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Flexibility in our international aid policy is key

Giles Watling MP
April 1, 2023

We need a new approach to our political culture in this country. Foreign affairs are a clear example of this. As a nation, we spend too much time on the trivial and personal, like does the Prime Minister have private health care, or domestic issues that the political class think are the core drivers of good local campaigns, such as potholes and building on the greenbelt. We need to think more about what we do in the world and how it impacts us in an increasingly interconnected age. It is for this reason that I successfully stood to become Chairman of the 1922 Backbench Foreign Affairs Policy Committee.

I have always thought that international aid is the duty of rich and powerful nations, as well as a tool to prevent overseas issues spreading and undermining our values. I am proud of the ethic of the Cameron ministry in this regard.

However, taxpayers seeing funds failing to achieve meaningful outcomes, which is currently a serious issue, undermines the very system and risks the long-term viability of international aid. After all, we are a democracy. If voters don’t see the value of what we do, and see examples of horrid waste, they are perfectly entitled to vote for those who are more isolationist.

Currently, we have a system which has been built around aid as a principle. We even legislated for a spending target of 0.7% of GDP as a minimum. This is opposed to a structure which is accountable for reducing poverty and promoting British interests. Government departments, such as the FCDO, and other international actors have for too long seen aid as “easy money” rather than see it as a high responsibility. After all, they know the cash is legally there and has to be spent.

We cannot pretend a “spend it or lose it” mechanism is a shrewd way of conducting international business. It would be wiser to allow underspends to be carried forward as a form of reserves for disaster relief. We could also consider a floating target between 0.4% and 0.8% to better reflect our own changing economic circumstances, how we get changing spending power based on the strength of foreign currencies, and that we do not wish to spend to a target – it must be business case led.

We cannot pretend a “spend it or lose it” mechanism is a shrewd way of conducting international business. Quote

At the moment, tapering us down from 0.7% to 0.5% simply reflected our own economic output and not any of the other vital considerations. Flexibility should be key.

Even the greatest proponents of aid did not have much positive commentary on the Department for International Development’s record for planning and oversight of aid spending.

I have spent a great deal of time considering the concept of bulk passing cash to other large entities to pool and discharge. In principle, this makes sense as it generates economies of scale and helps such a group become adapt and expert. In practice, groups such as the EU, UN, and NATO have an appalling track record of making sure cash gets to the front line (one estimate from an expert witness suggested it was as low as 13p in the pound at one stage).

There is also massive issue with abuse of the aid system in terms of focusing on the wrong priorities. For example, the UN did a report into the UK benefit system, rather than using our money in nations where life expectancy was massively lower than ours. Multilateral organisations have far weaker scrutiny arrangements given they are so large and distant from government.

There are other approaches that have merit. The current approach of Chinese overseas investment is very similar to the approach once taken in areas such as India by the British in days gone by – dispatching robust experts to deliver major infrastructure. This guarantees that projects are very focused, and the presence of a senior responsible person tends to ensure greater respect for the taxpayer. Long term solutions to poverty also help promote the positive role we can play to a local population. However, China is also leaving recipient states in significant debt.

My recent trip to Ghana highlighted this for me – that nation is now looking to the UK once more as a result. But we must be aware, unless we improve aid to promote our values, the Chinese Communist Party will fill this space, not only killing people with debt, but by getting their roots into assets like digital infrastructure. If aid doesn’t address the CCP, then we are missing the point.

We have an opportunity in the fact that the reforms needed are relatively straight forward – moving aid away from bulk cash given to multilateral groups and instead discharge it via focused task and finish groups; however, this requires will and commitment to ending the status quo, and maybe some bruised egos in the FCDO and UN. If we get this right, we will be able to undertake some fine work in the world, and people will rally behind such charitable endeavour.

Giles

Giles Watling is the Conservative MP for Clacton and Chairman of the 1922 Backbench Foreign Affairs Policy Committee.

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