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Global South’s Middle Class is Increasing Prosperity

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The global middle class is on the rise – and this is creating both challenges and opportunities. As poverty rates have come down across the global South, many countries have seen a rise in the proportion of their population categorized as “middle class”. Globally, being middle class is defined as a person able to consume between US $4 a day and US $13 a day (ILO).

According to the Organization for Economic Cooperation and Development (OECD), most of this growth will be in Asia and the region will soon make up 66 per cent of the world’s middle class. Historical experience shows that members of the middle class quickly become absorbed in spending their accumulated capital on housing, equipment, industry and business, health and education. In countries with a growing middle class, policy makers need to show a strong interest in creating stable economic conditions to encourage this expanding consumption and domestic demand, the OECD advises.

Growth of the world’s middle class took off after 2001, with an additional 400 million workers joining this group. The McKinsey group of consultants found the total number reached 2 billion in a dozen “emerging nations” in 2010, collectively spending US $6.9 trillion every year (McKinsey).

Forecasters predict a further increase in the middle class across the global South will bring with it a surge in consumption (a combination of spending and demand). Areas being highlighted by various studies and reports include China’s small and mid-size cities, other areas of East Asia and Africa.

Middle class spending in these dozen emerging nations could reach US $20 trillion during the next decade – twice the amount of consumption occurring in the United States right now (McKinsey).

The result is a re-shaping of populations, with growing numbers of people now neither rich nor desperately poor, but landing in the middle of the income distribution.

And local competitors in the global South are fighting hard for these consumers on their own turf.

The Hangzhou Wahaha (http://en.wahaha.com.cn/) beverage maker in China has been able to compete against multinationals such as Coca-Cola and PepsiCo, according to McKinsey. It has turned itself into a US $5.2 billion business using a multi-pronged strategy: targeting rural areas, catering to local needs, keeping costs low and positioning itself as the patriotic choice.

And this change is also occurring in Africa, where a growing middle class is fuelling sales of refrigerators, television sets, mobile phones, motors and automobiles across the continent, according to the OECD. In Ghana, for example, car and motorcycle ownership has risen by 81 per cent since 2006.

According to the African Development Bank (AfDB), Africa’s middle class has reached 34 per cent of the population, or 350 million people. In 1980, it was 126 million people, or 27 per cent of the population.

Countries with the largest middle classes in Africa include Tunisia and Morocco, while Liberia and Burundi have the smallest number of people in the middle class.

The economic growth that is fuelling this middle-class surge is coming from a combination of increasing investment in the services sector, the tapping of the natural resource sector and better economic policies in the past two decades. Africa’s middle class is driving growth in the private sector and boosting demand for goods and services, most often also provided by the private sector.

“The liberalization of African economies has resulted in improved efficiencies and led to a rapid growth in the service sector, which has spurred the growth of the middle class,” Lawrence Bategeka, a principal researcher at the Uganda-based Economic Policy Research Centre, told The East African newspaper.

How important the middle class is to increasing consumption levels can be seen in the cases of Brazil and South Korea.

According to the OECD, both countries had similar income levels and growth rates in the 1960s. But by the 1980s, high income inequality in Brazil capped the middle class at 29 per cent of the population. In South Korea in the 1980s, the middle class population reached 53 per cent. This larger middle class population enabled South Korea to switch from an export-driven growth strategy to domestic consumption.

While Brazil wasn’t able to do this at the time, it has since made impressive gains in reducing poverty – from 40 per cent of the population in 2001 to 25 per cent in 2009. This has seen the middle class grow to 52 per cent of the population and boosted domestic consumption.

While a rising middle class in the global South is good news for improving human development and living standards, the OECD found much of the new middle class was vulnerable and could easily slip out of that category. They also often lacked enough income to purchase more expensive durable goods such as automobiles (OECD Yearbook 2012).

The success of this fragile but growing middle class will be key to how well the global economy fares in the coming years.

A new report by the UN’s International Labour Organization (ILO) argues that the global South’s growing middle classes are just the thing to spur growth across the wider world economy.

