From the TUC

It’s CDC – not our aid commitment – that needs to change

15 Sep 2010, by Guest in Economics, International

The wolves are circling CDC, the Department for International Development’s little known private sector investment arm that is supposed to be helping the poor in the developing world.

The Daily Mail has had a great run with its “snouts in the trough” stories about the excessive expenses and pay of CDC’s bosses. Although it’s Richard Brooks at Private Eye, especially in the latest edition, who has been the prime digger of so much CDC dirt – albeit stuck behind a blog-unfriendly subscriber wall. And the Parliamentary International Development Committee is tackling CDC in its current inquiry into DFID. Judging by the evidence in NGO submissions, CDC will be in for a torrid time.

We’ve set lose our own little wolf cub on them – a newly released report titled, “CDC: time to improve its poor effort”. For unions CDC is a sorely missed opportunity to help the poor. Despite having a war chest of public funds, CDC has no actual targets to reduce poverty. Instead, in its 2009 Development Review, it claims that companies it invests in employ some 733,000 people. But have these jobs been created because of CDC’s investment? Using CDC’s rule of thumb, I could fork out for a single share in Tesco and claim to be investing in a company that employs 1.1 million workers worldwide. And are these jobs helping people leave poverty? Were they already well off? Who knows…

And there’s even more to add to the charge sheet: CDC has the gall to defend the use of tax havens in the name of fighting poverty; and faces serious allegations of investing in corrupt companies.

Andrew Mitchell, the DFID Secretary of State, Andrew Mitchell has announced a review of CDC in the wake of this week’s scandals. It’s a long overdue move  – and one that needs to be comprehensive in scope and ambitious in its recommendations. Because the risk is that if DFID doesn’t get this house in order, then the aid bashers at the Daily Mail might succeed in buring it all down:

…In his efforts to cultivate a touchly-feely image, David Cameron promised to spare the DFID from cuts. But with every revelation about how our foreign aid budget is squandered, that pledge becomes ever harder to justify.

Cutting aid would be a disaster. Tens of millions of people, dumped into absolute dollar-a-day poverty by a global economic crisis they did nothing to cause, urgently need our help. And even a small amount of aid spent wisely can make a huge contribution. Workers in Britain agree, passing this motion yesterday on supporting international development at the TUC Congress in Manchester:

…Congress welcomes the commitment of the leading UK political parties to spend the UN target of 0.7 per cent of gross national income on aid and urges the Government to put that commitment into law without delay.

So DFID needs to defend itself against the aid-bashers, by showing that aid is being used wisely. Giving CDC a complete overhaul would be a good start.

2 Responses to It’s CDC – not our aid commitment – that needs to change

  1. Allan Bush
    Sep 15th 2010, 8:11 pm

    Why is the TUC concentrating its attention on spending cuts in England? When theThe English taxpayer subsidises Free university places, medical prescriptions and care for the elderly in Scotland; England will hopefully have more nuclear energy,its own off-shore oil aand gas resources, and more renewable energy resources coming on stream in sufficient time to replace Scottish oil and gas, so if the Scotswere to stomp off from the U.K. in a hissy fit who cares? We know they dislike the English already. so why would it matter if they dislike us any more?

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