Adam Smith International

Adam Smith International (ASI) is the consulting arm of the conservative think tank, the Adam Smith Institute. While some web-based resources describe the two as entirely separate, Baroness Amos described Adam Smith International as "affiliated" but financially independent in 2004:

Adam Smith International Limited, which is the consultancy arm of the institute, is a separate organisation. It is affiliated to the institute as a self-financing commercial organisation.

On its website ASI calls itself "a leading independent international development consultancy, based in London with a registered office in Delhi and major project offices located in developing and transitional countries worldwide." Its aim is to apply its professional and consulting skills "towards improving the quality of life for the citizens of countries facing economic, political and social change or uncertainty".

It adds that its core expertise lies in the fields of government and enterprise/utility reform and in a range of closely related critical support areas, notably policy communications and labour reform. We are developing our expertise in the education and social development fields to build upon our existing track record in these sectors.

ASI says it:

has an unrivalled record of delivering results in complex and highly political environments on behalf of donors including DFID and the FCO. For example, we mobilised at short notice to set up from scratch a Prime Minister's Office and Cabinet Office in Iraq and have been providing public administration reform assistance ever since. In Afghanistan we are developing and supporting counter narcotics institutions at both central and provincial levels. In Palestine we established the new Prime Minister's Office and Cabinet Office and now run DFID's long-term programme of public administration reform within the Palestinian Authority, as well as having run the unit supporting Palestinian negotiators on behalf of 5 bilateral donors since 1999. In Liberia we are managing a civil service reform programme for DFID and in Sierra Leone are taking executive control of the Ministry of Mineral Resources, seeking to turn it into an effective revenue-generating agency.

Relationship with Adam Smith Institute

While some web-based resources describe the free market think tank the Adam Smith Institute and Adam Smith International as entirely separate, Baroness Amos described Adam Smith International as "affiliated" but financially independent in 2004:

Adam Smith International Limited, which is the consultancy arm of the institute, is a separate organisation. It is affiliated to the institute as a self-financing commercial organisation.

Baroness Amos's attempt at clarification came in answer to a question to the government in the House of Lords from Baroness Northover, as to:

What criteria they considered before giving the Adam Smith Institute £7.6 million in aid money last year for consultancy work?

Baroness Amos defended the grant as follows:

the Department for International Development awarded three contracts to the Adam Smith Institute worth a total of £7.7 million in the past financial year. Each was awarded following open international competition on the basis of published evaluation criteria.

Controversies/issues

A failed water privatisation deal in Tanzania has caused criticism as "many western companies are accused of profiting from the poor and raising prices above what they can afford". In this particular case, Adam Smith International, sister organisation of the free market UK think tank Adam Smith Institute, is accused of having spent the money provided by the Department for International Development in order to provide advice to the Tanzanian government for a £250,000 video clip promoting privatisation.

The British government is accused of being at least partly responsible for the failure of this project. "The Department for International Development (...) handed £273,000 of British taxpayers' aid money to British consultancy firm Adam Smith International for glossy public relations materials, including the pop song, to persuade a sceptical public of the benefits of the sell-off."

ASI projects and the DFID

Projects ASI has worked on include:

• A project for the World Bank on "a review of Rwanda’s essential utilities (roads, telecoms, water, gas, electricity, etc.), an assessment of the current levels of access to these utilities and a series of recommendations for involving the private sector to increase the efficiency of their delivery."
• Advising the government of Rwanda on the privatisation of the Pfunda tea factory which was sold to a UK based tea trading company, LAB International.
• In the Indian state of Andhra Pradesh in 1998, ASI established "a semi-autonomous body known as the Implementation Secretariat (IS)" which "was given the responsibility of reviewing the status of 87 state-owned enterprises and cooperative societies." On its website, ASI states that "to date, more than fifty enterprises and cooperatives have been privatised, disinvested, closed or restructured, creating over US$110m of revenue for the Government of Andhra Pradesh and making fiscal savings of over $300m."
• In Ghana since 1999, ASI has been working on a project funded by the UK’s Department for International Development (DfID) DFID to develop proposals on water supply issues. DfID asked ASI has to help a government regulatory body to develop a pro-poor regulatory social policy that will result in universal access to affordable water.
• In January 2004, ASI hosted a major international conference in Dhaka, Bangladesh, with assistance once more from DfID, promoting its preferred free trade policies including canvassing a South Asia Free Trade Area (SAFTA) and the repeal of the "highly restrictive" Multi-Fibre Arrangement on textiles.
• In Iraq, with DfID funding, ASI is working on a project to "assist three vital Iraqi ministries (Finance; Planning & Development Coordination; Municipalities & Public Works) in building emergency capacity for the immediate provision of vital services. ASI is involved in laying the foundations for long-term reform".

