Why on earth is cash-strapped Britain giving £1billion of aid to a country that can afford its own space programme?
The two biggest global economic success stories of the past decade have been China and India. Yesterday it emerged that China had overtaken Japan to become the second-biggest economy in the world after the United States.
But India is not very far behind. This year its economy is expected to expand by nearly nine per cent — between four and five times Britain’s projected growth rate. It grew by a similar amount last year, and the year before, and has been second only to China in its rate of expansion for several years.
India will have a larger economy than Britain very soon. Under some definitions it already has. According to one measure used by the World Bank, in 2009 India was the fourth- largest economy in the world, significantly bigger than the United Kingdom, which was in sixth place.
Reaching for the stars: India's maiden lunar mission Chandrayaan-1, or Moon Craft in ancient Sanskrit, took off in 2008
So why has the Government just changed its mind, and decided to give £1 billion in aid to India over the next three years, making in the largest single recipient of our largesse?
At a time of painful cutbacks we are giving a sizeable amount of money to a country which is probably already as wealthy as this one, and within a decade or so will be very considerably richer.
No one disputes that, despite its phenomenal growth, India still has countless millions of poor people, though many fewer than it used to have. Its population, after all, is many times greater than ours. But despite its challenges with poverty, it spends some £20 billion a year on defence, not much less than Britain, and is a nuclear power. It also splashes out about £1.5 billion a year on its space programme, a luxury which this country cannot afford.
Arguably India should be spending less on defence, and nothing on its space programme, and be diverting more funds to the alleviation of poverty. But the country is a democracy, and its government will be held to account for the decisions it makes. It is hardly our business if India wants to spend so much money on a space programme.
But surely it is madness for us to be channelling precious funds to a country which chooses to have prestige projects that are beyond our own means.
For a Coalition that has made a number of perplexing decisions, this one probably beats the lot. In this case, though, it is not the sometimes woolly-headed Lib Dems who are to blame. The buck stops with the Tories.
It was the Tories, not the Lib Dems, who decided that international aid should not only be ‘ring-fenced’ but increased by a third to £11.5 billion by 2015 while domestic budgets, apart from the NHS, are being slashed. This was a controversial decision in view of the ineffectiveness of much development aid, not to mention the corruption that sometimes surrounds it.
India, although a democracy, is by no means corruption-free. A report by the country’s auditor general, seen by the Mail last September, revealed widespread aid abuses, including wasting money on thousands of colour televisions and computers that were never used, and several instances of fraud amounting to millions of pounds.
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At a time of cutbacks I struggle to understand the case for increasing aid even to the poorest countries. In the case of India, I find it impossible to grasp why we should think it desirable to shell out £1 billion to the fourth- largest economy in the world.
Could it be post-colonial guilt? If so, it is misplaced. When Britain left the country in 1947, India was the 12th-largest industrial power in the world, and had the most extensive railway system in Asia. It was the semi-socialist policies applied for the next 40 years that held India back until free market reforms began to transform it.
By the way, on the subject of colonial guilt and blame, I bridled when last Friday President Barack Obama compared the successful Egyptian revolt against the monster President Hosni Mubarak with ‘Gandhi leading his people down the path of justice’.
Perhaps Mr Obama knows something I don’t, but I wasn’t aware that in the Twenties and Thirties the Raj employed a huge secret police force and used widespread torture.
If post-colonial guilt is not the reason for wild British generosity, is there perhaps a belief that the more aid we give, the more likely it is that India will do business with us?
Andrew Mitchell, the International Development Secretary, denied this was a motive during an interview yesterday morning on Radio 4’s Today Programme. I hope he meant it. India will trade with us if we are able to produce goods and services which its people want to buy.
More likely, there is an outdated sense that it is our duty to disburse funds to the supposedly less fortunate — rather like an impoverished parent continuing to subsidise children who have grown much wealthier, and are more than capable of getting by on their own. I suspect that giving so much money makes us feel more important than we really are.
The decision is so apparently senseless that it is almost impossible to unravel. What makes it more senseless still is that the Indian government has signalled that it would not object if British aid were ended. There would be no hard feelings. India can look after itself. One of its senior diplomats is reported by The Times as saying: ‘We will help if you want to withdraw.’
To judge by comments, Mr Mitchell is also hard pushed to explain why we are giving India £1 billion in aid. Last June, he hinted strongly that India was becoming too rich to warrant so much British money.
When asked yesterday how the aid could be defended, given that India spends so much on defence, he replied that it feels obliged to do so. Shouldn’t a Tory cabinet minister be thinking about Britain’s defence requirements — our defence budget is being cut by eight per cent — before idiotically seeking to justify India’s expenditure?
This country is being subjected to Draconian economies. Every penny of government spending is supposedly being examined. In such circumstances £1 billion is a very significant amount of money. Think of how many libraries it could save, or how many extra policemen on our streets it might pay for.
The Coalition is pursuing its overall objective of reducing the deficit with the utmost seriousness and determination. It has to be admitted, though, that there are areas of silliness. The decision to sell off some of our forests for very little, if any, gain is one such example. Giving India a further £1 billion in aid is another.
The tragedy is that such inexplicable anomalies undermine and weaken the whole process. What is a RAF trainee pilot facing redundancy to think when he sees £1 billion winging its way to India, a country as rich as our own, whose government says it no longer needs the aid?
Needless to say, I am in favour of the closest possible relations with India, and I look forward to the day, probably not very far hence, when it challenges America and China to be the biggest economy in the world.
But for God’s sake let’s stop playing the rich uncle when we are strapped for cash, and have so many obligations here at home.