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London, 26/02/2013

The Politics and Economics of Britain’s Foreign Aid:
Exchanging contracts for the Pergau hydroelectric dam in Malaysia

Exchanging contracts for the Pergau hydroelectric dam in Malaysia

MBI Al Jaber Foundation Trustee, Sir Tim Lankester, gives a talk at SOAS about the Pergau dam affair, a controversial project linking foreign aid and a major arms deal.

The Foundation was delighted to support Sir Tim Lankester’s lecture, which took place at the School of Oriental and African Studies. The lecture focused on Sir Tim’s recent book, “The Politics and Economics of Britain’s Foreign Aid”, which reviews one of Britain’s most controversial aid projects: the funding the Pergau hydroelectric dam in Malaysia, now considered “a prime example of how not to give aid”.

The huge cost of the project, its links to an arms deal and its very weak economic case, led Sir Tim, who at the time was Permanent Secretary of the Overseas Development Administration, to seek formal ministerial direction before proceeding. Allegations of corruption from the British press led the Malaysian government to temporarily prohibit all public sector contracts with British firms and the government of the day was subjected to fierce criticism in Parliament and in the media. Finally, after two parliamentary enquiries, the aid was deemed to have been unlawful.

Sir Tim worked at the World Bank and the British Treasury before serving as Private Secretary (Economic Affairs) to Prime Minister James Callaghan and then to Margret Thatcher. It was later on in his career, when he was serving as Permanent Secretary to the Overseas Development Administration, that he was placed perfectly to provide a non-partisan account of how government can go so wrong.

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