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Thursday, 20 December, 2001, 22:42 GMT
Tanzania rekindles aid concerns
Maasai tribesmen in Ngoro-Ngoro, Tanzania
Tanzania is one of the world's poorest countries
The Tanzania exports deal was a stern test for the government which ministers have failed.

That is the view of Andrew Pendleton, from charity Christian Aid, as Tony Blair becomes the latest leader to feel the heat as the worlds of trade and aid collide.

It does send the wrong message to those who have always argued debt relief is a busted flush

Glenda Jackson

Although there is no inference of "tied aid" in the latest export licence, the decision has rekindled familiar accusations of profits being put before tackling poverty.

Critics of the deal say it is a "Trojan horse" which means Tanzania gets a more expensive radar system because it meets military concerns.

In many controversies of the past, foreign aid has instead been seen as camouflage for boosting jobs and industry in the UK.

Catalogue of controversies

The prime example of such "tied aid" was the Pergau Dam project in Malaysia in the late 1980s.

The dam was criticised as unsuitable on environmental grounds and because the UK aid package to build it was tied to Malaysia continuing to buy arms from UK weapons manufacturers.

There have been several other cases where tied aid deals have come under fire for being inefficient and wasteful.

A study by the Treasury and Deloitte &Touche Consulting in 1996 concluded that UK firms had overcharged recipients of British aid by as much as 50% for shovels and hoes.

Clare Short
Short is thought to have opposed the deal
The price ups were found to be around 25% for buses and 27% for water pumps.

The government in May this year ended UK tied aid - a move due to be enshrined in law through the International Development Bill.

That action - as well as Tony Blair's ambitious words at the Labour Party conference about tackling the poverty - has meant aid campaigners are particularly disappointed now.

There are worries too that the deal, which comes after Tanzania qualified to have $3bn of its debts cancelled, could undermine the drive on debt relief.

Wrong signals

That was a concern of Labour former minister Glenda Jackson, as she attacked the deal as "absurd" on BBC Radio 4's World At One programme on Thursday.

"It does send the wrong message to those members of the international community who have always argued debt relief is a busted flush because if you do afford some countries to eradicate the interest they have to pay on monies they have borrowed then they simply waste it in other ways.

Robin Cook
Cook's pledge of an "ethical foreign policy" was later lampooned
"We can tackle the problems of the world for comparatively small amounts of money but not if we are going to dither like this."

Whitehall sources say Tanzania in fact will not be poorer and in fact could make money out of the new system.

But opponents of the radar system sale are now looking to prevent the decision being repeated.

Oxfam's Sam Barratt told BBC News: "The most important thing now is for the government to sort out the Export Control Bill, to make sure that development is included in the bill, to make sure that fiascos like this never happen again."

Exports changes

The exports bill has already gone through the Commons and will be scrutinised during the Lords next month.

Some Labour MPs have already called for it to be beefed up and there is speculation that could happen in a pay-off to the latest decision.

Tony Blair's Labour conference speech was seen by some observers as a return to Robin Cook's 1997 mantra of ensuring an "ethical dimension" to foreign policy.

Mr Cook's words soon came to be lampooned - Mr Blair will want to ensure the Tanzania radar system does put him on the same course.

The BBC's Jonathan Beale
"Many Labour MPs have grave reservations about this"
Christian Aid's Roger Riddell
"It's a tradegy for the people of Tanzania"
Isle of Wight MP Andrew Turner
"BAE have just been granted a licence"

Radar deal
Is the UK's deal with Tanzania justified?
See also:

19 Dec 01 | UK Politics
Tanzania row escalates
28 Nov 01 | Business
Tanzania gets $3bn debt relief
02 Oct 01 | Africa
Blair promises to stand by Africa
19 Nov 01 | Business
Terror attacks 'will worsen' poverty
11 Sep 01 | Business
World Bank pushes anti-poverty drive
20 Dec 01 | UK Politics
Modernising Africa's skies
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