What is the problem?

Aid is not the answer to global poverty. Fighting the structural causes of poverty such as unfair trade and excessive corporate power is far more important than pushing for more aid. But that doesn’t mean we can afford to ignore aid, especially when it is being used precisely to increase corporate power and entrench unfair trade.

Our research shows a worrying trend within the Department for International Development (DfID) towards prioritising the interests of the private sector and seeing aid as something that should serve the UK’s national interests.  

UK overseas aid is currently backing tax breaks for multinationals like Nike, Reebok and Walmart, and promoting public-private partnerships, a model that has attracted much criticism within the UK, as a one-size-fits-all solution to the provision of health, education and new infrastructure in the global south. 

For example:   The World Bank’s Bangladesh Private Sector Development Support project has received £11 million from DfID. The project provides technical expertise to the Bangladeshi government in the creation of ‘special economic zones’, also known as ‘export processing zones’ (EPZ).  EPZs are essentially mini-tax havens for multinational corporations which allow companies ten year tax ‘holidays’ and ban workers from joining trade unions.

A look at the companies who have factories in existing Bangladeshi EPZs reads like a who’s who of multinational clothes manufacturers – Nike, Reebok, H&M, Gap, Walmart, Adidas, Mothercare. The sad fact is that UK aid money is working to secure the right of multinational companies to pay unskilled workers an average of less than £1 a day and get tax breaks and subsidised land thrown in.

UK and World Bank support for the establishment of new economic zones has the potential to do much damage in Bangladesh. The restrictions on freedom of association and trade union rights envisaged for these zones are especially concerning. It is also unclear what compensation will be given to local people if their land is used for these new zones as Bangladeshi law allows the government to forcibly confiscate land if this is in the national interest.
-Khorshed Alam, Alternative Movement for Resources and Freedom