“Over time, this emerging middle-class could give a much needed push to more balanced global growth by boosting consumption, particularly in poorer parts of the developing world,” said Steven Kapsos, one of the authors of the report.

In Indonesia, an example of the economic impact of the middle class trend in action can be seen in the surging life insurance business.

Association of Indonesian Life Insurance Companies (AAJI) chairman Hendrisman Rahim believes the growing middle class are potential customers for the country’s thriving life insurance industry.

“They are the ones who have the need to be insured and can afford to purchase a policy. Extremely rich people are financially capable [of buying], but may not have the need. Extremely poor people have the need, but require financial assistance to be insured,” he said to the Jakarta Post.

As the Indonesian middle class increases, the life insurance industry is expecting to see revenue rise by 30 per cent in 2013.

Published: February 2013

Resources

1) The $10 Trillion Dollar Prize by Michael J. Silverstein. Website: amazon.com

2) The Middle of the Pyramid: Dynamics of the Middle Class in Africa. Website: http://www.afdb.org/en/blogs/afdb-championing-inclusive-growth-across-africa/post/the-african-consumer-market-8901/

3) McKinsey Quarterly: Capturing the world’s emerging middle class. Website:http://www.mckinseyquarterly.com/Capturing_the_worlds_emerging_middle_class_2639

4) OECD Observer: An emerging middle class by Mario Pezzini. Website:http://www.oecdobserver.org/news/fullstory.php/aid/3681/An_emerging_middle_class.html

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London Edit

31 July 2013

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

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This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2023

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Brazilian Design For New Urban, Middle-Class World

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Countries across the global South are experiencing rapid urbanization as people move to cities for better economic opportunities — and this massive social change is creating new business opportunities. Those who recognize how fundamentally people’s lifestyles are changing will be those who will benefit from this big shift in populations.

Finding ways to live well in urban areas will be critical to determining whether this move repeats past urban failures — from the favelas of Brazil to the slums of India — or introduces a new way of living that is exciting and colorful. Design and designers will be critical to this change.

One young design company in Brazil, Sao Paulo-based furniture studio NUUN  (nuun.nu), is attempting to resolve a dilemma common across the rapidly urbanizing global South: How to create a design aesthetic that fits with the new way of living and being?

The company consists of designer and founder João Eulálio Kaarah and architects Renato Périgo and Carolina Sverner.

Périgo specializes in furniture and interior design, while Carolina Sverner worked with respected Japanese architect, Shigeru Ban (shigerubanarchitects.com), who is well known for designing buildings and houses made from paper and for creating easy-to-build homes for people after a disaster has struck (http://www.ted.com/talks/shigeru_ban_emergency_shelters_made_from_paper).

A collaboration among upcoming artists, designers and architects, NUUN tries to infuse its designs with a sense of “brazilianness”. Brazilianness is a modern aesthetic, made for modern lifestyles in the new urban landscape, that draws on aspects of Brazil’s culture and environment.

The young studio’s first collection of furniture offers simplicity. Called Eos, it tries to blend urban cosmopolitanism with raw nature. Brazil is known for its jam-packed urban cities as well as its vast expanse of Amazon rainforest. In practice, NUUN’s look is a mix of contrasts redolent of what used to be called brutalism: concrete mixed with glass, steel, wood and semi-precious gems. NUUN takes inspiration from NASA’s Earth Observation System (EOS): the collection vibes off of space satellites, antennae and the dry soil of the backwoods. NUUN says that “despite its Martian features, [the collection] is as Brazilian as it comes”. There is the modular Panorama sofa (http://nuun.nu/products/panorama) in five colors, capable of being re-shaped to fit a variety of living arrangements. A glass-topped coffee table with a concrete base and a side table with a carbon steel metallic structure to complement the sofa.

Elsewhere in the world of Brazilian design, footwear brand Grendene S.A. (http://ri.grendene.com.br/EN/Company/Profile) has become one of the world’s largest producers of footwear and made one of its founders a billionaire. And Grendene has boosted its international success by turning to another Brazilian success: supermodel Gisele Bündchen (giselebündchen.com.br).

