The Impact of the United Kingdom's Bilateral Aid Programme on British Industry

The impact of multilateral and tied bilateral aid on the UK economy

“…One is to argue that a certain number of jobs are associated with each €lm of exports and assume this holds for aided exports; the Minister for Overseas Development argued in this way that each Elm of aided exports resulted in 154 jobs in 1976 (cited in May and Dobson, 1979:17). Micro-studies of firms winning orders provide harder figures: there have been estimates of 127 jobs per €lm aided exports in 1976 (May and Dobson, 1979: 18), roughly 199 over 1979-81 (MacQuaide and Toye, 1986 and the equivalent of 65 per Elm in 1985/6 (Hawker Siddeley Power Engineering, 1986, in a study of an Aid and Trade Provision order).2 This declining trend is consistent with increasing labour productivity over the period.…”

“…Second, and receiving greater attention, are arguments that aided exports create employment; even if there were no compensating orders in the absence of aid, it does not follow that new orders imply new employment. A majority of firms surveyed in the mid-1970s believed they would have won the aided exports even without aid (May and Dobson, 1979), but 75 per cent of firms who won exports from tied bilateral aid in the early 1980s, and who accounted for 75 per cent of all suchexports, said that the aid was necessary to win orders (May, Schumacher and Malek, 1989:153). Furthermore, even if aided exports are not met from existing output, it is still possible that the increased output can be met by overtime and increased productivity rather than increased employment.…”

“…The 'major industries' are Mechanical Engineering (mostly machinery and plant); Electrical Engineering (the range of electrical and telecommunications equipment); Vehicles (motorised road vehicles, shipbuilding and railway stock); Chemicals (fertilisers and pharmaceuticals); the Construction and Iron and Steel industries. Detailed analysis of the impact by industry is available elsewhere (May and Dobson, 1979;May, Schumacher and Malek, 1989;Morrissey, 1989a).…”

The Changing Pattern of European Community Trade with the Third World

“…The practice continues of urging on aid recipients the implementation of projects for which a donor has goods, services and unused capacity available, thus distorting Idc development priorities and smooth programme execution (Karmiloff, 1982). A detailed investigation of the benefits of aid-tying to British firms revealed that, in shipbuilding, the UK had financed purchases by developing countries specifically to offset downturns in commercial orders, to ease the problems of running down a declining industry and to reduce the rate of redundancies (May and Dobson, 1979). Aid-tying has also been shown to have helped in the promotion of many other British goods that figure among the dynamic Idc imports listed in Table 7 (see also Cable and Wheale, 1982).…”