Why India needs aid

The Guardian (UK) 7 February 2012

Most of its population are still poor. The row over British aid shows how many people confuse rapid growth with wealth

David Cameron and Manmohan Singh, who has overseen growth of 8%, during a business conference in 2010. Photograph: Saurabh Das/AP

Underlying the debate raging over British aid to India is the myth that the subcontinent’s strong, market-driven growth of the past two decades has pulled hundreds of millions out of poverty. The economy is taking off; its people no longer need much aid, it is said.

In reality, since 1991, during which time India has experienced the highest growth in recent history, there has been no significant reduction in poverty or hunger. Two in every five children remain malnourished. A third of adults have an abnormally low body-mass index. Half of women of childbearing age are anaemic, a proportion far higher than in sub-Saharan Africa. More than 500 million Indians have no electricity, and less than a third have toilets.

The neoliberal policies unleashed by the prime minister, Manmohan Singh, when he was finance minister in the early 90s, have widened class disparities obscenely. Numbers such as 8% growth, and the fact there are 153,000 dollar millionaires, mean little to most Indians. The Ambani, Mittal and Tata families don’t live on their planet.

The debate in the UK was fuelled by anger at India’s decision to buy French Rafale jets rather than the Eurofighter Typhoon, prompting shrill accusations of "ingratitude". International development secretary Andrew Mitchell even admitted that the focus of aid to India included "seeking to sell the Typhoon" – in violation of the stated rationale of British overseas aid, to fight poverty and promote health and education.

So if India can spend billions on nuclear weapons, aircraft carriers and nuclear submarines, and on a moon mission, does it deserve aid? As was revealed this weekend, India has itself told Britain it doesn’t want aid.

But this confuses the nature of aid – which is about poor people, not poor countries. Many Indians question the government’s ballooning military expenditure, which has more than tripled since the 1998 nuclear blasts. Instead they want substantially improved public services, including food security, drinking water, healthcare (India’s public health spending proportionate to GDP is among the world’s lowest), sanitation, and education at affordable prices. Great struggles are under way on these issues, which have the potential to reshape Indian politics.

Besides, aid is much less wasteful than commonly thought. A small part of the international development department’s budget might go towards GPS devices on buses in Bhopal, with dubious benefits. But more than 60% has gone in recent years into education and healthcare.

In 2003, India kicked out all but six aid donors in a fit of pique. The Bharatiya Janata Party-led government was upset at the worldwide criticism of the 2002 Gujarat pogrom of Muslims and some EU countries’ efforts to support the victims. Such refusal of aid is morally reprehensible in itself. A government which presides over persistent destitution and has failed its most vulnerable people for 60 years has no right to refuse aid which could help them.

And though India has launched a modest aid initiative for the least developed countries, this shouldn’t be cited as an argument to stop aid to India. There are even poorer people than Indians in several countries, but without India’s wherewithal or skilled manpower. There is no reason why India shouldn’t be donating food to Niger or Libya, or training technicians, policemen, diplomats and lawmakers in Afghanistan. This would only be wrong if India did nothing for its own people, and merely exploited business opportunities through tied aid.

Britain would be morally and politically wrong to terminate aid to India, home to the largest number of the world’s poor. Giving aid not only acknowledges the injustice of colonial exploitation, it also arises from an obligation to redress the gross structural imbalances that continue to mark the world despite recent power shifts between states.

Good aid programmes can make humane existence possible for millions who have been denied it. Rather than Mitchell’s aim to "invest more in the private sector" and public-private partnerships – which charge user fees the poor cannot afford – Britain should target schemes with a social transformation potential. Programmes that resemble a sovereign wealth fund and seek financial returns are less beneficial than building up people’s human potential.