Grendene began in 1971 and owns various successful shoe brands, including Melissa (melissa.com.br/en/), Grendha, Ilhabela, Zaxy, Cartago, Ipanema, Pega Forte, Grendene Kids and Grendene Baby.

It has six industrial zones with 13 footwear factories and can produce 240 million pairs of shoes a year. It undertakes all areas of production— from making its own moulds for the shoes to creating PVC (polyvinyl chloride) (http://en.wikipedia.org/wiki/Polyvinyl_chloride) – and handles its own distribution.

While Grendene is already a well-known shoe brand in Brazil, it wanted to expand its presence overseas to increase profits. Named after the two brothers who founded the company, Alexandre Grendene Bartelle and Pedro Grendene Bartelle, Grendene started working with supermodel Gisele Bündchen in 2002 to help her launch her own line of affordable flip-flops, iPanema (ipanemaflipflops.co.uk). The brightly colored sandals with elaborate patterns became an instant success.

But do celebrity endorsements really work? In the case of Bündchen and Grendene, the answer is yes. According to Forbes, 25 million pairs of the flip-flops and sandals are sold every year, accounting for 60 per cent of Grendene’s annual exports of about US $250 million.

Brazil was able to produce 864 million pairs of shoes in 2012, up 5.5 per cent from 2011.

Of these, 113 million pairs were exported to the United States, Argentina and France.

Brazil, like many other countries, has had to work out how it could compete with cheaper shoe imports from China. The strategy it chose was to target the growing number of middle-class people both in Brazil and elsewhere, as well as the high end of the market.

In 1979, Grendene created the Melissa brand, which has now become a coveted style leader. It collaborates with top design names such as Karl Lagerfeld and architect Zaha Hadid.

Making a partnership with Bündchen is part of the company’s strategy to reach higher-income buyers.

And it is working: Grendene increased its export revenue by 50 per cent in 2013.

Co-founder Alexandre Grendene Bartelle became a billionaire according to Forbes World’s Billionaires list and is worth US $1.4 billion. He owns 41 per cent of Grendene S.A. and close to 40 per cent of the Dell Anno brand.

This is a critical lesson for manufacturers in the global South. Grendene had achieved strong market dominance at home, and was already benefiting from growing wealth among Brazil’s middle classes. But it was the overseas market that had the potential to clinch even more profits for the company.

Bündchen’s high brand profile has enabled the company to compete head-to-head with the well-known Brazilian flip-flop brand, Havaianas (havaianas-store.com).

Another modern design leader owned by Grendene, Dell Anno (lojasdellanno.com.br), is a maker of modernist cabinets and furniture.

Dell Anno only use wood from renewable forest sources, to protect and preserve the Amazon and other native forests. Dell Anno tries to recycle as much as possible: up to 80 per cent of the water used in manufacturing is recycled, and byproducts from the production process such as a sawdust, wood, plastic and cardboard are also reused.

Dell Anno makes a full range of furniture for kitchens, bedrooms, closets, home theatres, home offices, service areas, restrooms and commercial environments. Dell Anno uses research and development to study trends and advise customers on the best options. The brand offers its staff training to help standardize customer service, and also has an excellent blog covering developments in modern design around the world (http://www.lojasdellanno.com.br/blog/).

Published: May 2014

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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In The Interests Of The Exploited?: The Role Of Development Pressure Groups In The UK

Paper delivered to the School of Politics and Government, Birkbeck College, University of London, London, UK, 2000

“Many Northern NGOs have assumed the role of ambassadors for the world’s poor (Clark 1992: 18).”

