“We need companies to invest in us, not people to tell us how to build up the country,” Burundian business woman Consolata Ndayishimiye says. The Social and Economic Council of the Netherlands (SER) agrees, investment in business is needed in underdeveloped countries. The council presented its recommendations to Deputy Development Minister Ben Knapen on Wednesday.

There is more and more criticism on development aid. Why do countries remain so poor, when we have been giving them money for so long?

Henk Veldman of the Netherlands African Business Council (NABC) says:
“Government plans are always megalomaniacal. Ending poverty, good governance are big issues which are impossible to measure or realise.”

But NGOs disagree. Poverty cannot be eradicated by trade, so traditional aid has to continue, thinks NGO ActionAid.

Too white
Zin Bekkali of investment manager Silk Invest says NGOs are not efficient.

“The money often stays in the West. To put it bluntly: NGOs are too white, not enough local people are involved in projects.”

Silk Invest focuses on markets in Africa, Asia and the Middle-East. “We think investment benefits countries in the long run.”

And Deputy Minister Knapen is listening. There is plenty of room for trade in his policies. Businesses that invest in local companies and trade relations, stimulate the local economy and benefit the whole community.

The SER report says: “A developed private sector is crucial to be able take advantage of increased employment and to escape poverty. An average nine out of ten people in developing countries depend on the private sector.”

Profit
Making profit in developing countries is good. “The more profit a company makes, the better,” says Mr Bekkali. “ It means projects are more efficient and focus more on the long term.”

Development organisation ActionAid fiercely opposes the latest government strategy and recently concluded in a report:

“Development aid does help. Fewer and fewer countries depend on aid and are better able to support themselves.”

ActionAid is referring to the proportion of the national budget that is provided by foreign aid. This percentage has dropped over the years. In Rwanda, this figure was 86 percent in 2000, by 2009 it was 65 percent.

Henk Veldman of the Netherlands African Business Council thinks differently. According to him, dependence on aid is a mentality and not just a percentage figure. During a recent trip to South Sudan, he saw how much the population still depends on aid. “Entrepreneurs complain how expensive labour is in South Sudan. People have lived in refugee camps for 20 to 30 years and are not used to working. The work is done by Kenyans or Ugandans. The South Sudanese wait for NGOs to feed them. Aid often just makes people dependent.”

Corrupt
Mr Veldman and Mr Bekkali welcome the new approach, but also see the potential difficulties.

Mr Veldman:"There has to be a change of mindset. People who used to be involved in human rights have to start thinking about trade.”

For instance an embassy in an African country asked his organisation which companies are located in the country. The embassy wanted to start implementing the new policy straight away.

Mr Veldman also criticises television ads which appeal for donations for starving Africa. They give people the impression that there is no point in investing in Africa or doing business there because it is a bottomless pit where no-one has any money. And when people do have money there are all corrupt. “Anyone who has ever been to Africa knows better.”

Wealth creation
ActionAid does not want the existing policy to change. Nathalie Ankersmit of the organisation said, “We don’t think you can help the poorest people in society this way. Promoting Dutch trade is not the most effective form of aid, because it is not targetted at the poorest people in developing countries.”

The new policy will mean NGOs will have to change their spots. Like Ms Ndayishimiye says: “It not about 'poverty reduction', it's about 'wealth creation.’”