In a time of economic difficulty and domestic social tension, the overseas development budget is a very easy target. UK citizens can rightly question why their taxes should be used for development in other (and geographically distant) countries, while domestically more public spending is needed to improve social safety nets and welfare in this difficult economic climate. This issue was the topic of a debate in London last week, hosted by the Royal Geographical Society, titled “Britain must cut its overseas aid budget now”. The panel was made up of six speakers, representing different professional perspectives: three of them supported the motion (Ian Birrell, Columnist and former Deputy Editor, Independent; Richard Dowden, Director of the Royal African Society; Stephen Glover, Columnist, Daily Mail and Independent), and three opposed it (Prof. Paul Collier, Professor of Economics, Oxford University; Rt. Hon. Alan Duncan MP, Minister of State for International Development; Richard Miller, Executive Director, ActionAid UK). Each participant had eight minutes to present his argument.
Issues put forward covered the economic, the political, the social and the moral. Professor Paul Collier (author of “The Bottom Billion”) drew on the latter element, proposing that the leadership provided by the UK aid programme worldwide gives UK citizens and tax payers something to be proud of in demoralizing economic times, and that the proficiency of DFID bilateral programmes encourages many young people to work for the organisation. Alan Duncan reinforced the argument, stating that the decision to cut aid is not one that can come from a civilized country that has already made commitments towards people in need.
Ian Birrell, in opposition, argued that giving money to poor countries comes from good intensions but often delivers bad outcomes, and many recipients do not actually want aid money; for example in Haiti aid has increased substantially but is considered to be far from effective. Moreover, development assistance is often used to fund oppressors (as in the case of Rwanda), or other politicians who use the money to win elections. This argument was put forward by Richard Dowden, who criticised the fact that a large portion of aid goes to direct budget support, therefore financing corrupt leaders. He also referred to the huge amount of money flowing out of Africa and reaching off-shore bank accounts, stating that our energies would be far better focused on reversing capital flight than consolidating the aid budget.
Beyond the moral perspective, Alan Duncan and Richard Miller claimed that UK aid is also delivering results. They underlined that aid is the big success story of the twenty-first century, and that when targeted correctly it delivers impressive results (e.g. the CDC, the Commonwealth Development Corporation, is a very effective instrument and unique to the UK). They also argued this point from a macroeconomic perspective, with regards to a correlation between aid and economic growth brought about from IMF activity. The audience heard how the UK is giving increasing attention to governance and results, to further improve efficiency, and focus on the concept of “value for money”. This argument was inadequate for Stephen Glover who spoke of the need for greater aid effectiveness.
In conclusion, it must be recognised that aid represents just a small part of the global picture. It is a small portion of financial flows to poor countries and can bring results if well directed. However, as pointed out in the debate, the impact of policies such as trade reforms, reversing capital flight or improving the visa system have potential to bring about more long-standing improvements for developing nations. Aid must be a complement, with the aim of gradual reductions until the country reaches independence. Somaliland is an example of a region that relied on its own resources to develop. Thus, we should concentrate on outputs and not give aid simply to make us feel better.
Even if the result of the vote was against the motion “Britain must cut its overseas aid budget now”, there is a very real need for tax payers to consider the issue more broadly. In today’s globalised world, UK tax payers cannot afford to ignore the difficulties that other countries face (the current eurozone crisis is a striking example of how interconnected we all are) – and should consider the effect that aid cuts could have on the global development process. But in a time of economic difficulty, a focus on results and aid effectiveness is of particular importance.