The Liberal Democrats have a proud tradition of prioritising international development, but it is time to re-think our foreign aid strategy. All three parties’ manifestoes pledged to increase aid spending to 0.7 per cent of Gross National Income (GNI). This sounds very “nice” and positive, but the commitment bears no relation to the actual needs of developing countries and ignores the mounting evidence showing that the current system of aid is perpetuating the poverty it seeks to alleviate. If we are to be serious about helping the world’s poorest, we need to stop focusing upon what we want to give, and look at what has really worked in international development: domestic governments being accountable, and thus responding, to the needs of their populations. Sadly, much of our aid undermines this accountability.
The UK’s aid spending is currently around 0.5 per cent of GNI. Increasing it to 0.7 per cent will cost taxpayers an extra £2bn a year. DfID’s justification is that this morally right and that the generosity showed towards the victims of the Haiti disaster demonstrate a “long and proud tradition of helping people less fortunate than ourselves.”
Putting aside the issue of using input targets to measure outcomes (after all, it makes logical sense to appraise how much money is needed before deciding upon a target), this is a deliberate confusion of two separate issues: disaster-relief aid (humanitarian aid as we saw in Haiti) and bilateral assistance (government-to-government aid). In 2008/09 DfID spent just £449m on humanitarian aid out of a total budget of £5.8bn– just 13 per cent. The overwhelming majority of funds, some £5.1bn was used for government-to-government aid or donated through multilateral agencies, such as the EU Commission’s development programme. The largest single recipient was the Indian state, which received £297m.
DfID claims that this government-to-government aid spending is firmly in Britain’s “national interest”. Andrew Mitchell, Secretary of State for International Development, has recently announced that Pakistan is to become the largest single recipient by 2013. While it can be argued that that this makes geopolitical sense, it certainly blunts the moral imperative.
The reality is that government-to government aid has done very little to promote development over the last half century. Proponents of increasing foreign aid are quick to cite successful projects, where people have benefited from aid services, but these remain localised examples, not evidence of development. If they were, there would be no need for the aid to continue, let alone increase.
Partly, this is a fault of the aid system itself. Rather like serendipitous discoveries of high value natural resources, aid removes the accountability of politicians to their fiscal systems, allowing them to shirk their domestic responsibilities. Governments committed to improving domestic business conditions (Mauritius, Botswana, South Korea, Chile), which allow their people to trade their way out of poverty, have done so unilaterally, in recognition of the benefits–both fiscal and humanitarian–that ensue. Government-to-government aid flows reduce the incentive for recipient politicians to do this, by offering an alternative source of funding.
It’s hardly surprising that this policy is becoming increasingly unpopular with the British public: A recent Chatham House report showed 41 per cent of those polled felt that “much development assistance is wasted and does little or nothing to promote British interests; it should be radically reduced.”
The Liberal Democrats should distance themselves from the aid ring-fence. Aid is not a silver bullet to the developing world’s problems, and is now commonly criticised by African experts such as Dambisa Moyo and Andrew Mwenda. At its best it’s a short term fix for disaster relief, at worst it serves to perpetuate long-term cycles of poverty in the developing world. Far better to be seen to backtrack in the interests of the world’s poorest than to be complicit in a rotten piece of feel-good policy.
Timothy Cox is a Liberal Democrat reading a Masters in African Politics at SOAS, having previously worked for Norman Lamb. He also blogs at Liberal Vision.