The Conservative Party, the dominant partner in the UK’s ruling coalition government, looks to be divided over the issue of its commitment to increased international development spending. In a letter today leaked to The Times newspaper, Defence Secretary Liam Fox has apparently stated he cannot support a proposal to raise international aid spending levels to 0.7% of GNI. Whilst he has been careful not to challenge the commitment, Liam Fox argues that such a binding legal requirement could lead to challenges as well as impact upon spending in other departments. Apart from the obvious self-interest of Fox’s position – defence spending having been slashed in the recent Comprehensive Spending Review – his concerns are reported to be shared by many senior Conservative politicians on the right of the party.
The decision of the government to embrace the previous administration’s promise to increase aid spending to the 0.7% target was widely seen – even by critics of the government (including me) – as brave. Public opinion, at least as measured in a poll in September 2010, suggested most UK voters (64%) see British poverty as a bigger priority than poverty overseas, and 63% thought aid spending should be cut. Growing public antipathy to overseas aid spending in a time of serious domestic cuts and continued concerns over the economy are not surprising, and the government’s apparent willingness to put aid before public opinion is to be welcomed.
But it does raise the question of why the 0.7% target, and whether, in a time of austerity, when local council services have been drastically reduced as the cuts have begun to take effect, the UK should continue to increase international aid spending.
The 0.7% target was set in 1969 following the Pearson Commission’s report, Partners in Development which recommended official aid should reach 0.7% of GDP by 1975, and the adoption by the United Nations General Assembly in Resolution 2626 of that target in 1970. Gross National Income (GNI) has subsequently been adopted as the basis for calculation in place of GDP (which, in the UK, increases the actual amount of aid).
Critics of the 0.7% target suggest that the calculation that underlay the proposal rests upon a set of untested, and in hindsight incorrect, assumptions; and that whilst governments pledged to move toward the target, none agreed a binding commitment to do so. Whatever the assumptions behind the target (and the critics may have a point that the figure has become totemic, rather than a hard economic analysis of what is required), it remains an important benchmark for the commitment of the developed world to assisting countries and peoples who are living in conditions of poverty and vulnerability.
Only five donors currently meet (and exceed) the 0.7% target: Denmark, Luxembourg, the Netherlands, Norway and Sweden. However, other donors are increasing their spending. Australia, for example, increased spending by 12.1% between 2009 and 2010. Canada’s spending also increased by around 12.7% in this period. British spending, in line with its commitment to raise international aid funding, increased its spending by 19.4%. However, the increases in aid spending have nonetheless failed to meet commitments made in the 2005 Gleneagles G8 Summit. The OECD calculate a $19 billion shortfall, of which only $1 billion can be attributed to falls in GNI as a result of the global economic crisis.
Why is the UK government’s commitment important? In part, because of that shortfall. As a major donor, the message sent by maintaining and increasing aid spending is important – both to other donors and to recipient countries and institutions. There are questions over how effective aid is, and how it can be made more so, but there are only a few on the margins who believe aid has no place in poverty-reduction programmes and support. With many donors scaling back on their commitments, it becomes ever more important for the UK government to live up to its promises, and put pressure on other donors to do the same.
The argument that domestic poverty should be a priority for a UK government, and that international aid should face the same cuts as other spending departments, is a naturally compelling one within Britain. During the boom years under the New Labour government, it was relatively easy to make commitments to increased international aid spending without arousing domestic concerns. It is because that task is politically so much harder during periods of economic contraction that a legally-binding target becomes so much more important (the same argument could be, and is being, made for legally-binding emissions reduction targets). The global financial crisis, coupled with (and linked to) spikes in food prices, fuel prices, rises in unemployment, contraction in growth, has impacted severely on sub-Saharan Africa, and on the poorest in all societies. Cutting back on aid spending would not only threaten to derail the (already mixed) progress towards the Millennium Development Goals yet further), but push millions more into conditions of poverty.
Dr Liam Fox is wrong. The 0.7% target is a worthy one. It is right that the government maintain its course, especially now. Aid can and should be reformed to ensure better returns and results. It should be made more efficient where possible. It should be delivered in innovative ways and for innovative programmes. But cutting spending for the world’s most vulnerable people is not an acceptable policy option.