By David South

The question “Do pressure groups increasingly advance the fancies of the middle classes at the expense of the interests of the exploited?” is particularly relevant when applied to the ever-expanding network of international development pressure groups (IDPG) in the United Kingdom. Many of these groups are based in London, making use of its political networks, diplomatic connections (the UK is signed up to more international covenants and organizations than any other country), excellent travel links and centrality to the global financial system. While these groups promote their work and policies utilising sophisticated advertising and media campaigns (Save the Children Fund, for example, spends £14 million annually), they rarely come under scrutiny for their claims that they “speak for the poor” (Edwards and Hulme 1992: 23). In fact, “Many Northern NGOs have assumed the role of ambassadors for the world’s poor” (Clark 1992: 18). This question is of particular importance because governments are turning more and more to non-governmental organizations (NGOs) to administer and deliver international aid projects (Dolen 1992: 19).

In 1989, Graham Hancock’s seminal book Lords of Poverty singled out government development agencies and the United Nations for being “rich and powerful bureaucracies that have hijacked our kindness” (Hancock 1989: xiii). He, however, deliberately “refrained from mounting an offensive against the voluntary agencies … by and large I believe their staff to be well motivated and their efforts worthwhile … They rarely do significant harm; sometimes they do great good” (Hancock 1989: xiii).

One of the major changes to occur since Hancock wrote those words has been the co-opting and drawing in of development NGOs even further into the priorities of the bilateral and multilateral donors. They have been placed on a pedestal as the voice of the world’s exploited, and lead high-profile pressure campaigns to alter and direct aid and foreign policies of the UK (Jubilee 2000’s drop the debt campaign is one example). This paper will explore whether international development groups “advance the fancies of the middle classes”, looking at their role in UK policy formation, and whether they accurately reflect the wishes of the “exploited” of the world, in this case, the poor (Kanbur and Squire 1999: 1).

Development pressure groups in this paper include charitable non-governmental organizations engaged in advocacy or project implementation, or both. I have excluded the plentiful university departments that conduct extensive research into development practice and policy. The reason for this is the mandate of charitable development pressure groups: they appeal both to our heart and our head.

Where we stand now

British development policy has taken on a higher profile under the Labour Government elected in 1997. The Department for International Development (DFID) was set up as a separate department removed from the Foreign Office and given a full-time minister, Clare Short. DFID also released the first white paper in 22 years on international development, Eliminating World Poverty: A Challenge for the 21st Century.

As Short says:

NOW THE DEVELOPMENT INTEREST COMES TO THE TOP LEVEL OF THE BRITISH GOVERNMENT’S CONSIDERATIONS. THE DEPARTMENT IS NO LONGER JUST AN AID DEPARTMENT. IT IS NOW CHARGED WITH THE RESPONSIBILITY OF LOOKING AT ALL ASPECTS OF POLICY: TRADE, DEBT, ENVIRONMENT, AGRICULTURE IN THE GLOBAL SYSTEM AND ENSURING THAT BRITAIN’S POLICY ON THESE TAKES ACCOUNT OF THE DEVELOPMENT INTERESTS. (EARTH TIMES, 1999)

The Labour Government is seeking to play a key role in the global debate on the future of international development. As part of this approach, the government aspires to work more closely with those NGOs who support their conciliatory approach to global institutions such as the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO). International development pressure groups are thus presented with a tantalising but difficult decision: work closely with the government on achieving its goals – and so gain access to a steady stream of funding – or remain autonomous but risk being frozen out of the mainstream debate.

The financial stakes are high for the NGOs. According to the Organization for Economic Cooperation and Development (OECD), northern NGOs as a whole spend US $10 billion annually (Smillie 1998: 157). They have evolved into significant economic sectors in their own right, employing thousands, with their tentacles stretching out to the global media and countries around the world.

In the UK, international development spending is currently £2,367 million annually, of which £182 million is channelled through NGOs (DFID 1999). OECD figures show that aid channelled through NGOs rose from 0.7 percent of all aid in 1975 to 5 percent in 1993 (Covey 1992: 4). As well, the number of international NGOs soared in the last century, from nine in 1909 to 28,900 by 1993 (Covey 1992: 3).

If aid is a business, then business is good. Save the Children Fund, to take one example, saw its income increase from £6 million in 1981 to £60 million in 1991 (Dolan 1992: 205), to £97.3 million in 1999 (Save the Children Fund website). Of the current budget, £40.9 million comes from grants given by government development agencies. It also spends £14 million a year on publicity and fundraising.

