Health Poverty Action – Written evidence (ZAF0024)

 

Health Poverty Action

  1. Health Poverty Action is an international NGO that acts in solidarity with health workers, activists and communities worldwide to improve health and challenge the causes of poverty. We currently work across eighteen countries in Africa, Asia and Latin America, including Ethiopia, Kenya, Namibia, Rwanda, Sierra Leone and Zimbabwe in Sub-Saharan Africa (SSA). We welcome the opportunity to submit evidence to this inquiry exploring the UK's engagement with the SSA countries. We respond in particular to the following priorities outlined as the focus of the inquiry; driving prosperity and, promoting and protecting an equitable and inclusive rules-based international system’.

 

Addressing the underlying causes of a lack of prosperity in SSA

  1. SSA has some of the highest rates of extreme poverty in the world. According to the most recent data available from the Multidimensional Poverty Index, there are over 400 million people living in poverty in SSA, representing over 30% of the multidimensional poor in the world[1]. However, SSA is not a resource poor region. It is rich in natural resources, skilled workers, new businesses and biodiversity. One of the challenges is that many people living in the region are not able to benefit from these resources, in part because they are being extracted by those outside of it, often by, and for, the benefit of wealthier nations.[2].

 

  1. In 2014 and 2017, Health Poverty Action and our allies calculate these financial outflows from the region. The most recent figures available demonstrate that in 2015, $203 billion was extracted from SSA annually. This is either directly – mainly through corporations repatriating profits and by illegally moving money out of the continent – or by costs imposed by the rest of the world through the climate crisis[3]. This amount is more than is needed annually to ensure a healthy and full life for all citizens of SSA[4].

 

  1. Furthermore, this research demonstrated that the amount of money being extracted from the region each year far outweighed the amount of money going in to SSA through aid and other inflows. Figures from the 2017 report showed that while $203 billion was being extracted, only $161.6 billion was coming in to the region, leaving SSA with a net annual deficit of $41.3 billion[5]. This demonstrates that we cannot ensure prosperity in the region through the continuation of current relations as they are – primarily aid, loan making and investment - we must also address the wealth that is being extracted from the region and the unfair enaction of power by global north governments, institutions and companies within the international system that enables this. The table below demonstrates these flows and the net annual deficit calculated

 

 

  1. The role of the UK Government in enabling and benefiting from these financial outflows in multiple ways, must be recognised. For example, a large proportion of the money extracted from SSA through ‘illicit financial flows’ comes from tax evasion and avoidance[6] - the British government bears special responsibility in this regard since collectively our Overseas Territories and Crown Dependencies form the largest network of tax havens in the world[7]. Other examples include; the UK Government and UK private companies benefitting from loan repayments made by SSA countries as a result of increased loan making following the global debt crisis of 2008[8]; the NHS greatly benefitting from the high number of skilled health workers that come from SSA countries at cost their own national health systems[9]; and the costs to SSA for mitigating and adapting to a climate crisis that they contributed to very little in comparison to others[10].

 

Truthful representations of the UK’s relationships with SSA

  1. This evidence transforms the traditional view of our relationship with SSA from one of where the UK is portrayed as a generous benefactor helping the world’s poor through our aid, loan making and investment, to a more truthful one where SSA is actually aiding us at the cost of the lives of the people who live in the region. The nature of this relationship dates back to European colonialism and the British Empire, yet despite the long standing nature of this relationship, it is not widely understood by the British population (for example, the majority of the UK public see the causes of poverty as intrinsic to those countries[11]) and the story of the UK ‘aiding’ SSA is still perpetuated today within mainstream society.

 

  1. The perpetuation of this false narrative is damaging to achieving the goals of Agenda 2063 for several reasons. Firstly, it acts as a smokescreen distorting and hiding the true reasons for a lack of resources in the region – namely, the current structure of the international system that allows for extraction of wealth and resources, and the role the UK Government plays within this. It also portrays people in SSA, and others living in poverty, as poor and reliant on our help. This entrenches damaging power dynamics in favour of the UK, serving to further undermine the Agenda 2063 goals which have within them a strong sense of African Cultural Renaissance.

 

 

 

 

UK Aid

  1. Despite it being clear that we need to move beyond aid to ensure prosperity in SSA, aid still plays an important role in ensuring healthy lives and prosperity for many in the region. The official role of the UK Governments’ Department for International Developing (DFID) is to “work is building a safer, healthier, more prosperous world for people in developing countries and in the UK too”[12]. However, in recent months the UK Government has “signalled its intention to use UK aid to generate economic and commercial benefits both for recipient countries and for the UK, referring to this shift as “mutual prosperity[13].

 

  1. There are a number of examples to highlight this such as the potential merger between DFID and the Foreign and Commonwealth Office (FCO)[14], the recent UK-Africa Investment Summit which cost £15.5 million in UK Aid money[15] and the increased channelling of funds through the CDC – the UK’s development finance institution. A recent report by Global Justice Now highlights the worrying investments made in the name of UK Aid through the CDC which invests through tax havens contributing to illicit financial flows, invests in fossil fuels contributing to the climate crisis, and fails to assess the development impacts of its work. For example, its impact assessment mostly measures the rate of return and the number of jobs created without a proper analysis of what kind of jobs are created and for who[16].

