Why Brexit is the best thing that could have happened for the world’s developing nations

Why Brexit is the best thing that could have happened for the world’s developing nations

The subject of the UK providing financial aid to developing nations is never far from controversy. Some see it as a necessary step to rebuilding nations that have suffered appalling natural catastrophes, bloody civil wars or the pain of Marxism in action – or a combination of all three. Others believe that the best way for nations to come through such challenges is for them to be able to trade their way to success, becoming innovative and self-reliant.

Having worked in the developing world providing advice on government reform that aims to reward prudence and probity while establishing a commitment to markets, light regulation and property rights – rather than accepting central government planning that is invariable accompanied by bribery – I believe there is a role for foreign aid if it is project-driven, transparent and accountable. If it isn’t working or is being abused it should be halted, and I’ve worked on one UK aid contract where that quite correctly happened.

Likewise if trade is to succeed in lifting nations – and it is by far the best way of rewarding masses of people with improvements in their lives, their health and the opportunities for their families – then our doors have to be open to produce, manufactured goods and services. If we erect barriers we are denying the opportunity of trade and encouraging people to turn towards the dark side of corruption, violent crime and despotism.

No amount of foreign aid will work if those trade doors remain closed or are only slightly ajar.

Imagine then the worst-case scenario where aid is actually counterproductive and is used merely to prop up lawless client states that practice torture, condone slavery and live off the proceeds of crime – but worse still, those countries have no prospect of enjoying trade because one of the largest markets in the world, the EU, has built a wall that intentionally discriminates against developing nations.

Sadly the European Union is that worst-case scenario: it runs an aid programme that is out of control, that its own auditors have condemned and was accused by MEPs of pouring EU taxpayers’ money down the toilet. It funds some of the most appalling governments in the world (e.g. Burkina Faso, Central African Republic, Cote d’Ivoire, Guinea Bissau, Kyrgyzstan, Mauritania, Niger and Togo) by stuffing cash direct into their bank accounts for their politicians to spend at will rather than supporting measurable projects – and the UK has been one of its largest contributors.

It is vital that in the Brexit negotiations the UK stops giving the EU some £1.35 billion a year (as of 2013) from the day we leave and puts such funding under the control of DFID so it can be monitored and measured against the benchmarks that will show its effectiveness.

That alone will not, however, be enough. To reverse our worst-case scenario and turn it into a virtuous cycle where institutions begin to work and uphold the rule of law we also need to ensure our doors are fully open to the foods and goods that developing nations are keen to sell us. We in turn can sell our expertise to them about how to improve their production yields and compete in the real world.

The reality is that so long as we stayed in the European Union we were doing that with one arm tied behind our back, our legs bound and our mouths gagged. Brexit is the best thing that could ever have happened for the developing nations because we are now able to untie all those bindings and pursue a course of free trade that will offer genuine hope to those who want to do business with the fifth largest economy in the world.

The EU Single Market and its Customs Union are specifically designed to restrict trade from outside competitors – and especially the developing nations that might undercut the inefficient farmers of southern Europe. To shore up the obscene Common Agricultural Policy, tariffs of 9.9% are placed on raw ingredients, with tariffs rising to 19.4% for processed foods (such as canning). Agricultural produce faces tariffs between 18% and 28%.

This is why the tomato producers of Ghana went bust: suffering the dumping of subsidised tinned Italian tomatoes but unable to make their own, the Ghanaian farmers ended up becoming illegal immigrants picking the tomatoes in Italy that had made them impoverished.

Likewise, the Customs Union tariffs ensure that – without growing a single bean – Germany is able to make more profits from processing coffee than the whole of Africa is able to make from growing it. These tariffs and quotas are why chocolate is processed in Belgium and not Africa and why subsidised north European sugar beet is killing off the Caribbean sugar cane producers.

International aid has its place, but without the UK leaving the Single Market and the Customs Union designed to protect it, we might as well, if you’ll excuse my use of a technical term, be pissing in the wind. Thank God for Brexit, but having won the war we now must win the peace.