A few days ago, the forward-thinking head of the pharmaceutical giant GlaxoSmithKline explained why his multi-billion-pound global business was happy to slash the price of essential vaccines for children in some of the world’s poorest countries: Andrew Witty wants to make more money for his shareholders. That’s arresting enough, but he also wants GSK to do good because, he argues, we as a society expect it to. When trust in politics, institutions and corporations is at an ebb, business must adjust to the growing ethical expectations of its consumers. Companies used to worry about keeping pension funds happy; now they must think about the power of global public opinion to hold them to account. Reputational and commercial success lies in integrity.
Rather than turn itself into a charity, though, GSK is shifting its business model. It recognises that while it can still make money in countries that can afford the spiralling cost of medical research and development, it can no longer make money on the backs of those who have the least. As a result, it now returns a fifth of the profits it makes in 37 of what are known as the Least Developed Countries – the poorest of the poor – to invest in local healthcare. This year that amounts to £3.5 million, a sum Mr Witty is the first to admit is small beer. But GSK has also agreed to offer its anti-diarrhoea rotavirus vaccine in developing countries at cost price, a 95 per cent discount on the retail one.
This is how he put it: “As the chief executive of GSK, I have a vested interest in immunisation. My company generates significant vaccine sales in the developed world, creating profits that are important as we must make a healthy return for our shareholders, deliver sustainable financial growth to invest in new research to discover the vaccines and medicines of tomorrow and provide jobs for our employees. But to be successful in the long term, we must also operate in a way that is in step with society and its expectations.”
Adjust that statement slightly, and you have the broad lines of David Cameron’s justification for increasing what Britain spends in aid each year, a sum that is due to rise to £9.4 billion by 2015. As the chief executive of UK plc, the Prime Minister has a duty to the nation’s shareholders to deliver sustainable growth and create jobs, while keeping in line with society and its expectations. He calculates that a small investment in improving the condition of some of the benighted parts of the world can produce vast returns for Britain in the form of increased security, trade, diplomatic clout and goodwill. The billions we are pouring into Afghanistan teach us that spending a little now can save us substantial sums later if we can avoid having to intervene to correct the consequences of neglect. Like Mr Witty, he believes that doing good is commercially sound.
That connection between charity and commerce is at the heart of the profoundly conservative case Mr Cameron is advancing in favour of international aid. He set it out on Monday at the Global Alliance for Vaccines and Immunisation (GAVI) conference in London, an international gathering that attracted £2.6 billion in donations towards a global immunisation programme against pneumonia and diarrhoea, the two biggest killers of children under five. It is predicted to save four million young lives. Britain, in the chair, offered £814 million in new money. Bill Gates produced £613 million from his philanthropic foundation. The conference surpassed its expectations by about £500 million, impressive going in an age of austerity when major Western powers are shying away from foreign financial engagements. It was one of those rarities, an international gathering noticeable more for results than rhetoric. Britain found itself garlanded with praise.
Mr Cameron was the star turn, his speech rewarded with a prolonged standing ovation and whoops of delight from the assembled worthies of the aid industry. Yet he knows that the plaudits of those who rely on the largesse of the taxpayer have little value. The children whose lives will be saved by a sharp increase in vaccination rates might thank him in time. But what he needs above all is the support of those footing the bill for his contrarian strategy of exporting charity abroad when he is busy cutting back at home. His betting is that he can persuade the British public that what he is up to is worthwhile, and to do that he is making a case he believes is built on core Tory principles of self-interest, duty, economic liberalism and national security. A recent survey of Tory members by the ConservativeHome website found that as Mr Cameron’s aid policy was explained, opposition fell away.
Public opinion on aid has been soured in part by the too-frequent cases of development gone wrong through waste and corruption. Then there is the argument that a minority of his MPs put to Mr Cameron, that in an age of austerity, charity should begin at home. They juxtapose the rise in aid spending with what is being done to the defence budget and claim, with scant justification, that Liam Fox is on their side. Why, they ask, are we devoting scarce resources to foreigners when we could do so much with the money here? They point to India, one of our major recipients, a country that accounts for a third of the world’s poorest people and records higher rates of malnutrition than sub-Saharan Africa, yet spends £1.5 billion a year on its space programme, £20 billion on defence, and gives aid to Africa. Andrew Mitchell, the Development Secretary, makes a compelling case for the diplomatic value of investing in the economic potential of such a lucrative growing market for Britain, but had to concede at the weekend that such largesse could not continue.
Yet the reasons for pressing on are straightforward. There is a moral case for helping the poorest on the planet: not everywhere, not in all circumstances, but as citizens of what is even in these straitened times one of the wealthiest nations on earth, we have a duty to help where we can. What’s more, we gave our word. The last government, and then this one, put its name to the pledge to raise UK aid spending to 0.7 per cent of GDP. We may have a Government that is proving adept at changing course, but in diplomatic terms it would be a source of national shame to use the figleaf of momentary economic circumstances to resile from that commitment. It is worth remembering that the substantial increases in our aid spending are built in to the final years of the parliament, when we might hope to be better able to afford them. For all the talk of saving a billion here or a billion there, it is not £3 billion that will decide our fate.
Indeed, the sums at stake are small when overall government spending tops £700 billion a year. For a modest outlay, we gain a place in the international premier league, just when new powers are testing their global reach and vying for access to markets. That fraction of GDP, added to our remaining military reach, is an ante that buys a place at the top table in diplomatic terms. As a nation, we have always expected more of ourselves, and so should embrace the straightforward commercial outlook modelled by GlaxoSmithKline and developed by the Tories: our history is one of going out to seek opportunities, of hard-nosed calculation about the nation’s diplomatic and commercial interests. By helping others to grow, we grow ourselves.
Source http://blogs.telegraph.co.uk/