The “fancies” of the middle class

Interest or pressure groups are in the main a middle-class phenomenon, being largely staffed by the educated middle classes (even so-called ‘working class’ interest groups such as trade union associations can be found to be mainly staffed by the middle classes). They are the product of educated, aspirational citizens who believe they can and should play a role in the world. Moran suggests, “If we are no longer ‘working class’ we can define our social identity and political demands in numerous ways: so groups emerge catering for nuclear pacifists, radical feminists, etc.” (Moran 1985: 236). As Petracca points out, “The rise of citizen groups is probably best explained by a combination of factors: the growth of the middle class in the 1960s, a revolution in communications technology, and the emergence of interest group patrons” (Petracca 1992: 23).

Since the middle class is the core audience for these IDPGs (they vote in large numbers and they have funds to donate), they also colour the priorities of what gets on the development agenda.

Over the past 20 years, IDPGs have used a variety of appeals to raise money and exert pressure on the government. In the beginning appeals were driven by humanitarian disasters such as the famine in Biafra in the 1960s. These appeals struck a strong emotional chord, presenting images of extreme suffering at a time when the UK was enjoying a post-war economic boom. More recently appeals have focused on small-scale development projects such as water wells and classrooms. In the 1980s and 1990s they took on a more economic tone, epitomised in the “ethical shopping” encouraged by Oxfam with its line of Bridgehead products. This coincided with the expansion of a consumer culture and is probably the most graphic example of the marriage between humanitarianism and middle-class consumer lifestyles. It effectively promotes the idea that an alternative and fairer economy can be bought, one rainforest chocolate bar at a time. The environmentalist Dobson is especially critical of social change by shopping: “The Body Shop strategy is a hymn to consumption: in their contribution to the Friends of the Earth Green Consumer Week leaflet (12 and 18 September 1988) they urge people to ‘wield their purchasing power responsibly’ rather than to wield it less often” (Dobson 1995: 135).

In the last couple of years the focus has moved towards the phenomenon of globalisation and a perception that existing internaitonal institutions have failed the poorer countries; that they should be revolutionised or drop-kicked straight out of the global arena. How much are these cries to do with heartfelt concern for the poor of the developing world, and how much to do with middle-class angst over a rapidly changing global order with new economic powers such as China and new uncertainties? Certainly, many of the IDPGs are working both sides of the street, protesting the global institutions and national development agencies while also taking more and more of their grants to fund their activities.

It was once easy to criticise the international development bureaucracy for leading a life of aloof leisure, jetting from conference to conference, inhabiting a world so far removed from the poor that they might as well be living on another planet. More and more this can be said of the parallel world of international NGOs, whose bureaucrats also hop around the world attending conferences and government meetings. Steve Hellinger, co-founder and president of the Development Group for Alternative Policies, notes that NGOs’ dependence on public monies “has affected the way they deal with policy issues. Instead of representing the interests of the people in the South, they are increasingly supporting the interests of the aid institutions” (New Internationalist, 285, 1996).

The relationship between the articulated goals of development pressure groups and the effect they have in the countries of the exploited was the subject of a documentary on Channel 4 Television aired in November 2000. The Hunger Business documents the frustrations felt by Africans who found development NGOs put their own preconceptions ahead of asking Africans what they needed or wanted. This led to aid exacerbating many of the conflicts in the region. As Kenneth Hackett of Catholic Relief Services said, “if food keeps them alive to fight a war, then so be it” (The Hunger Business). Aid donations may have been harder to come by if people knew the messy regional politics.

Pressure and policy

The distinctive nature of the British political and social scene has also contributed greatly to the rise in influence and power of development pressure groups. As far back as the Victorian period, there has been a strong tradition of like-minded individuals banding together to do good works, especially among the poor. Many of today’s British NGOs have their roots in the extensive network of missionary organizations established in this period.