 

  1. As noted in a recent ICAI report, the move to “mutual prosperity” in these terms could result in; a lower share of UK Aid being allocated to the world’s poorest countries or poorest people, including SSA; economic growth for the UK and partner country business but not for poorer countries themselves; benefits smaller than what could have been expected through more ‘traditional’ aid; and the undermining of poverty reduction as a global development norm[17]. With these outcomes in mind, it is unlikely that the use of UK Aid money in this way will work to enhance prosperity for SSA countries and their citizens.

 

Recommendations

In light of the evidence given above, we make the following recommendations in order to successfully work with the African Union on the delivery of Agenda 2063

  1. Achieving mutual prosperity requires addressing the unfair balance of power and mechanisms embedded within the international system that allow for such vast financial outflows from the region – resources which themselves would be enough to ensure prosperity for the whole population of SSA. This includes addressing unfair trade rules and tax practises, the unfair allocation of responsibility and costs of mitigating the climate crisis to countries who did not create it. brain drain and loan making amongst others. This requires robust measures for policy coherence to address UK polices which undermine prosperity in SSA.  There are a range of options for such mechanisms,( suggestions can be found in evidence to the Committee’s previous Beyond Aid inquiry we submitted on behalf of Action for Global Health)[18] but these must be include high level political commitment; mechanisms for coordination; and  robust monitoring and assessment.

 

  1. An important step to addressing these structural issues is to foster a better understanding about the UK’s historic and current relationship with SSA. This includes acknowledging the ways in which the UK has and continues to benefit from the extraction of wealth and resources from the region and committing to a more equitable and fair relationship moving forward. Reinstating budgets for development education and committing to teach colonial history and the root causes of poverty in schools would be a step in the right direction.

 

  1. The Department for International Development should also recommit to focussing its spending of 0.7 GPD on poverty alleviation in the world’s poorest countries as opposed to “mutual prosperity”. In line with this, DFID should remain separate to the FCO and the mandate and structure of the CDC should be reformed to ensure it is working in the interests of the world’s poorest countries and communities.

[1] OPHI. 2014. ‘Multidimensional Poverty in Sub-Saharan Africa: Levels and Trends’ https://www.ophi.org.uk/wp-content/uploads/OPHIWP081.pdf

[2] Health Poverty Action. 2017. ‘Honest Accounts’. https://www.healthpovertyaction.org/wp-content/uploads/2018/12/Honest-Accounts-2017-1.pdf

[3] Health Poverty Action. 2017. ‘Honest Accounts’. https://www.healthpovertyaction.org/wp-content/uploads/2018/12/Honest-Accounts-2017-1.pdf

[4] Health Poverty Action. 2014. ‘Honest Accounts’. https://www.healthpovertyaction.org/wp-content/uploads/2018/12/Honest-Accounts-report-web-FINAL.pdf

[5] Health Poverty Action. 2017. ‘Honest Accounts’. https://www.healthpovertyaction.org/wp-content/uploads/2018/12/Honest-Accounts-2017-1.pdf

[6] . Global Financial Integrity. 2010. ‘Illicit Financial Flows from Africa: Hidden Resource for Development’. http://www.gfintegrity.org/storage/gfip/documents/ reports/gfi_africareport_web.pdf

[7] ‘Narrative Report on the United Kingdom’. http://www.financialsecrecyindex.com/PDF/UnitedKingdom.pdf

[8] Jubilee Debt Campaign. 2012. ‘The State of Debt’.

[9] Wismar et al 2011: 70

[10] Health Poverty Action. 2014. ‘Honest Accounts’. https://www.healthpovertyaction.org/wp-content/uploads/2018/12/Honest-Accounts-report-web-FINAL.pdf

[11] IPRR and ODI. 2012. ‘Understanding Public Attitudes to Aid and Development’. https://www.ippr.org/files/images/media/files/publication/2012/06/public-attitudes-aid-development_June2012_9297.pdf

[12] DFID. 2020. ‘About Us’. https://www.gov.uk/government/organisations/department-for-international-development/about

[13] ICAI. 2019. ‘The use of UK aid to enhance mutual prosperity’. https://icai.independent.gov.uk/html-report/mutual-prosperity/

[14] Telegraph. 2020. ‘Warning over 'deeply damaging' merger between Foreign Office and DFID’. https://www.telegraph.co.uk/global-health/climate-and-people/warning-deeply-damaging-merger-foreign-office-dfid/

[15] Bond. 2020. ‘UK-Africa Investment Summit: risks and opportunities for development’. https://www.bond.org.uk/news/2020/01/uk-africa-investment-summit-risks-and-opportunities-for-development

[16] GJN. 2020. ‘Doing More Harm Than Good’. https://www.globaljustice.org.uk/sites/default/files/files/resources/web_gjn_-_doing_more_harm_than_good_cdc_-_feb_2020_2.pdf

[17] ICAI. 2019. ‘The use of UK aid to enhance mutual prosperity’. https://icai.independent.gov.uk/html-report/mutual-prosperity/

[18] http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/international-development-committee/the-future-of-uk-development-cooperation-phase-2-beyond-aid/written/12440.pdf