New law gives £6bn to government’s private equity firm
THE Commons will vote today on a government plan to quadruple the amount of foreign aid money given to a private firm that will spend it on posh hotels and shopping centres.
The Commonwealth Development Corporation (CDC) Bill will hive off more of the overseas aid budget for luxury amenities in developing countries on the debunked ethos of “trickle-down economics” rather than directly helping people in need.
If passed by MPs, it will enable the Department for International Development (DfID) to increase the amount of cash available for these projects from £1.5 billion to £6bn, according to campaign group Global Justice Now.
It will also allow CDC Group, the contentious private equity arm of the British overseas aid programme, to raise the limit to £12bn without the need for another Bill.
The group, wholly owned by DfID, has been criticised repeatedly for supporting projects such as hotels, shopping centres, private healthcare and fee-paying schools in countries such as Kenya and India on the dubious grounds that they would help lowincome communities.
Other free-market projects include palm-oil plantations in the Democratic Republic of Congo that have fail to provide decent wages and conditions for workers.
Twenty-eight of CDC’s 38 new investments in funds since 2012 have been squirrelled away in tax havens in Mauritius, the Cayman Islands, Guernsey and Luxembourg, Global Justice Now said.
Global Justice Now aid campaigner Aisha Dodwell said: “Report after report has raised some very fundamental questions about whether the CDC Group’s efforts to build shopping malls and luxury hotels across Asia and Africa are doing anything to address conditions of poverty and inequality.
“While the CDC Group might be good at returning on investments, its falling a long way short of meeting basic development goals like raising people out of poverty or providing access to basic public services like education and healthcare.”
Global Justice Now is calling on Parliament to present a strategy of how the money will be spent and how taxpayers can be assured that the cash will help end global poverty.
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