Where Aid Meets Trade – Ireland’s role in the changing development landscape in Africa

This paper sets out to examine Ireland’s changing relationship with Africa. The paper first examines current trends in international development towards a greater focus on private sector engagement. It then asks to what extent Ireland is following these trends in its engagement in trade and development in Africa. The following are some of the key insights provided by the paper. Globally, there is a re­emergence of economic growth as the perceived primary driver of development. At UN, EU and individual donor country level, there is a clearly increased focus on economic growth to enable development, calling to mind the 1980s Washington Consensus policies, which so clearly failed to address human poverty and avert debt crises, leading to the 1980s being dubbed the ‘lost development decade’. The 1990s and 4 2000s saw a shift away from purely growth­led policies, emphasising the importance of social advancement and human rights based approaches – and making considerable advances in human development as a result. However, the global community appears to be in danger of forgetting these lessons learned, as economic growth takes centre­stage in development policy once again. Economic growth does not automatically result in poverty reduction​. In Nigeria, the economy has grown at an impressive 6% per year for the past ten years, but its Human Development Index rating is at 152 out of 176 countries – eleven places lower than Irish Aid key partner country Zambia. The failure of economic growth to result in poverty 5 reduction is often rooted in inequality – rapid economic growth in a society with high income inequality often results in minimal poverty reduction, and greater inequality. Much 6 economic growth is jobless, and where employment is created there is a trend towards more vulnerable work. About 70% of male workers in sub­Saharan Africa are in vulnerable 4 See e.g. http://www.donellameadows.org/archives/a-decade-lost-when-there-isnt-a-decade-to-lose/ 5 UNDP Human Development Index 2014. 6 World Bank Group, Prosperity for All: Ending Extreme Poverty, 2014 Spring Meetings 3 forms of employment, and a staggering 85% of women. Why then do we see so many 7 references to the ‘miracles’ which the market­based private sector­led strategies can perform in developing countries? Why, also, is there such an emphasis on engaging with large Northern based companies, rather than with local business in Africa? There is a trend towards donors expecting that their overseas aid should benefit economic interests in their own country. ​Evidence of this is seen perhaps most blatantly in Australia and the UK, but also in the Netherlands, Sweden and Norway. This type of approach appears to have been sparked by the global recession, and is based on a perceived ‘win­win’ scenario – both donor and developing country will benefit from increased trade and investment. But, as the UK aid watchdog body has pointed out: ‘the private sector and markets are predicated on the idea of competition, which presupposes that there will sometimes be losers…A focus on private sector development may, from time to time, result in certain groups of the poor being worse off as a result of its interventions.’ 8

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