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The UK: Foreign Aid and Political Pressures

I have recently seen an increase in coverage in both the U.S. and the UK about the provision of aid to foreign countries (commonly referred to as Overseas Development Assistance, or ODA).  Many countries are facing the question of how much assistance to provide to other countries in need when they are struggling domestically.  I would like to take a closer look at the UK government’s position on the issue, what they are doing, and the legislative framework under which they must operate.

The UK has been relatively generous with regards to foreign aid.  In 2010 it provided almost £8.3 billion (approximately US$13 billion) in foreign aid, 0.56 percent of its gross national income (GNI).  The government announced that, by 2013, it aims to provide 0.7 percent of its GNI for development assistance, a dramatic rise from the 0.36 percent that was provided in 2007–2008.  In terms of foreign aid, 0.7 percent is truly the magic number as it is the target amount of ODA per GNI that many prosperous members of the United Nations pledged to give back in 1970.

Now, while it may be great to strive to meet these goals, and a large part of the UK government system is all about meeting targets, this issue is something of a political minefield.  Increasing funding towards the ODA/GNI target has been criticized by some Members of Parliament and the public because it has occurred as budgets have been drastically cut for other departments across the UK.  Should ODA be increased at a time of financial uncertainty and steep budget cuts at home?  Despite these criticisms, the government has remained committed to meeting its targets and maintains that it has both a moral imperative and a national interest at stake to help lift developing countries out of poverty.  It has specifically stated:

On aid spending our commitment is clear – we won’t balance the  budget on the back of the world’s poorest people. Confirming our commitment on aid is both morally right and in our national interest.

Many question exactly how the UK’s national interest is served in providing ODA.  In a 2011 technical analysis of bilateral aid the Department for International Development (DFID) determined “that poverty and fragile states created fertile conditions for conflict and the emergence of new security threats including international crime and terrorism” and “committed itself to pay greater attention to regional conflict and insecurity.”  The aim of the government in pushing such a large percentage of aid in this area is to “help address the causes of conflict, strengthen security and justice, lay the foundations for growth and improve access to basic services.”  It also considers that “the prevention of conflict through development is cheaper than dealing with the aftermath of conflict.”

Given that it is a political hot button, the increase in funding has not occurred in a vacuum.  There have been substantive reviews of how ODA is spent and what the priorities should be to get the best value for money, all of which must occur within the statutory framework provided by the International Development Act 2002.  This Act allows the Secretary of State for International Development to provide development assistance to countries or territories outside the UK if it is likely to contribute to a reduction in poverty, or improve the welfare of the population.  Reducing poverty is the “core power” of the Act and, by law, must be the overall purpose for which any development assistance is provided.  The aim of this purpose is, in part, to “protect aid resources from pressures within government to spend money on aims other than poverty reduction.”

While there is no specific statutory definition, there has been much discussion on what the term “poverty” includes.  The UK does not interpret it as encompassing the condition of poverty alone, but also as including the underlying causes of poverty, such as conflict, economic difficulties, and corruption.  Thus, under the Act, the Secretary of State may provide assistance that is “preparatory to, or will facilitate the provision of, assistance” permitted under the Act, such as commissioning research intended to provide insight into ways to reduce poverty.

This is definitely a tough area, where legislation aims to insulate at least some of the decision making regarding foreign aid from political pressures, but the ultimate decision on how much money to send remains an open, and very political, playing field.

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