Britain also has a tradition of seeking help when it decides to alter or expand its role in a particular sphere of influence, which was the case at the turn of the 20th century:

THE BRITISH GOVERNMENT DECIDED TO INCREASE ITS INVOLVEMENT IN THE SOCIAL AND ECONOMIC WELL-BEING OF ITS CITIZENS, THE FRIENDLY SOCIETY MOVEMENT WAS A FACTOR TO BE RECKONED WITH. THE MEDICAL PROFESSION ALSO CLAIMED TO SPEAK FOR THE GENERAL PUBLIC AS WELL AS ITS MEMBERS. (VAN DER VALK 1998: 112)

There are strong parellels between this time and the current political climate. Unlike the Conservative government before it, the Labour government under Tony Blair has made it explicit policy to increase funding of, and involvement in, international aid and development. It has broadened its areas of interest (thus needing expertise from NGOs) and is also seeking lobbying power in order to exercise greater influence in the global negotiating game to reform and alter major international institutions such as the World Bank and the International Monetary Fund. Its new priorities include poverty elimination by 2015, empowerment of women, human rights for all, making government work for poor people, including better health care, tackling the water crisis and expanding primary education (DFID).

These priorities dovetail well with those of NGOs such as WaterAid, Oxfam and Save the Children Fund, which also have a storehouse of experience and contacts in these areas.

To have any influence on policy-making in the British parliamentary system like-minded individuals must form interest groups.

OF ALL THE WESTERN DEMOCRACIES, BRITAIN HAS PERHAPS THE LONGEST-ESTABLISHED INTEREST GROUP SYSTEM. THUS, DESPITE THE LACK OF A WRITTEN CONSITUTION, BRITISH POLICY-MAKING HAS CERTAIN WELL-ESTABLISHED PROCEDURES – STANDARD OPERATING PROCEDURES – WHICH GENERALLY ACCORD INTEREST GROUPS A KEY ROLE IN THE POLICY PROCESS. (RICHARDSON 1993: 86)

Nowhere has this become more strongly felt than in international development. NGOs have altered what development means and broadened it to include a wide range of community activities. The symbiotic relationship is mirrored in the policy goals of the Department for International Development.

As Weir and Beetham note: “The relationship between organised interests and departmental officials varies across policy domains, but many interest groups perform an intimate role in the way policies are formulated and are often vital to policies being carried through in practice” (Weir and Beetham 1999: 271).

This is also a game in which presentation and professionalism wield influence. IDPGs invest heavily in a range of publications to communicate their views and use the latest in information technology to influence public opinion. As their funds have grown, they have been in the forefront of adopting the sophisticated marketing techniques developed by major corporations. This becomes a virtuous circle, in which more sophisticated communications and marketing creates a more professional public image and in turn draws in more funds. The more funds available to plough into modern communications and research, the greater the pontential impact on the government. Wealthy organizations “naturally achieve their objectives more readily than poorer pressure groups which do not represent powerful sectional interests whose cooperation government departments require” (Beetham and Weir 1999: 275).

Development pressure groups have in many ways been the beneficiaries of the same neo-liberal propensity to private execution as the UK’s business lobby. Contracting out and privatisation are a reflection of dwindling faith in the public sector’s ability to meet people’s needs.

There is also another factor influencing the IDPGs’ rise in power. Mulgan calls this a period in which “weak” organizations have the advantage over traditionally “strong” orgnisations such as the civil service or political parties (Mulgan 1990: 347). He sees both the marketplace and interest groups of like-minded individuals as offering more choice and opportunity than the traditional institutions of democracy. In this environment the opinionated pressure groups will be able to exert greater influence. They are fleet-footed, able to push the agenda ahead, while civil servants are hampered by protocol and hierarchies: “The most significant factors are the general ascendance of free market economics (Toye 1987) and its corollary, a belief that government agencies are ineffective” (Dolan 1992: 203).

These groups also benefit from the decline of rigid class-based politics in the UK. “As support for the two big class-based parties has diminished, so cause-based pressure group activity has won popular support” (Jones and Kavanagh 1994: 236).

