Author – Oliver Wootton
The latest news coming from the Conservative party is that our ‘Global Aid’ budget will remain at 0.7% of National Income. That is of course, as long as the Conservatives regain power following the election on the 8th June. I will try and answer some of the common questions associated with this area – Is it enough, and where does it go?
Where the Figure comes from explained…
Currently we spend 0.7% of UK income on Aid, that equates to 70p out of every £100. The 0.7% figure comes from the UN (United Nations) back in 1970! It was only achieved by our government in 2013 and was made part of UK law in 2015 as part of the International Development (Official Development Assistance Target) Act. Despite being made in law it can’t be enforced through UK courts, the only power it has is to hold the ‘International Development Secretary’ to account if we don’t meet our target. Unfortunately, with UN passed regulations it is nearly always advisory, there is little in the way of ‘effective’ enforcement. That being said a threshold of 0.7% is the highest we’ve seen so far in foreign aid. In 2015 our economic budget for aid equated to a total spend of £12.1bn. Theresa May PM is hoping that our economy will improve following a report from the Office of Budget Responsibility (23rd Nov 2016 – Economic and Fiscal outlook), by 2021 they have forecast our total spend will equate to £14.4bn.
Where does that 0.7% go…
It is split into two categories –
Multilateral, This accounts for the UK giving the money to the UN for them to distribute on our behalf. Currently that stands at 37% of the total budget, it must be said the UN pursue there own equally worthy causes that includes humanitarian aid. Ultimately, It is up to the UN to decide where that pot of money is spent, however, we are a member and as such do get a vote.
Bilateral, This is money is given to ‘programs’ in specific countries, the biggest five recipients being Pakistan, Ethiopia, Afghanistan, Nigeria and Syria. This type of funding accounts for the remaining 63% of the foreign aid budget. Our spending overseas accounts for Bilateral aid when it falls into these regulations:
– It must go towards a specific list of countries that are deemed to have a low or middle income, or, a global institution, such as the World Bank.
– Where it is spent primarily to enhance economic development and welfare.
– Or, a loan or grant given to a country that gives them a much lower rate than whats deemed ‘standard’ by the current market.
Let me give you a better idea as to what this means in real terms… Only about 16% of Bilateral spending goes to ‘Humanitarian or crisis relief’, that being said it is the highest percentage. The UK contributes 13% to ‘Health’, 12% to Infrastructure & Services and varying lesser amounts to governments and Civil societies.
Who decides where it goes, and is it too much or too little?
The ‘Department for International Development’ is responsible for a large chunk of the spending, 81% to be exact. The other 19% is spent by government departments or organisations. Theresa May PM has stated recently that she hopes to review where the money is going, to ensure better ‘use’ of the money as opposed to increasing its budget.
The argument here predominantly comes from the view that we ourselves are in debt and equally have social care needs to upkeep, that £12bn would go a long way to solving all the problems faced with the NHS. Why should we spend all this money abroad when we are in need domestically.
It is said that the UK wastes an awful lot of food, one report suggest the total cost of food thrown away equates to, as stated by ‘FullFact’ “a bit less per household than one estimate for the food we throw away”, (Feb 2017 – UK Spending on Foreign Aid (FullFact)). Some ‘food for thought’ there (Excuse the Pun).
So it is entirely dependent on your point of view, we need the money, they need the money, but we have a choice to reduce our own excesses, they perhaps do not have that option.
How do we compare to other countries?
We currently rank 6th in the tables at 0.7%, with Sweden putting everyone to shame with a 1.4% based on Gross National Income. The other countries with greater input into foreign aid are Norway, Luxembourg, Denmark and Netherlands. This must be taken with a ‘pinch of salt’ as it were, this is highly dependent upon the size of the economy. For example 0.7% for the UK in 2015 was £12bn, 0.7% of America’s Gross Income will likely be an awful lot more, that is why they fall lower at approximately 0.3% but still in real terms contribute a reasonable amount to foreign aid.
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