Global Justice Now charges dodgy aid firm ‘exploiting poor’
THE government is planning to quadruple aid money given to a private equity company funding developments such as luxury hotels, shopping centres and expensive private fee-paying schools, Global Justice Now charged yesterday.
The campaign group accused the government of “inviting scandal” by increasing overseas aid money to private equity operation CDC Group plc, wholly owned by the Department for International Development (DfID), to £6 billion.
The group pointed out that most of the cash will be funnelled through tax havens and much of it would benefit private businesses with no evidence that the poor of Africa and Asia would benefit.
However the increase in resources is subject to the Commonwealth Development Corporation Bill, which Global Justice Now has submitted a briefing opposing.
The briefing states: “DfID is essentially asking Parliament to pre-approve increased funding for its controversial investment arm before presenting a worked-through strategy or plan for how this money will be spent and how taxpayers will be assured that it helps meet the official mission of this spending: ending global poverty.
“This raises serious concerns as this Bill could clear the path to a massive diversion of public aid money towards private businesses — without sufficient transparency, accountability or proof of impact.”
The briefing lists some of the projects being funded by overseas money via CDC.
They include private health centres in India, expensive fee-paying schools in Kenya, an upmarket shopping centre and luxury apartments in Kenya and palm oil plantations in the Democratic Republic of Congo mired in labour scandals.
The briefing also says 28 of CDC’s 38 investments since 2012 are located in tax havens, with no accountability for spending and little understanding of its impacts.
Global Justice Now director Nick Dearden said: “Since 2008 there’s been a series of reports that raise critical questions about CDC’s fundamental approach to using UK aid money.
“CDC appears to be throwing money at luxury hotels and shopping malls in countries in Africa and Asia, with — unsurprisingly — no evidence to show that any of this wealth is trickling down to the poor and marginalised communities who should be benefitting.
“Taxpayers are proud of the fact that the UK has made a strong, legal commitment to aid spending, but they would be horrified to see that money being used to shore up luxury developments rather than supporting real needs like robust public health and education services in the global south.”
The Bill is at the Committee stage.
The briefing recommends that the Commonwealth Development Corporation Bill is not passed.
It also calls for “DfID’s relationship with CDC be opened to a fundamental review as we do not believe that CDC is currently performing a justifiable role in the eradication of global poverty.” DfID did not respond to a request for comment at the time of the Star going to press.