Development aid to India came under attack yet again yesterday as The Sun called for the government to spend cash on border controls instead.
Just over two weeks ago the decision by the Indian government to buy their latest gaggle of fighter jets from the French rather than the UK sparked outrage across the media. The UK provides India with some £280 million of development aid annually, and to be snubbed in this way seemed somewhat ungrateful to observers. I would be a lot more worried if aid the UK provides to India was given on the basis that they would buy their arms from us - wouldn't you? In fact it is a legal requirement not to tie aid and trade - as the Conservative government in 1994 discovered when the World Development Movement successfully challenged the conditionality attached to the funding of the Pergau Dam in Malaysia.
So, if we are not buying favours, why are we sending aid money to India? As has been (endlessly) noted, India has a booming economy, a space programme and more billionaires than the UK. In this context sending aid to India seems absurd. But India has a dark side, with some 600 million people living in dire poverty. This is more than there are in the whole of Africa and begs the question of why we believe Africa should get aid, but India should not? Surely we care about those 600 million people as people, and want to see them lifted out of poverty too?
There is an assumption inherent in the reaction to the debate about aid to India that India should be using its own wealth to solve poverty within its borders. But India is an increasingly integrated part of an increasingly globalised economy and much of its wealth depends on relations with other parts of the world. Growing inequality is a global phenomenon - fuelled by imbalances of power within and between nations. If we believe that economic redistribution is the solution within India, why do we not see that this should also be the case at a global level? This can be through aid and also through trade.
The European Union is currently developing a trade agreement with India, as part of a wider strategy known as Global Europe. At present this strategy is driven almost exclusively by a desire to open export opportunities for European business. But a window of opportunity does exist to think about such trade deals in a different way and to consider the extent to which such deals would create decent work in both India and in Europe. Such an approach could also contribute to reducing poverty and inequality.
While I strongly believe that specific trade deals should never be linked to development aid, I believe equally strongly that a link should be made between trade, aid and development. Trade and aid can be drivers of sustainable development: Fairtrade certification has demonstrated that, when poor farmers in developing countries are supported financially with development aid to become organised and are provided with an opportunity to tap into, and benefit from, global trade there can be a significant impact on poverty reduction at the local level.
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