Britain delays aid over air traffic control system

Britain has delayed payment of 10 million pounds Sterling (about US $14.3 million) in budgetary support to Tanzania because of concern about the government's commitment to poverty reduction, especially in the light of its intention to spend US $40 million on a controversial air traffic control system. British Secretary of State for International Development Clare Short ordered the delay ahead of an international report on Tanzania's planned purchase of the 28 million pound ($40 million) British military air traffic control system, British and international media reported on Wednesday, citing officials in her Department for International Development (DFID). The International Civil Aviation Organisation was investigating whether or not the military control system is appropriate for Tanzania, and was expected to report its findings next week, the German Press Agency (dpa) quoted a DFID spokeswoman as saying. An earlier report from the ICAO concluded that the BAE technology was primarily for military use and that Tanzania could buy a better system for a quarter of the price, the Guardian newspaper reported in Britain on Wednesday. The British government granted an export licence for the system, to be supplied by British aerospace company BAE Systems, in December 2001. The licence - required because of the system's military capability - was approved only after a cabinet row over the British government's commitment to tackling poverty in Africa, in which Prime Minister Tony Blair backed the sale despite opposition from Short and Chancellor of the Exchequer, Gordon Brown. Short and Brown argued that the sale should be stopped because the high cost of the system could threaten Tanzania's sustainable economic development by diverting spending from health, education and agriculture. This week's decision to delay the release of budgetary support, "pending the review of Tanzania's air traffic control system, was based on Tanzania's commitment to poverty reduction," Short said in a statement quoted by dpa. The delayed payment is part of 65 million pounds of budgetary aid that Britain has allotted for Tanzania this year to help it reduce poverty. Some 35 million pounds was handed over in October, and the delayed tranche was due for transfer this month, according to the Guardian newspaper in Britain. Tanzania has declared that it intends to press ahead with the purchase of the system whatever the civil aviation report recommends as it is legally unable to break its contract with BAE, it reported on Wednesday. Tanzanian President Benjamin Mkapa has said the country needs the new system to replace obsolete technology, but the World Bank has previously criticised it, saying it is unsuitable and over-expensive. The Bank has estimated that a suitable system should cost about $10 million. Mkapa pledged in November 2001 to use the debt relief Tanzania secured under the Heavily Indebted Poor Countries (HIPC) initiative to "strengthen support for education, health, water, roads and other priority sectors". Despite an economic reform programme that has won the praise of donors, Tanzania remains one of the world's poorest countries. The nongovernmental organisation Oxfam has suggested that $40 million would pay for basic health care for 3.5 million people. With a structure in place to focus its efforts to tackle poverty and additional resources available to it as a result of HIPC, the government in Dar es Salaam now has the possibility of delivering real improvements in the quality of life for most Tanzanians, according to humanitarian sources. Foreign Minister Jakaya Kikwete said recently that Tanzania was a sovereign country and it was insulting to be told how and on what it should spend money. However, critics of the government's plan to buy the BAE system point out that one-third of public spending is financed by foreign aid, Tanzania is struggling to pay over $100 million a year in debt servicing (even after recent debt write-offs) and per capita spending on health is only about $3.5 a year - which makes the manner in which the country spends debt relief a matter of some concern. Tanzanian civil society organisations in February criticised Mkapa's government for a lack of transparency over the proposed purchase, and the British government for issuing the licence for a system "that is inconsistent with their international aid, debt relief and sustainable development policies." [see http://www.irinnews.org/report.asp?ReportID=20848] They urged the governments of Tanzania and the UK, as well as the donor community in general, "to take seriously their collective commitment to open government and pro-poor policies, which will fail miserably if such murky deals are allowed to proceed unsanctioned." "Some serious issues have been raised about the government of Tanzania's spending," the Guardian on Wednesday quoted an official from DFID as saying. "We have to be convinced that governments we support are committed to poverty reduction and that they are following it through." The irony is, humanitarian sources informed IRIN, that Tanzania's poverty reduction strategy is the framework within which Britain gives its budget support - and this is specifically intended to strengthen economic management, deliver pro-poor economic growth and improve government accountability to civil society.