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South Africa Row Sparks Debate Over Foreign Aid In Britain

South Africa Spat Sparks Debate Over Foreign Aid in Britaini
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May 03, 2013 6:42 PM
South Africa has criticized Britain's announcement that it will cut aid payments by 2015. The row has sparked a debate over whether foreign aid should be given to rapidly developing countries, at a time of austerity at home. Henry Ridgwell reports from London.
Henry Ridgwell
— South Africa has criticized Britain's announcement that it will cut aid payments by 2015. The row has sparked a debate over whether foreign aid should be given to rapidly developing countries, at a time of austerity at home.

South Africa is the newest member of the BRICS group of major emerging economies, alongside China, Russia, Brazil and India. South Africa's success is the reason Britain says it plans to end aid payments to South Africa worth $29.5 million a year.

South African Finance Minister Pravin Gordhan criticized Britain's decision in a speech at London-based analyst group Chatham House.

"Some intention to demonstrate some kind of fiscal probity here [in Britain], using South Africa as a guinea pig, I think is extremely improper and highly regrettable," Gordhan said.

Gordhan said the relatively small monetary amount is not the issue - it's the expertise that's important.

"South Africa is two societies in one. Yes there's a developed part of South Africa that doesn't need anybody's aid. But there's a developing part that the British government, through DfID [Department for International Development] could make a difference in. We don't need 19 million pounds [$29.5 million] a year. Fiscally we can manage that," Gordhan said.
 
That's a view echoed by ActionAid, a charity with its continental headquarters in South Africa. Its spokesperson is Melanie Ward.

"We're in this situation precisely because of the fact that aid works and development works. And so South Africa as a country has got richer. But still a lot of its people are extremely poor. One quarter of South Africans live on less than $2 a day," Ward said.

The diplomatic row has sparked a debate in Britain over whether countries with fast developing economies should still receive aid.
 
Last year Britain announced it will also end aid payments to India by 2015. The World Bank estimates that nearly 30 percent of India's 1.2 billion people live on less than a dollar a day.

But that's no reason to keep giving aid, says economist Fredrik Erixon, director of the European Centre for International Political Economy in Brussels.

"In fact, we have seen that foreign aid, rather, has preserved bad economic policies, bad economic institutions and bad regimes," Erixon said.

Erixon claims the laudable aims of aid agencies can be compromised on the ground.

"Receiving governments are not very happy of having foreign or international organizations operating inside their own country without them getting some piece of the pie as well," Erixon said.
 
Aid agencies have praised Britain for protecting its aid budget from spending cuts.
 
But with austerity measures biting hard elsewhere, there is much debate over whether the government should give more to its own citizens before helping others.

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