In an article in the Daily Mail today, Peter Mandelson takpes a pop at the Labour Government’s aid policy. He says:
‘I’m not anti-aid, but if you ask me where I would put my money, it would go on trade rather than aid as a key to African economic development.’
Sigh. One of the most unthinking cliches trotted out by people who want to sound knowledgable about development is to repeat the tired old mantra that ‘trade not aid’ is the secret to reducing poverty. Sadly they’re just revealing how little they know - it’s a completely meaningless distinction.
Trade and aid are completely different things, and they’re not in opposition to each other. Companies trade, and governments give aid. The roles can’t, and probably shouldn’t, be merged. Aid can help trade – there’s no point in having the perfect trading system (something which Peter Mandelson conspicuously failed to deliver during his tenure as the EU’s trade commissioner), if you don’t have any roads to move stuff around the country, or people who can read, or people who are well enough to work. Trade won’t help you then, but aid might.
Governments can’t, as Peter Mandelson seems to be suggesting they can, ‘put money into’ trade – unless he’s suggesting, in a most un-New Labour way, that the government set up state-owned companies to trade with Africa. What they can do is to provide the sort of aid that can help economic development and therefore trade – a lot of which they’re already doing, like investing in education or in health. Given the uncertainties involved in the aid business, donors won’t always get it right. But silly slogans like ‘trade not aid’, are even less likely to help.