question of How can Foreign Aid be better allocated? The idea of this article is thus to propose some directions on how this may be achieved.
First, greater co-ordination needs to be acted upon so that the various aid agencies, NGOs Non-government and public sector organisations, charities and local participants need to come together so that they do not duplicate each other’s roles. An internet framework based on social media would be beneficial so knowledge can be shared accordingly about specific project aims, outcomes and monitoring.
Second, greater accountability and transparency needs to be adopted at every stage of funds disbursement so that corruption is minimised, whilst simultaneously reducing bureaucracy. The Foreign Aid budget is currently viewed rightly or wrongly by many as the UK’s Bribery Account. This tarnished image needs to be redefined. As the World’s 5th largest economy Britain should not be supporting repressive and corrupt regimes, though currently we do.
Third, we should only give foreign aid if it benefits British companies or entities. Thus, a condition of Foreign Aid should be that a foreign recipient should engage a UK individual, SME Small to Medium Sized Enterprise (limited company), Professional Body, College or University in the running of the project with clear guidelines on how funds are to be used. Indeed, the UK government could allocate funds to say every UK University and College to be allocated for foreign aid purposes up to £4 billion of the £12.2 billion we spend on foreign aid per annum. Virtually every college and university in the land has projects that would benefit the third world.
Fourth, the UK Government could use Foreign Aid in conjunction with debt relief through the usage of debt for equity swaps. We should convert emerging economy/third world debt into UK Government held equity in specific overseas projects that is then ‘loaned’ to UK based private equity firms (and possibly the overseas emerging economy stakeholders) that help bring much needed skills, technological know-how, managerial expertise and so on to emerging economies. Everyone is a winner. The recipient country gets debt relief, foreign aid has the potential to be better allocated, private equity firms have a guaranteed source of funds and much needed technological updating in the emerging economy can occur. In addition, when the private equity firm/venture capitalist decides to exit from the project, perhaps in the form of an initial public offering, the shareholders i.e. the UK Government, emerging economy local participants and private equity firm are returned their original capital that can then be recycled in new projects. We could tender up to £6 billion for this purpose.
Fifth, we should not underestimate the great contribution that we can all make ‘in-kind’ to overseas countries without involving the exchange of money. This can involve donating unwanted items direct to emerging economies instead of putting them in charity shops. A recent report, highlighted that UK people hoard unnecessary items sometimes for as long as 30 years. Video-link and online learning could be used to educate children in third world countries. For example, an A’level student could tutor GCSE standard courses as part of their assessment. As this is ‘in kind’, it is cost neutral.
Finally, given the current down turn in the global shipping industry where transport costs are minimal, we could help solve the homeless situation in the third world (and this country for that matter) by manufacturing steel based containerized homes and shipping them overseas [https://uk.pinterest.com/indrek0348/container-house/]. This would help British Steel enormously, because they could receive a proportion of the current foreign aid budget in the prefabricated manufacture of homes. This could be extended to help build schools, surgeries and other essential services. £2.2 billion could be allocated for this.
The British public are currently considering the Brexit referendum in within a dense froth of spin and misinformation by both camps, remain or leave. The next important issue that should be considered is that of how better to allocate the current £12.2 billion budget more efficiently and effectively that benefits Britain economically and ensures a high rate of return on our grant aid which should be viewed more as a commercial investment, rather than a bribe.