UK government contracts

In January 2004, House of Commons hearings revealed the following funding for international operations:

Year	Project title	Current value (£) (original contract value plus cost of any increases or extensions)	Country
1999	PR Unit Support for Parastatal Sector Reform Commission (PSRC)	430,625	Tanzania
1999	Privatisation Project Phase 3 and 4 Managing Consultant	1,718,736	Guyana
1999	Privatisation Agency Support Project Consultancy	560,752	Zimbabwe
1999	Technical Assistance for Public Enterprise Reform in Orissa	3,667,571	India
1999	Assistance to the Palestinian Negotiations Affairs Department	9,131,555	West Bank and Gaza
1999	Additional Support to the Privatisation Board	106,241	Bangladesh
1999	UK-Ireland Privatisation and Regulation Study Tour	11,145	Tanzania
1999	Medium Term Programme of Capacity Building for PURC	1,559,960	Ghana
1999	Initital Support to the Budgetary Processes of the Government of Macedonia	44,315	Macedonia
2000	Rehabilitation of Cyclone Damaged Lift Irrigation Points in Orissa	1,296,327	India
2000	Seminar on Export Credits and Developing Countries	102,594	United Kingdom
2000	Lead Adviser to Parastatal Sector Reform Commission (PSCR)	229,966	Tanzania
2000	Russia Trade Policy Project	1,199,986	Russia
2001	Conference on Disinvestment	70,000	India
2001	Support for Public Sector Undertaking Reforms & Social Safety Net in Madhya Pradesh	80,000	India
2001	PSCR: Water Privatisation and Regulation Study Tour	54,924	Tanzania
2001	Communications Film for Department of Disinvestment	89,500	India
2001	Consultants for Standards, Technical Regulatory Barriers Programme	92,870	Global (non project specific)
2002	Trade Training for DFID Staff	20,075	United Kingdom
2002	Pilot Training and Capacity Building in International Watercourse Law	151,008	Kyrgyz Republic
2002	Trade Training for DFID Staff-Bangkok	32,328	United Kingdom
2002	Support for Capacity-building in the Ministry of Finance and Central Bank	3,277,815	Afghanistan
2003	Support Services for Public Enterprise Restructuring in South Africa	6,363,435	South Africa, Republic of
2003	Support to Water Sector Regulation by PURC-Ghana	1,079,100	Ghana
2003	Andhra Pradesh Economic Restructuring Programme-Public Enterprise Reforms, Phase II	416,435	India
2003	Economic Support within 1st Military Division HQ Basra.	55,510	Iraq
2003	Economic Development within 1st Military Division HQ Basra.	119,848	Iraq
2003	Support to the Office of the Prime Minister and to the Cabinet Office.	100,400	West Bank and Gaza
2003	ITD-DFID Staff Training	288,685	Global (non project specific)
2003	Asia Trade Consultancy	44,200	United Kingdom
2003	International Lawyer within 1st Military Division HQ Basra.	131,868	Iraq
2003	Economic Support to Coalition Provisional Authority South (CPAS)	111,255	Iraq
2003	Secondment of Negotiations Support Staff to the Office of Prime Minister.	75,800	West Bank and Gaza
2003	Legal Adviser within Coalition Provisional Authority South (CPAS)	72,925	Iraq
Source

Funding the Palestinian negotiating unit

Most official and semi-official Palestinian organizations depend on foreign funding, and the key Negotiations Support Unit (NSU) which is a support group to the Palestinian Negotiations Affairs Department is funded indirectly by the British government via ASI (the government funds ASI).

A 2008 Stabilisation Unit brochure gave an overview of this work under the heading 'Building capacity in the Palestinian Authority':

ASI has been providing support to the Palestinian Authority (PA) for over a decade. Since 1999 we have assisted the PLO in preparing negotiation positions across a range of issues, from allocation and management of natural resources to complex refugees and borders issues. This project has provided Palestinian negotiators with access to high quality professional support which has transformed the nature of the negotiating process with Israel. ASI is also implementing DFID’s public administration reform programme, which aims to enable the PA to provide more efficient, transparent and fiscally sustainable service delivery commensurate with the standards of a modern democratic state.

Khaled Amayreh, an eminent Palestinian journalist, writes:

