Aid? Self-interest, more like

23 May 2018

Aid? Self-interest, more like

On Friday, Minister for Foreign Trade and Development Cooperation Sigrid Kaag presented her policy note "Investeren in perspectief", ('Investments in prospect'), in which she sets out her plans for development aid and trade policy. What was striking about this was that Kaag, who has in the past received high praise for her knowledge of her subject as well as her international experience, was obliged to stick within the neoliberal lines laid down by Prime Minister Mark Rutte's 'Rutte III' government.

The policy note clearly shows that self-interest is set to play an even greater role than it has previously. Aid to countries in which the Netherlands has little direct interest, for example because they are not a significant source of migrants, will see their aid phased out. From now on aid will go in the main to countries which are seen as presenting a threat to the Netherlands and Europe. As for other developing countries, more trade will be conducted with them, the idea being that their populations will share in the profits.

Yet it is well understood that free trade does not automatically lead to progress for the general population. The growth of world trade in recent decades has principally benefited a handful of multi-billionaires. This international elite reaps the rewards of the bulk of trade and investment agreements, the markets which have been 'unlocked' and the sectors which have been privatised. Since the 1980s the wealth of the 1% has steadily increased. They now own more than the rest of the world put together.

Admittedly, the difference between countries have indeed been reduced, since the population of every country which participates in the international trade race numbers its own tiny group of winners and enormous group of losers. Kaag acknowledges this disturbing development in her note, but her plans appear little affected. She admits that inequality has increased overall and that prosperity resulting from globalisation has accrued only to a limited section of the population. “Globalisation and technological developments have a major impact on the labour market,” she writes, “and thus on jobs in the Netherlands and world-wide. Without action these developments will mean a further increase in social inequality.” There is no reason to believe that globalisation will proceed differently in developing countries from how it has in the past.

Multinationals, including those based in the Netherlands, contribute to inequality in developing countries. They pay local workers too little or make them work under conditions which we in the Netherlands would never accept. Take Heineken, that according to recent research pays young women so little to promote their product that they are forced into prostitution in order to survive. Or the textile industry, which is still unable to guarantee that our clothing isn't being produced by children.

In fact, for corporations low labour costs are often the most important reason to relocate production to developing countries, despite the appalling conditions on which those costs depend, and despite the fact that a living wage forms one of the international labour standards included in the Universal Declaration of Human Rights.

Although the minister's note contains a cautious reference to a fresh UN treaty imposing binding rules on multinationals regarding respect for human rights, there is virtually no reference to abuses committed by Dutch firms.

The irrational faith that Kaag places in the ability of multinationals and free trade to reduce inequality is worrying, as are her efforts to make money from the sustainable development goals (SDGs). “The relations which the Netherlands has with developing and emerging countries are turned to good account in unlocking markets for Dutch businesses,” as she puts it in her note. This sums up her policy in a single sentence.

Reducing inequality is one of the seventeen SDGs to which the United Nations, and thus the Netherlands, have committed themselves, but if this is the way in which it is to be pursued, it won't be achieved.

It's clear that development aid, with a budget of over €4.5 billion will, under Sigrid Kaag, be no more be aimed at the construction of just economies in countries which have most need of them than it was under her predecessors. Apparently, the government needs that money for other matters, such as reducing migration and combating terrorism.

These are at least as important goals, but the poorest will question the use of development money to pursue them. The lack of international solidarity, begun under Rutte's second government, is simply continuing under his third.

This article first appeared, in the original Dutch, in the daily national newspaper Het Parool on 23rd May. Mahir Alkaya is a Member of Parliament for the SP.

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