They are quintessentially modern organizations, placing more value in intelligence-gathering and opinion-forming than in traditional project managment. As Clark notes, “The ‘software’ of their trade – ideas, research, empowerment, and networking – are rapidly becoming more important than their ‘hardware’ – the time-bound, geographically fixed projects, such as wells and clinics. In this age, information and influence are the dominant currencies rather than dollars and pounds” (Clark 1992: 193).

Ear to the ground: do the exploited have a voice?

According to the United Nations Development Programme, more than 1.3 billion people live on just US $1 a day (UNDP). Concern for the world’s most exploited is on the official development agenda of all Western governments. Most governments in the developed world explicitly acknowledge that extreme poverty is the most vicious form of exploitation that can be experienced by a human being. Awareness of the plight of people in developing countries is widespread, in that most people generally believe life must be, as Hobbes put it, “poor, nasty, brutish and short.”

One of the key claims of NGOs is that they have an extra ear to the ground when it comes to understanding the needs of the world’s poor. Certainly, the world has become a more vocal place with the rise in freedom of expression and electronic communications in many countries. As Covey remarks, “Democratisation, in its messy evolution in societies around the globe, tugs NGOs toward a more active policy-influencing role as more political space opens for people’s voices in public affairs” (Covey 1992: 167).

But there is now a growing body of evidence that development pressure groups are not as tuned in to the needs of the exploited as they claim. The advocacy role of these NGOs in Northern countries such as the UK has been criticised by NGOs in developing countries, who say they are making policy suggestions without consulting fully the people who would be most affected by them.

Covey adds: “Recent doubts expressed by Southern NGOs about the advocacy role of NGOs in the North (speaking ‘on behalf the poor’) provide one illustration of this difficult issue” (Covey 1992: 14).

Covey calls the devolution of power and funds to NGOs a phenomenon equivalent to the rise of the nation state in the 19th century (Covey 1992: 4). This is called “New Policy Agenda”, and is characterised by neo-liberal economics and liberal democratic theory.

IDPGs may express a concern for the exploited, but in practical terms they are often more accountable to their funders. Smillie notes:

DESPITE THE GROWING CONSENSUS THAT PEOPLE’S PARTICIPATION IS A HALLMARK OF GOOD DEVELOPMENT PROJECTS, NGOS ARE SELDOM FORMALLY STRUCTURED TO ENSURE THEIR ACCOUNTABILITY TO GRASSROOTS ORGANIZATIONS. IN FACT, NGO ACCOUNTABILITY PROCEDURES ARE MOST OFTEN DESIGNED TO MEET DONOR NEEDS RATHER THAN GRASSROOTS OBJECTIVES. (SMILLIE 1998: 170)

Research into social movements and advocacy organizations working with the poor has shown an overarching tendency to seek stability and co-optation over confrontation with elites. A study conducted after the turbulent and socially active late 1960s and 1970s found that:

IN THE LARGEST PART ORGANISERS TENDED TO WORK AGAINST DISRUPTION BECAUSE, IN THEIR SEARCH FOR RESOURCES TO MAINSTREAM THEIR ORGANIZATIONS, THEY WERE DRIVEN INEXORABLY TO ELITES, AND TO THE TANGIBLE AND SYMBOLIC SUPPORTS THAT ELITES COULD PROVIDE. (CLOWARD AND PIVEN: XXII)

The effect development NGOs have on the communities they seek to serve also is not wholly helpful. Many “NGOs are seen as eroding the power of progressive political formations by preaching change without a clear analysis of how that change is to be achieved; by encouraging income-generating projects that favour the advancement of a few poor individuals but not ‘the poor’ as a class; and by competing with political groups for personal and popular action” (Edwards and Hulme 1992: 20).

