As part of his spending overview, Chancellor Rishi Sunak has announced a reduction in the UK’s foreign aid budget, which will be reduced from 2021 from 0.7% of gross national income to 0.5%.
The savings of around £ 4 billion will surely be welcome in some circles. The impact of dealing with COVID-19 has led to the collapse of the British economy and Britain facing an economic crisis that is likely to dispel the impact of the 2008/9 banking crisis.
Despite the manifestation of the Conservative Party promising to maintain aid spending at the 0.7% level, there was great pressure on the spending promise. This is not a popular policy, especially not among conservative voters, and the merger of the Department of International Development (DfID) with the Foreign and Commonwealth Office (FCO) probably diminished before the impact of COVID was fully apparent.
Critics of the cuts, however, argue that it is short-sighted and that the UK budget for overseas development aid (ODA) is money that is being spent very well. In fact, Foreign Minister Baroness Sugg announced she intends to resign at the march in protest. So what are the benefits of the UK’s ODA budget – not just for developing countries, but also for Britain as the donor nation, and how can this cut have consequences?
The 0.7% spending target for overseas development aid has been set by the United Nations in the United States Pearson Commission Report, published in 1969. For critics of the spending target, the figure of 0.7% is outdated and arbitrary, and only a very small number of countries reach it annually. The largest aid donor in the world, the United States, donates approximately 0.2% -0.3% of its gross national income annually, but the size of its economy dwarfs all other donors.
For the United Kingdom, this commitment has been made by Tony Blair’s Government and was then incorporated into the law in 2015, with the bill of a private member of the Liberal Democrat being given parliamentary time by the coalition government. For the Blair government and those who followed it – up to and including Theresa May’s administration – the budget for foreign aid was a way to buy influence and friends.
By investing in developing countries, the UK can help develop emerging markets, and through investment, they have been able to reap the financial rewards of close trade ties with developing countries. In addition to developing and accessing new markets, ODA spending has allowed Britain to encourage developing countries to engage with the international community in ways that the UK deems beneficial, whether it be encouraging free trade or democracy. practices were.
Money speaks a language that is commonly understood. Supporters of Britain’s ODA budget suggested that it was a wise investment by UK PLC. They point out that the majority of the money invested “in developing countries” led to this profits for the British Treasury although the diffuse nature of that relationship makes empirical evidence difficult to obtain. The select committee that oversees ODA expenditure is a formidable organization because of its overarching structure and although corruption with ODA expenditure can occur, the oversight of spending is extensive.
For their part, many of the developing countries were former British colonies – much of the British ODA budget is spent in former British colonies and member states of the Commonwealth – and the aid budget enabled the British to establish new, friendly relations with to create countries that do not have the most positive view of trade with the United Kingdom. Any discussion of colonial compensation, such as happened in 2015 when David Cameron visited Jamaica, it could be ignored with such an extensive ODA budget.
As Britain struggles to maintain a position of international power (especially after Brexit if it is no longer part of the EU), a leading role as a defender of the developing world also gives the UK an influential role and a voice in global governance. If you want to reach your weight, you need something to help you land – and in the 21st century, Britain’s role as leading donor for foreign aid was an important factor.
The savings Sunak is expected to earn from this cut are around £ 4bn, but the impact could be huge. As many charities will tell you, sustainability is the key to donation. A one-time donation can do just as much, but repeated donations can accomplish so much more.
The reduction in Britain’s gross national income due to the impact of the pandemic meant that spending on aid would already fall sharply in the next financial year. By further cutting the ODA budget, the government will cut off important development projects. Fewer children in developing countries will go to school, more women will die in childbirth, more people will starve.
Its impact will not simply be felt in the developing countries that ODA has done so much to help. This will be felt in the UK when new markets shrink, when transactions with developing countries shrink, when the treasury receives fewer tax payments.
If Rishi Sunak needs to cut spending – and everyone agrees that money needs to be saved – there are many other places he can start meaningfully. Reducing the ODA budget is short-sighted and potentially damaging – not just for the British conscience, but also for our bank balance.