Should a Struggling Britain Really Be Giving a Prosperous India Foreign Aid?

After the British general election of May 2010, the newly formed Conservative-led coalition government ring-fenced two departments from inevitable spending cuts. The National Health Service (NHS) was the first. In a coalition government this is understandable. The NHS is a sacred cow in the UK, and cutting it in such a volatile political environment would be risky. The other department was the Department for International Development (DFID). DFID accounted for $12.1 billion of the over $1trillion 2010-2011 budget, compared with the NHS’ $167 billion. The UK should heed the increasing calls for the international development budget to be cut, especially when there is such economic hardship domestically. India is a strong economy that does not require British foreign aid — aid which is over sentimentalized because of the history between the two countries. 

There are others who would also welcome the abolition of the UK’s aid, such as Indian journalist Rahul Bedi, who wrote a piece in the Daily Mail in which he highlighted how patronizing and counterproductive the aid can be.

What Bedi’s piece reveals is that the Indian government and Indians more generally hold similar views that the British government should consider.

It is an often-heard complaint that international development serves only to tax the poor in order to help the rich abroad. It seems that this certainly true in India. Corruption in India is endemic, and much of the money allocated to India from the UK’s international development budget goes missing, never reaching its intended recipients.

There is, of course, an interesting historical irony here, which is that India, once a major part of the British Empire, is performing very well compared to the UK. The UK has minimal economic growth, while India is the world’s second largest economy, and home to billionaires and millionaires, some of whom have been investing in British businesses for some time. The historical background provides not only ample irony, but also diplomatic awkwardness.

The Indian Finance Minister Pranab Mukherjee has said that, “We do not require the aid. It is peanuts in our own development spending.” When the finance minister of a country you provide money asks you to stop the assistance, it is probably wise to do so.

However, the Indian government is unlikely to ask this, as to do so would be embarrassing to the coalition government. DFID still runs based on a delusional economic theory based on a colonial mindset. If there is going to be a change in the UK’s Indian international development budget, it will come from London, not New Delhi.

It is ridiculous that given the current economic situation, western countries are not more willing to seriously reconsider their international development spending, especially when some of that money is going to countries where it is not needed. It does very little except to either further humiliation or spread corruption. Private philanthropy has a much better track record of delivering results than government funding does. If America and the rest of the West were to entrust philanthropy to private citizens, we would see not only an alleviation of suffering, but an added incentive for developing nations to reform their political class.

Photo Credit: Atanu Ghosh

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Matthew Feeney

Anglo-American currently working as Assistant Editor of Reason 24/7 at Reason.com. Before coming to DC I worked in London at the Institute of Economic Affairs and at the headquarters of the Liberal Democrats. I write mostly on economics, civil liberties, and foreign affairs.

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