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Cafod is warning that the Department for International Development’s (DfID) new focus on trade rather than aid will bypass small businesses, which employ some of the poorest people in developing nations.
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 wanting to win global contracts.
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.”
Geoffrey Chongo, who works for a Cafod partner based in Zambia, warned that “economic growth does not always lead to poverty reduction”. He said shopping malls had sprung up in his country’s capital but they stocked South African vegetables rather than Zambian ones as local susbistence farmers were not benefiting from the economic growth.