Where does DFID's money go?

This year, for the first time, the UK government will devote 0.7 per cent of Gross National Income to foreign aid, finally meeting the target set in a 1970 UN General Assembly resolution. The budget of the Department for International Development has leapt from £8.8 billion in 2012 to £11.5 billion for 2013, about £183 per UK citizen. A report by Jonathan Foreman for the right-wing think tank Civitas has criticised the arbitrariness of the 0.7 per cent figure, and there has been a raft of scandals involving overpaid consultants, private equity firms and a lack of transparency at DFID last year, but the place of foreign aid in British politics appears assured. The big question, though, is who to give the money to.

Most West African economies are too small to absorb much cash. India, Nigeria and Kenya are becoming awkwardly well off. Uganda, Tanzania and Mozambique have small populations and serious corruption problems. The Democratic Republic of the Congo is in turmoil, and Rwanda’s backing of rebels in eastern Congo has led to its aid being suspended. When the coalition government conducted a review of aid spending intending to focus on only a few countries, Ethiopia came out top by a long way. Spending on Ethiopia will rise from £240 million in 2010-11 to £390 million in 2014-15.

The attraction of Ethiopia is twofold. At 85 million, Africa’s second most populous country has, in the words of a DFID official, ‘the largest market’ of poor inhabitants. And the government may be ruthless but it appears to get things done and has made progress towards some of the UN’s Millennium Development Goals. Thus, a bit like the bond market in a time of austerity, Ethiopia has become oversubscribed. This, in turn, has created curious pressures on DFID’s programmes there.

In 2005, when Tony Blair entertained the late prime minister Meles Zenawi at the G8 Gleneagles summit, Zenawi’s security forces mowed down nearly 200 demonstrators and jailed thousands of opposition members who objected to his rigging of the recent election. Financial support to the government was briefly suspended but restarted six months later under a new name, Protecting Basic Services (PBS). Worried about Zenawi’s dictatorial tendencies, donors created a ‘Democratic Institutions Programme’ to support an ombudsman, a human rights commission and a revamped national elections board.

When the elections board pronounced Zenawi’s party the winner (by 99 per cent of the vote) in the 'free and fair' 2010 general elections, the DIP, and the money, continued as before. When a 2010 Human Rights Watch report (full disclosure: I wrote it) described how government services funded by DFID through PBS were used as weapons to starve, intimidate or reward people into supporting the ruling party, DFID not only failed to investigate but claimed the problem did not exist.

In 2011, the Zenawi government began its most audacious authoritarian move yet, the collectivisation of 1.5 million people in model villages the better to provide them with the basic services PBS pays for. DFID denied that it was funding the so-called ‘villagisation’ programme. But a recent UK case brought by an Ethiopian refugee living in Kenya, Mr O., alleges otherwise and has led to the release of internal DFID assessments (more here). These clearly show DFID-funded local government officials implementing the programme which, according to Human Rights Watch, has resulted in forced relocations, beatings, hunger and insecurity.

You might have expected DFID to pause at this point. But the same month as Mr O. launched his case in London, while many other nations stayed their chequebooks, DFID pledged an additional £480 million to PBS’s third phase, outstripping even the World Bank whose independent Inspection Panel was concerned enough to launch an investigation into the links between its money and the villagisation abuses.

DFID commissions academic report after report into Ethiopia’s progress towards the MDGs, but sent a few staff twice to conduct brief surveys of the villagisation programme while claiming it cannot substantiate allegations of rights violations. Spending money ethically and effectively takes resources, and requires caution. But with ever more pressure to disburse coming from above, uncomfortable checks and balances are likely to be swept away by the force of that virtuous 0.7 per cent.