Welcome to the first of a regular series of articles that are going to look at aid, development, natural and man-made emergencies and the role in all of this of companies and the private sector
This new column is called View from the Middle because that is where we find ourselves.
‘We’ in this instance is AdvanceAid, a newish NGO set up by business people to take a business-like approach to solving just a few of the world’s problems.
Advance Aid’s mission is to ensure that all of the non-food items that Africans use in emergencies – around $260m worth these days – are manufactured in Africa and not flown in, late in the day and at immense cost, from Asia, Europe or North America.
We’re ‘In the Middle’ because we are neither fish nor fowl. Neither died-in-the-wool sandals and socks NGO people nor Saville Row suits and red braces City chaps.
We’re non-profit, but we’re planning to make a surplus that can then be ploughed back into the work.
We don’t fit neatly into either camp and, if Andrew Mitchell, UK Secretary of State for International Development, has his way, you’re going to have to get used to us Middle People as there are going to be a lot more of us about.
And I hope you’re going to grow to like working with us.
Speaking back in October at the London School of Economics, Andrew Mitchell set out a series of sweeping changes that he plans to introduce at DFID, centred on ensuring that the private sector has a strong role to play in encouraging economic growth in the world’s poorest countries.
It’s not exactly privatisation of the aid and development effort of the UK, but it’s very clear that he sees a massively enhanced role for the private sector – and for private sector mindsets and attitudes – in delivering UK aid effectively.
The key parts of the speech from our point of view were where he dealt with the importance of job and wealth creation, in which “aid is a means to an end”, and where he discussed the reconfiguration of DFID itself that he is putting in train to introduce private sector thinking into the department.
“It is my intention to recast DFID as a government department that understands the private sector, that has at its disposal the right tools to deliver and that is equipped to support a vibrant, resilient and growing business sector in the poorest countries.
To do this we will need to add new types of people with different skills,” he says.
He is adamant that economic growth is what is required to lift people out of poverty and that the private sector has to be the engine of that growth.
He quoted, approvingly, a speech by Gordon Brown in Kampala in which he said, “The job of aid is to kick-start business-led growth, not replace it”.
He compared wealth and development in South Korea and Zambia, pointing out that in 1960 South Korea had a GDP per capita only twice that of Zambia.
Business matters most
But by 2009, as a direct result of their different growth paths and policies, South Korea’s per capita income was nearly 40 times higher than Zambia’s, while the rate of children dying before their fifth birthday was 5 per thousand compared to Zambia’s 141.
DFID is to be charged with learning from business and, in particular, looking for the types of innovative solutions to problems that business is best at delivering.
Andrew Mitchell says that he wants to bring in people from the private sector on short-term secondments to “enrich DFID’s own talent pool” and to “inject new, business-savvy DNA into the department.”
Civil servants, of course, are past masters at allowing these sorts of innovations to flow over and around them whilst changing nothing, so it is going to be very challenging if you are one of the short-term secondees.
And if you are a civil servant in DFID it looks as though you can expect interesting times ahead as a private sector department is created within DFID itself.
Those NGOs who depend on DFID for their income can also expect change to flow in their direction as well – for many it could be an uncomfortable ride as they see private sector organisations competing for funding that they have been used to considering ‘theirs’.
The Chinese curse ‘May you live in interesting times’ clearly applies here. We are looking forward to the excitements ahead and I am planning to share our experiences with you.