Ireland: Borrowing money to give it away

Mr Justin Kilcullen of Trocaire has severely chastised the Government (The Irish Times Opinion & Analysis, 20 September) for ‘reneging’ on its commitment to spend 0.7% of GDP per annum on international aid, a target set by the UN a decade ago.

The Irish Government is spending €535.3 million on this programme in 2010.  It spent €422 million on development aid in 2002 when our tax revenues were last in the region of €30 billion, when the exchequer surplus was €94 million and our national debt was €31 billion.  The government has spent over €5.8 billion altogether between 2001 and 2010, so even if we stand indicted in the eyes of lobbyists, Irish people have pulled their weight on the delivery of ‘real change’ to the less privileged.

But the view of the aid agencies is that the government needs to commit €1.1 billion per annum for an on-target performance.  They exhort the Government to ‘find the money’ and, in the classical language of a lobbyist, ‘to set out clearly defined, year-by-year steps’ to meet their aspirations – in circumstances of unprecedented turmoil and volatility.  The Government is also asked to introduce new legislation so that Ireland can lead the world in the safeguarding of aid commitments from any and all prevarication, doubt and uncertainty.

This approach would be a difficult challenge at any time because Peter has to be robbed to pay Paul, but when government expenditure is €54 billion and government income is €30 billion that challenge becomes even more elusive because the only source of money is from international moneylenders whose penal rates of interest are a reflection of their below-par confidence in the country’s capacity to recover from the brutal mauling inflicted by our banks and building societies and their capacity to regain functionality.

It still appears that a great deal of money spent on aid by Ireland is based on the ‘black baby principle’ of merely giving it away with no economic advantages being conferred on our economy.  Other countries spend aid on the provision of long-term infrastructure and assets by their own enterprises so as to stimulate self-sufficiency,  not nurture chronic and infinite dependency and, critically, to minimise exposure to bribery, corruption and price gouging – a widespread  experience anecdotally reported following the horrific earthquake in Haiti.

Turning to the future, how can Ireland meet the ambitions of those seeking to alleviate world poverty if our policy is really founded on the practice of borrowing money to give it away and the scale of the expenditure bears no relationship to our capacity to afford it?  It would be preferable for Ireland to participate in the international aid arena with integrity and modesty rather than indulging our vanity and always seeking a status and recognition in the eyes of the world that is beyond our capacity to sustain. Finally, why should our values be shaped dictated by lobbyists who have no mandate beyond the perimeter of their own T-shirt and not the elected Government who are presumed to act vicariously and in the best interests of the people?

Supporters of Irish Aid Make a Weak Case for No More Budget Cuts

No fewer than 66 Irish overseas voluntary aid organizations have written to the Taoiseach and taken half-page national newspaper advertisements urging that the overseas aid budget which is managed by the Department of Foreign Affairs, through Irish Aid, is not pruned again in the budget on 7th April.

The Irish Times recently published a letter from me in which I advocated that a portion of the Irish Aid budget should be reallocated to Irish charities such as The Society of St Vincent de Paul and The Simon Community to alleviate poverty and distress at home. We are now living in a society which might yield tax revenues of €34 billion in 2009 but whose dysfunctional health services alone cost €14 billion and whose level of unemployment has increased by over 200,000 and is continuing to escalate. The overall economic prognosis is extremely uncertain and volatile.

The OECD has a published report in advance of the G-20 Summit in London which indicate that donor nations are falling behind on aid pledges despite but increased development aid by 10.2% last year to enhance core programmes. Excluding the effect of debt relief measures, the value of overseas aid to about €88 million but this was just 0.3% of the GDP of donor countries, equivalent to 1993 aid donation levels. The report indicates that only 5 countries, Luxembourg, Denmark, Sweden, Norway and Holland exceed the 0.7% target that Concern and its counterparts refer to as the ‘solemn undertaking by the Government’ to the UN The commitment by the US, UK, Japan and Germany are miniscule in comparison, although the UK has made up substantial ground. There is now concern that the bid aid increased agreed when the G-20 met in 2005 may not be greatly moderated.

