Month: October 2014

UK Annual Foreign Aid Budget – a triumph of political pride over political reality

Why would any political party in the UK try to enshrine in law, a commitment to spending 0.7% of gross national income on foreign aid? Especially when other UK government budgets are being capped or cut, to meet austerity targets?

The UK recently joined the ‘G07’ group of countries (Luxembourg, Denmark, Sweden, the Netherlands & the UK) who now give 0.7% (£11.4B in the UK’s case in 2013, a 30.5% rise from the prior year) of gross national income in foreign aid. Of the £11.4B given in foreign aid, £2.3B went to African countries and £1.7B to Asian countries.

Comparing those same G07 countries in 2013 on a GDP/capita basis in USD equivalents showed a wide difference between the UK and the others.

 

GDP in
USD/capita
Luxemburg          111,162
Denmark             58,894
Sweden             58,269
Netherlands             47,617
UK             39,337
Simple Average             63,056

Also, it’s worth noting two other things – firstly, there were a further 15 countries with GDP/capita higher than the UK, that don’t make it into the G07 list. These included USA, Germany & France. And secondly, on a GDP per capita, based on purchasing power parity (takes into account the cost of living in each country), the UK sat at number 26 on that list.

Then there is the wider debate about how effective giving foreign aid is and how some of that money could be instead spent on worthy aid projects in the home country. Perhaps the most important point is that no EU or UK politician has the right to protect the UK foreign aid budget from cuts, when other government budgets are necessarily being cut.

Another important point is that there needs to be wider public debate about how much the UK spends on border control (has suffered budget cuts already), the consequences of inadequate border control and the foreign aid budget (a 30.5% rise over 2012), which David Cameron claims minimises the flow of refugees into the UK.

Some complimentary or mutually exclusive suggestions for the future foreign aid budget:

  1. The UK adjusts its foreign aid contribution to its ranking of GDP per capita in purchasing power parity. When more, richer per capita nations raise their contributions, the UK can then proportionately raise its foreign aid contributions also.

 

  1. The UK promptly terminates the £11.4B foreign aid budget and instead states that the rising contribution it makes to fund the EU government in Brussels now includes the UK’s contribution towards foreign aid and EU border control, leaving it to the EU government to make efficiency savings and fund an EU foreign aid spend on behalf of all EU members.

 

  1. The UK promptly terminates foreign aid to any country engaging in large scale military or space exploration projects. India is a prime example of the later.

 

  1. The UK promptly deducts from its foreign aid budget each year, all costs associated with returning refused asylum-seekers to their home country and processing foreign nationals in the UK Justice system (asylum hearings, prisons etc).

 

  1. The UK government creates a formula where, as the overall cost relating to seeking asylum in the UK rises, the overall foreign aid budget falls by the same monetary value.

 

  1. The UK government commissions a study into how the impact on the foreign aid budget could be increased significantly. For example, how could far more of this budget be spent directly reducing or bypassing corruption in the parts of the World receiving foreign aid, before money is given to help beneficiaries in those same countries.

 

Weblink references

http://www.theguardian.com/global-development/2014/apr/03/uk-meets-foreign-aid-target

http://knoema.com/sijweyg/gdp-per-capita-ranking-2013-data-and-charts

http://www.telegraph.co.uk/news/politics/10938619/David-Cameron-facing-Tory-revolt-over-foreign-aid.html

http://www.bbc.co.uk/news/uk-politics-20265583

What purpose does the BBC programme ‘The Apprentice’ serve?

Yesterday, I watched episode four in the latest series of the BBC TV show ‘The Apprentice’.  At the end of it, Alan Sugar fired all three of the poorest performers (Ella Jade Bitton, Sarah Dales & Steven Ugoalah). But not before they lost all professional and personal dignity, squabbling in the board room, with the project manager of the losing team (Ella Jade), pleading repeatedly with Lord Sugar to be given another chance.

A triple elimination in one week, along with post-dismissal pleading was a new low point for the series. Is the underlying quality of the applications really that bad, is the screening process to allow them to participate in the series the problem, or is it just the nature of the task that creates a race for bottom place? On a related note, if the CV’s of the Apprentice wannabes really are as great as they claim, why do so few of them step up to lead an ‘all stars’ team in any given episode?

I know one of the purposes of the series is entertainment and that Lord Sugar donates his sizeable series fee to charity. However, the viewer cannot help but wonder, why are the end results of each task so mediocre, whether creating their own video channels to go on the World’s largest video-sharing site, or simply selling market stall products (with TV cameras rolling that in themselves, attract curious punters)?

For any of the wannabe apprentices, especially in the early episodes of the series, doesn’t it occur to them that their best chance of not appearing in the bottom three for elimination is to put maximum effort into effective teamwork?

Arguably, for Lord Sugar to go into business with the winner, two qualities will stand out – one is very clever business ideas, executed well. And the second is stunning leadership qualities. Perhaps if the ‘prize money’ was quadrupled to £1M, it might attract a superior group of wannabe apprentices and reveal in the tasks, a far more stunning range of ideas, delivery and leadership in action. From Lord Sugar’s perspective, does he want to go into business with someone with amazing potential for a mere £1M investment, or go into business with someone who believes their own hype, for a very expensive investment of £250,000?

Personally, I’d far rather watch a version of The Apprentice, with:

  • less tantrums and loss of human dignity in the boardroom,
  • less smarmy sales pitches to very savvy and seasoned business buyers (even after 3 prior episodes, some project managers still seem to think you can sell complete lemon products, solely by baffling the buyer with youthful sales charm),
  • less editorial emphasis on the backchat between prima-donna contestants during the task,
  • more coverage during the task of heroic teamwork to problem solve,
  • most importantly of all, FAR more design-brainstorming time spent at the front end of the task – none of the wannabes seem to realise that time spent doing that well will pay off massively in the final Boardroom analysis.

As well as delivering far better end results, a change in emphasis might restore some viewers’ beliefs in business activity (and Lord Sugar’s TV series emphasis) as a positive economic force.

http://www.bbc.co.uk/iplayer/episode/b04n9pcd/the-apprentice-series-10-4-online-video-channel

http://www.independent.co.uk/arts-entertainment/tv/news/the-apprentice-2014-alan-sugar-gets-rid-of-the-nohopers-with-triple-elimination-9826264.html

Lastly, a real business innovation contrast with the above process. Two Imperial College of London computing graduates Ashley Brown and Simon Overell recently launched an online fraud-busting start up company (spider.io) which was then acquired by Google. Granted it was at least a year of intensive effort to create the end result (not two days as for The Apprentice tasks). My question is, would university graduates of the calibre of Mr Brown and Mr Overell have been attracted to join a series like The Apprentice, or is the instant loss of 50% control and the incentive money just too small to be worth bothering about?

Leverage – can it help to reframe the business problem?

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Leverage