Hellinger criticises these organizations for often ignoring local views and destroying local initiatives:

THE POLICIES OF AID ARE BEING MADE FROM AFAR AND CREATING AN ENVIRONMENT THAT MAKES LOCAL-LEVEL DEVELOPMENT MORE DIFFICULT THAN EVER. PEOPLE ARE BEING FORCED TO LOOK CONTINUALLY OUTWARD FOR ANSWERS – FOR MONEY, MARKETS, ADVICE, TECHNOLOGY. THE SOLUTIONS ARE BEING FOUND LESS AND LESS OFTEN WITHIN THESE SOCIETIES. IT’S DEBILITATING. (NEW INTERNATIONALIST, 285, 1996)

Conclusion

There is ample evidence that international development pressure groups are in need of even greater scrutiny. Their power grew during the 1990s, and they have been targeted by international institutions and national governments to be the primary delivery mechanism for international aid projects. Much of this process has passed quietly by, with little open debate as to the suitability of these organizations to speak for the poor. The most vocal criticisms have come from NGOs based in developing countries, but they have proven to be a weak match for the generously funded publicity operations of Northern NGOs.

If NGOs represent the next major social and political transformation in the UK and around the world, then an open and vigorous debate is even more urgent. NGO leaders are not elected by universal franchise and are only answerable directly to the boards of their respective organizations. As Hancock informs us, international development is neither benign nor wholly beneficial. It is a major actor in the power dynamics of the world. “At a more general level, foreign aid – now worth almost (US) $60 billion a year – has changed the shape of the world in which we live and had a profound impact on all our thinking. Consciously or unconsciously we view many critical global problems through lenses provided by the aid industry” (Hancock 1989: xiv).

Less than 20 percent of aid actually reaches the poor (Raffer and Singer 1996), and two-thirds of the world’s poor live in 10 countries that together receive less than a third of overseas development aid (Raffer and Singer 1996). Surely this is testament alone to a failure to help the most exploited in their lobbying efforts. It is certainly an unimpressive trickle when taken as whole.

International development pressure groups are a large and wealthy lobbyist of the UK government. They are a vast economic sector with many vested interests, including paid staff, government contracts and the political agendas of their private donors. Their reach is global and they have a significant impact on the economies and societies of countries around the world.

There is ample evidence to suggest international development pressure groups are accountable to many masters; the world’s poor, unfortunately, are not always among them.

Pax Chaotica: A Re-evaluation of Post-WWII Economic and Political Order

A Steppe Back?: Economic Liberalisation And Poverty Reduction In Mongolia

The Sweet Smell Of Failure: The World Bank And The Persistence Of Poverty

ORCID iD: https://orcid.org/0000-0001-5311-1052.

Further reading:

Whilst there are many examples of charity sector abuse spanning the past 20 years, this story gives a flavour of what can go on: 

  1. Midlands News

Crooked Birmingham charity boss in plot to smuggle illegal immigrants into UK

“Pranvera Smith, 47, launched Freedom to Stay on Hagley Road in 2014 to supposedly help vulnerable people from her home country Albania gain asylum.

Instead, the greedy crook and partner Flamur Daka, 44, used the Big Lottery-funded charity as a cover for helping people smugglers.

Victims were charged up to £10,000 to be illegally brought into the UK by smuggling gangs. Once here they were persuaded and ‘intimidated’ into paying Smith a further £1-4,000 for benefit and immigration advice – a free service.”

In the headlines: 

The Guardian:

Save the Children ‘let down’ staff and public over sexual misconduct claims

 This article is more than 8 months old

Charity Commission condemns ‘serious failures’ in handling of harassment allegations against senior staff 

The Times: Fat cat charities have forgotten their principles

The National: 

Save the Children and IRC dragged into Oxfam abuse scandal

A report leaked this week showed a charity headed by David Miliband had its funding suspended over allegations

London-based Muslim-aid charity is accused of funding human trafficking gangs smuggling Somali migrants into Europe via Greece

  • Croydon’s Al-Kahir Foundation was accused of helping migrants reach Europe
  • Notis Mitarachi, the Greek minister for migration, made the severe allegations
  • The Minister claims the Muslim charity funds and aids human trafficking gangs 
  • He alleges migrants’ testimonies to Greek authorities show the Foundation paid for a boat crossing in which 34 Somalis drowned sailing from Turkey to Greece

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2021