I stated in my letter that charity begins at home but I also agree it should not necessarily end there! I believe that our nation should make every effort to support Irish Aid, but within our capacity to do so.

Ireland has paid €5.3 billion in overseas aid over the past decade and the annual sums committed to it have risen steadily each year. Ireland has therefore delivered, but what has actually been accomplished?

I don’t have a comprehensive sense of how much charities with an indigenous mission raise but I did observe that the annual revenues of the Society of St Vincent de Paul in Ireland have been in the region of €45 million. I suspect that the overall amount of funds raised for Irish purposes are significantly less than the amount of Irish Aid committed elsewhere. All charities are finding it much more difficult to raise funds in the prevailing economic climate. There is no need for me to embroider the rationale that more resources are needed at home. Sadly, the evidence is abundant. What I am suggesting is that fresh compromises are necessary that take current and prospective realities into account, at home and overseas.

If I was petitioning the Taoiseach in defence of the Irish Aid budget and by obvious implication, I saw the necessity of persuading a large cohort of the Irish population that my case has real merit, I would approach the persuasion task in a different way.

I would try to ensure that the public consciousness was animated by the actual accomplishments with the funds committed and, specifically, how ongoing funding would make a direct difference. I would describe what adaptations have been made to programmes to ensure the greatest impact is made with the resources expended; which projects have been abandoned or curtailed and why; which projects have been brought to a successful conclusion; what is the rationale for multi-decade commitments in some instances; how has project funding evolved? I would address, as a point of information, the issue of insidious corruption in recipient countries and the impact of this on supported projects. I would also avoid fantasy statement about the eradication of the sources of poverty. However noble and well meaning these maybe the possibility of eradicating poverty is about as achievable as the eradication of rumours or the science of economics becoming redundant!

I recently received an e mail from a cousin recently in which he stated “I quit PricewaterhouseCoopers last November in order to work as a volunteer with GOAL. I've been working as an accountant for GOAL in North Sudan since November; so far it has been a great experience; very eye-opening”. That comment tells a story, narrates an anecdote and creates a sense of intrigue!

Is it really enough for the advocates of no further cuts to the Irish Aid budget to merely state that €5.3 billion over 10 years “make a real and positive difference”. One would expect that to be the case – as an absolute minimum baseline. But what are the ‘star achievements’, the enduring footprints - that are uniquely Irish? Those sterile, passive exhortations created by a committee do not!

Comments that are excessively passive in tone and ‘feel-good’ expression doesn’t convey very much and are too simplistic. Will they really animate the imagination and passion of your jury – the Irish public whose will the politicians must tilt towards? Clichéd references to ‘fairness and equity’ are two-a-penny these days but vary tremendously in practice with one’s perspective, experience and personal circumstances. Unfortunately, the circumstances of hundreds of thousands of Irish citizens have changed immeasurably for the worse and the prospects of alleviation are non-existent.

They routinely trot out the expression ‘solemn undertaking’ as if it was an immutable clause in the Constitution or a blast from the pulpit. But the religious connotation may not have the desired impact on many of a secular disposition would not identify with. Why would they it not construct a more persuasive argument that would resonate with a greater number of people?

There is such a visceral sense of betrayal in Ireland as a consequence of the malign behaviour of financial institutions, politicians, power brokers, influence peddlers and even bishops that citizens no longer believe that any pillars of society ‘keep their word’ or respect trust. This destruction of this principle has greatly impaired Ireland’s national reputation to the extent that the fatted cow that kept the entire economic system prospering, including Irish Aid, is in tatters. But the jailing of corrupt and incompetent greedy bankers with messianic egos’ would impact more on the national reputation that an adjustment in the amount of the Irish Aid budget - which would make little, or negligible, impact on its rehabilitation or restoration of the nation’s reputation.

The challenge for charities is how to successfully intercept the imagination of the nation to make the strongest possible case for their viewpoint and keep those pay the bills convinced that the money is thoughtfully, creatively and productively spent!