Palestinian mediocrity, or even incompetence, in negotiations with Israel, is not imputed to lack of financial and human resources. The main reason may well lie in corruption at the highest levels and virtual absence of accountability. The PLO Negotiations Affairs Department (NAD) has at its disposal the services of the Negotiations Support Unit (NSU), which has received tens of million of dollars of funds, but has done very little to make Palestinian negotiators better equipped to face their Israeli counterparts.
Just take a look at the document formulated jointly between Israel and the PA at the last minute at the Annapolis conference. This document, which the NSU helped formulate, was completely void of any call for ending the manifestly criminal blockade of Gaza, the removal of Israeli checkpoints and roadblocks in the West Bank or release of Palestinian prisoners from Israeli dungeons and detention camps. Moreover, not a word was mentioned about freezing Israeli settlement expansions. The NSU is funded and effectively controlled by the Adam Smith Institute (ASI), a think-tank based in London which is vulnerable to pressure from pro- Israeli circles. For example, two years ago, the ASI forced the NSU to fire two highly-qualified Palestinian-American lawyers, Michael Tarazi and Diana Butto, for going too far in defending Palestinian rights, especially during TV debates with Israeli spokesmen. According to inside sources, one of the persons who pushed for firing the two Palestinian-American lawyers is Glenn Robinson, the author or co-author of the controversial RAND project "The Arc: A Formal Structure for a Palestinian State". Eventually, Tarazi and Butto were accused by pro-Israeli lobbyists, including some British MPs, of hindering the development of the Palestinian Ministry of Information and of not ensuring sufficient coordination with the PLO. Of course, these accusations were merely red herrings.
ASI defines itself as the UK's leading innovator of practical market economic policies. The institute's main focus is on reforming governments and state enterprises in order to promote choice, competition, and user-focus. It works through research, reports, conferences, advice and media debate. Since 1999, ASI relegated nearly $50 million to the Ramallah-based NSU despite the fact that NSU staff and employees were sitting in their homes, doing nothing, since the peace process was paralysed.
A British diplomat based in Israel explained why the British government, which pays the lion's share of the NSU budget, and other donors, continued to pay all these millions to the ASI and NSU, despite the international boycott of the Palestinians from March 2006 to June 2007. "We were hoping that negotiations would be resumed anytime." But, the main problem lies with the Palestinian Authority itself and its relations with the NSU, mostly based on cronyism and nepotism. The author sought to contact the NSU in Ramallah, but received a hostile response. One lady told me "why don't you go and negotiate with Israel. Maybe you could do a better job."

Observations from a Palestinian who for some time was associated with the NUS (email dated 11 December 2007):

Regarding ASI, I cannot say that they vetoed Palestinian positions when I was there - that was not the problem. The problem is that ASI is a FOR PROFIT organization that runs the NSU. It received funds from the donors (remember, this is money that is earmarked for the Palestinians) and ASI receives a cut of these funds. When [...] the donors decide that they do not want a certain activity to be carried out, it is not in ASI's interest to go against the dictates of the donors because doing so will mean that its funds (and profits) will be diminished.
[...] When the donors determined that they did not want the NSU to be engaged in public communications activities (owing to pressure from the pro-Israel lobby), it was not in ASI's interest to come to our defence or to demand otherwise. Why? Because coming to our defence would mean the potential for ASI's funds and profits to be diminished if they are seen as going against the will of the donors. ASI feared that the entire project would be cut by the donors if they took a principled stance against the donors.
[...] I did see direct donor interference as regarded the communications work that was done. They also expressed their discontent regarding the work that we did on the Wall (the ICJ ruling).
Again, the problem is that Palestinian national interests are subject to the will of "for profit" organizations. If negotiations are so vital to Palestinian national interests, I am not sure why the PLO allows outside organizations to either (a) control our negotiations or (b) make profit off of our negotiations.

Think tank's water bank rankles

DfID paid ASI "more than £500,000 to provide advice to the Tanzanian government," with over half that amount spent on a video extolling the benefits of water privatisation, The Guardian reported in May 2005. "Our old industries are dry like crops and privatisation brings the rain," was one statement in the video.

"UK ministers have been accused of spending British aid money on a public relations campaign to promote water privatisation in Sierra Leone," reported BBC News in August 2005. Vicky Cann, of the organization World Development Movement, criticized the British Department for International Development (DfID), saying, "In the poorest country of the world, which is still recovering from a decade long bitter civil war, DfID is not only going to pay international consultants to advise on how to privatise water ... but they will also pay for a propaganda campaign to run alongside it to counter public resistance. Is this really the best use of UK aid money – UK tax-payers’ money – that DfID can come up with? As far as we are concerned this is definitely immoral; the legal advice that we have is that it could well be illegal too." The eight firms under consideration for the contract included ASI and PricewaterhouseCoopers.

In May, a similar water privatization scheme in Tanzania that DfID paid Adam Smith International £273,000 to promote collapsed "after the contractor, Biwater, was asked to leave by the government."

Personnel

Staff

• Roger Usher - Managing Director
• Phil Madden - Finance Director
• William Morrison - Director
• David Storer - Director
• Peter Young - International Director
• Amitabh Shrivastava - International Director
• Andrew Ros - Finance Director

Board

• Sir Malcolm Rifkind

Funding

Adam Smith International is funded by its clients and international aid agencies, such as the UK government's Department for International Development.

It is a company registered in the UK: Company Number 02732176

Clients

• Rwanda
• Andhra Pradesh
• Ghana
• Bangladesh
• Iraq
• Afghanistan

Affiliations

Adam Smith International is "a commercial enterprise affiliated to the right-wing free-market think tank, the Adam Smith Institute".

Contact details

Adam Smith International
Westminster Tower
3 Albert Embankment
London SE1 7SP
Telephone: +44 (0) 20 7735 6660
Fax: +44 (0) 20 7793 0090
Email: Mailbox AT AdamSmithInternational.com
Web:http://www.adamsmithinternational.com/