‘Trade not aid’ hits small businesses

CAFOD is warning that the Department for International Development’s (DfID) new focus on trade rather than aid is ignoring small businesses, which employ some of the poorest people in developing nations, writes Abigail Frymann.

Graham Gordon, head of public policy at the Catholic aid agency, told a panel discussion in the House of Commons last week of Cafod’s concerns.

During the discussion the Minister for International Development, Alan Duncan, said his department’s focus under the coalition was “the great driver of development – economics”. This marked a shift away from aid, said Mr Duncan, which “only gets you so far”.

Mr Duncan explained that DfID was focusing on facilitating trade in countries such as Uganda by helping to reduce the time taken to clear goods at its borders from five days to one, and providing support and advice to Ethiopian garment manufacturers. But, following the minister’s comments, Mr Gordon complained of a “blind spot” towards micro-, small and medium enterprises and their contribution to local markets.

“Export-led growth cannot be the panacea,” said Mr Gordon, explaining: “DfID’s economic development strategy is very focused on export-led growth, which means by its nature it’s likely to favour bigger businesses, as they’ll be the ones focusing on export strategies. In contrast smaller, micro-businesses are focused on supporting their families, communities and local markets.”

n The Church of England is considering increasing the proportion of its £6 billion portfolio invested in hedge funds and private equity, in a move aimed at making it the United Kingdom’s largest investor in these sectors. The Church Commissioners are to discuss the move next month, according to The Financial Times. Controversy has stalked its investments since Justin Welby, the Archbishop of Canterbury, last year said he wanted to drive the pay-day loans company Wonga “out of existence”, only to find that the Church of England itself invested in it.