LETTERS
Predictable Pergau Sir: Your editorial of 26 February propos- ing that the British aid programme should be abolished and transferred to the Department of Trade and Industry was unusually muddled, extremely facile and misinformed.
Many years ago when I was a director of economics at the Overseas Development Agency and when we were being pressured to subsidise British exports through the aid programme, we actually proposed that if the DTI wanted to devote funds to this pur- pose they should become responsible for them.
This suggestion was rejected with horror by the DTI, who did not want to be seen to infringe international agreements which forbade governments to subsidise exports. And it was the Treasury's fairly sensible view that we did not want to encourage a subsidised credit race as we were a major player and thus likely to lose more than most. It was also argued that it was not in the long-term interest of the British economy.
When ATP (aid for exports) was thrust upon us by a Labour government, I was responsible for the economics department, which had to determine whether ATP pro- jects had 'developmental value'. I objected that a scheme such as this, which required `instant' appraisals, would lead to misuse of public funds. It would lead to overcharging by non-competitive suppliers and was con- sequently wide open to corruption as it would be impossible to check the proposals properly.
I fully appreciate that in most developing countries, and indeed in developing ones, bribes and commissions are a way of busi- ness life and one can hardly blame busi- nessmen for paying them. However, these are privately owned funds.
In Britain we have prided ourselves on possessing an incorruptible public service. Since the public service is responsible for public funds it does not seem unreasonable to maintain that bribes and payoffs to politicians should not become part of public policy. Indeed, in the many years that I served in the ODA I was never aware of a single instance of bribery or cor- ruption in the aid programme (however, I did leave shortly after ATP was introduced).
While not wishing to claim any moral superiority for the public service, surely it is desirable that it should not become involved in bribery.
With ATP a new situation arose. The projects were so large and frequently so unobjectionable in principle (dams, water supplies, power plants) that it was impossi- ble to assess whether in a non-competitive situation we were being charged reasonable prices, or whether large illegal commissions were or were not being paid. It is almost certain that a supplier in a monopoly situa- tion would take advantage of this situation and that some of this surplus would be paid to corrupt politicians and officials.
The Malaysian Pergau Dam disaster was bound to occur. It is only surprising in that it has taken so long to emerge.
I do not think that it is to Britain's advan- tage to fund projects which will make recip- ients poorer (in the Pergau case £100 mil- lion poorer). I do not think that it is to Britain's advantage to subsidise exports. And I do not think it is to Britain's advantage to have a public service (or politicians) thought to be associated with bribery.
In an excellent editorial some weeks ago you deplored the undermining by our Gov- ernment of the spirit of public service of which we have been so rightly proud. The ODA has clearly maintained these stan- dards in opposing this massive misuse of public funds — surely they merit your sup- port.
Gordon Bridger
18 Harvey Road, Guildford, Surrey
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