If Justine Greening wants to focus aid on poorer nations, why isn't she voting against World Bank loans to Argentina?

October 16, 2012 10:43 AM

This morning there are reports that Justine Greening, the new Secretary of State for International Development, is going to campaign for British taxpayers' money spent on aid through the European Union to be spent in poorer countries. The EU foreign aid budget definitely needs reform. We set out a series of potential reforms in an earlier report, Reforming European Development Assistance: Ensuring Transparency and Accountability, but it is sometimes hard to escape the conclusion that what is really needed is to repatriate policy so that decisions over spending are made closer to taxpayers. If that isn't possible though, here are the set of policies that we concluded would do the most to prevent abuse of European taxpayers' money in this area:

    • All grants and sub-grants made by the EU and its grantees should be stored on a public website if they total over €25,000 for an individual grantee. This will allow European citizens to effectively scrutinise how their money is spent.
    • All projects and programmes over €150,000 should testify before the relevant European Parliament Committee.
    • All recipients of European Assistance must sign up to a pledge that neither they – nor those they sub grant to – will encourage or promote violence, hatred or the de-legitimisation of any state. A proven breach of this would entail immediate cessation of financial support.

Those reforms would make a huge difference. But don't hold your breath waiting for serious reform from the EU.

If Justine Greening really wants to show that she is serious then she could act more quickly on international organisations sending our money to relatively fortunate countries. Argentina is not a particularly poor country. And it has been attacking the right of people living on the Falkland Islands to remain British. They have taken billions in loans from the World Bank and affiliated institutions.

Other countries, such as the United States and Spain, are voting against further loans. But so far our Government are still making decisions on a "case-by-case" basis and have only abstained on some proposed loans. Until Justine Greening makes it clear she will join those voting against World Bank loans to Argentina, it is hard to take this pledge to focus resources on the poorest countries seriously. If you want to help put pressure on the Government to vote against the new loans, please sign the petition at StopFundingArgentina.org.

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