The Political Economy of Thatcherism:
Undergraduate Dissertation
Course Tutor: Dr. Roger Middleton
The implications of the Pergau dam scandal in terms of the power-play of commercial and developmental interests in the allocation of Aid-and-Trade Provision (ATP) funding
Alexander Gordy (History BA 3rd Year) - 19th April 2004
For a full pdf copy of this paper, contact alexgordy@gmail.comAlternatively, visit http://pergaudam.blogspot.com/ for an online versionI. INTRODUCTION
The Pergau dam scandal, involving the funding of a huge developmentallydubious hydroelectric dam in Malaysia, revolved around the linking of arms sales tooverseas aid, in the form of Aid-and-Trade Provision (ATP) funding. The linkage came topublic attention when a senior civil servant in the Overseas Development Administration(ODA), Sir Tim Lankester, voiced objections over the funding of the un-economical andenvironmentally damaging dam in 1991. His objections were over-ruled by the thenForeign Secretary, Douglas Hurd. Several investigations into the reasons for the UnitedKingdom (UK) government’s proceeding with the funding of the dam project in Malaysiaeventually threw the spotlight on the linkage of the two deals, which was against statedgovernment policy.
Through the investigations into this scandal, both by parliamentary committees and newspapers, the operation of the government’s decision-making process, in the context of the ATP, was opened up to public scrutiny. Interest groups such as Non- Governmental Organisations (NGOs), backed by influential academics, used the scandal to highlight the links between arms transfers and aid provision in the Conservative government’s record.
In our analysis of the Pergau dam scandal, we set ourselves the task of chronicling the primacy of commercial interests over developmental ones at every stage of the approval process for ATP funding. We will use the Pergau affair to illustrate the fact that the functioning of ATP is predisposed to favour commercial interests over developmental ones. The question of the power-play between commercial and political interests in the allocation of aid reflects a continuing dichotomy within the Conservative party of Thatcherite free-market advocates on the one hand and paternalist ‘One Nation’ proponents on the other. The implications of the scandal and its review in the High Court also link into the increasing shift towards judicial oversight of ministerial decisions.