Fighting for Foreign Aid

By former WCIA volunteer, Geena Whiteman 

 

 

The UK is one of the worlds biggest foreign aid donors, having the third largest aid budget in the world and being one of only a few countries consistently achieving the UN’s target of spending 0.7% of the annual budget (the countries gross national income) on foreign aid.

However, with the recent election of Boris Johnson as Prime Minister of the UK, the UK’s position as a ‘development superpower’ is at great risk. In the running of, and since the announcement of his election, there have been numerous whispers and rumours about the ways in which the UK’s foreign aid spending will be reformed.

Currently, approximately 70% of the UK’s £14 billion a year (0.7% of national income) foreign aid budget is spent by the Department for International Development (DfID), with the rest spent by various other departments, most prominently, the Department for International Trade (DIT) and the Foreign Office. On the 22nd July 2019, the now former Secretary of State for International Trade Liam Fox stated that the DIT will use increasing amounts of the aid budget to “help promote investment in developing countries and promote British interests”.

So, what comes of the countries who are in dire need of foreign aid, but can’t offer as desirable a return on investment as British interests would seek? What becomes of foreign aid to low-income countries such as Nepal, Tajikistan and Rwanda, who are both land-locked and resource scarce?

 

Nepal is an excellent example of the threat that shifting foreign aid to be more trade-focused rather than poverty focused poses.

 

 

Out of the 33 active projects funded by the UK aid budget in Nepal, only one of them has the Department of Trade (BEIS) funding it – and the project has one of the smallest budgets out of all aid-funded projects in Nepal.

 

For a country with little now to offer us, what hope is there for UK aid to Nepal once the new aid reforms come in, especially considering our history of scarcely rewarding the Nepalese Ghurkha for all their loyalty and support in our armed forces. Following the proposed reforms of the Department of Trade controlling even more of the aid budget, how hard will Nepal now have to fight for aid when we’ve taken all the resources we could get?

 

Historically, the UK’s commitment to aid has been justified on two grounds – from a moral perspective, demonstrating the UK’s commitment to help alleviate world poverty, and from a policy perspective, helping support the achievement of development milestones such as the SDG’s. However, numerous charities and agencies have warned that aid is no longer as effective and efficient as before, and taxpayers are no longer getting maximum value for money.

In a letter to the then Chancellor, Phillip Hammond, 23 agencies suggested that aid spending is now diverted from the worlds poor in order to promote commercial and political interests, or as the Prime Minister calls it, British interests. With the UK’s legal obligation to commit 0.7% of GDP on aid, many of those working in the humanitarian sector have raised concerns that ministers are using aid as a form of bribery, by classing politically convenient projects as aid, and ensuring the strings attached lead to increased cooperation with British industry.

 

The ONE Campaigns UK Real Aid Index has shown that DfID’s expenditure of the aid budget was rated highly for its focus on poverty, its effectiveness and its transparency, but the same couldn’t be said for other departments, such as the Foreign Office and the Department of Trade.

 

Of the aid spent outside of DfID, over 1/3 is spent in upper middle-income countries, who have very little need for UK aid.

 

For context, examples of upper middle-income countries are China, Azerbaijan and Russia, who all appear to be thriving off their own industries. A key example of this diversion would be the concerns raised by a committee of MPs over aid delivered under the Prosperity Fund, managed by the Foreign Office. Projects supported by this fund include extensive investment to China, including projects development the film industry and improving museum infrastructure.

 

Considering that the Prosperity Fund “aims to remove the barriers to economic growth and promote the economic reform and development needed to reduce poverty in partner countries”, its an interesting to choice to invest in the film industry in a upper-middle income country rather than invest in projects working with youth, health, education and disaster management in low-income countries.

 

In a time in which the Conservative government austerity measures, essential government departments and public services must fight furiously against budget cuts, the commitment of 0.7% of national income may be infuriating to them.

 

Do I think that we should maintain our 0.7% commitment, in a time where the NHS and the state education system are fighting for every penny? Absolutely. However, should we commit money to a foreign aid budget that serves those most in need, rather than for countries which would “serve the political and commercial interests of the UK”? Absolutely.

 

The foreign aid budget needs reform, but as one of the strongest economies in the world with a bloody history of exploiting and colonising others, we need to own up to that past and make reparations through investing in projects which offer long-term sustainability, rather than serving political interests or offering short-term solutions to ongoing issues. With the UK already facing a turbulent time ahead with a no-deal Brexit on the cards, losing its status as a ‘world leader’ in development aid threatens to weaken the UK’s standing and power on global issues.

 

Inarguably, we need to reform the way we do aid. Aid-scepticism is rising, and before long, we’ll be fighting about sending across 10p to a humanitarian crisis because of a distrust in where it will end up. On leaving his role as Foreign Secretary, the now Prime Minister told the Financial Times that if ‘Global Britain’ wants to achieve its full potential, then DfID must be brought back in-house to the Foreign Office, rather than operating independently.

The proposed expansion of the definition of aid from poverty reduction to include the “nations overall strategic goals” runs the risk of perpetuating the existing idea that the aid budget is used to bribe countries to be our friend. Under our current government with a Brexiteer leader and cabinet, the expansion of aid and in-housing of the budget could mean a total reduction in aid effectiveness and transparency, and an even further decline in it reaching those who need it the most.

 

If we want to maintain our position as a development superpower, we need to seriously reconsider the reforms currently being delivered by our government. If we’re not investing our ODA in bottoms-up approaches to poverty reduction, we aren’t using the taxpayer’s money in the most effective or impactful ways.

 

Views expressed in this blog are those of the writer and not WCIA  

 

 

 

Bibliography

• Full Fact, 2018. UK Spending on Foreign Aid. [Online]
  Available at: https://fullfact.org/economy/uk-spending-foreign-aid/
  [Accessed 30 07 2019].
• Hutton, J., 2018. £14 Billion and Counting: What’s the Problem with Britain’s Burgeoning Foreign Aid Budget?. Taxpayers Alliance, 22 12.
• Islam, F., 2019. Aid Budget To Be Used by International Trade Department. BBC News, 22 07.
• Mance, H., 2018. UK Seeks Reforms on Overseas Aid Spending. The Financial Times, 9 10.
• Morris, C., 2017. Reality Check: How Much Does The UK Spend on Overseas Aid?. BBC News, 20 04.
• Savage, M., 2019. UK Aid Budget ‘Goes to the Wrong Projects’, Leaked Letter Warns. The Observer, 23 02.
• Wilkinson, P., 2019. Reports Criticise UK’s £14 Billion Foreign-Aid Spending. Church Times, 28 06.
• Wintour, P., 2019. Boris Johnson Backs Call for Multibillion Cut to UK Aid Budget. The Guardian, 11 02.