How much aid should the UK give?

Earlier today I received my copy of  the Labour Campaign for International Development (LCID) Newsletter. The main message in this newsletter was the amount of aid the UK gives to countries in need.

The readers were invited to contact their Members of Public (MPs) to ensure that they vote the right way this coming Friday 12 September 2014. The right outcome for this group, would be that  the current and any future UK government is obliged by law to give 0.7% of Gross National Income (GNI) on aid.

What is the significance of 0.7% GNI

According to the United Nations, rich countries should commit 0.7% of their Gross National Income (GNI) to aid. But this target has polarised  debates on the merits or otherwise of aid. Given the scope of this post I will not got into these debates in detail.

The LCID is one of those organisations that would like to see donor countries such as the UK meet the United Nations (UN) target because they believe only then can the needs of the poor be met. But not everyone agrees with this views

Quality vs Quantity

Non Government Organisations (NGOs) such as ActionAid have argued that the amount of aid not the problem, but rather the quality of aid that is provided. This is because most of the aid that is provided is not “actual aid” due in part to the way it is structured, aid includes debt relief, technical assistance amongst other things.

Moreover some donors ‘tie’ their aid, which reduces the amount of aid that is available to recipient countries. In practice this means that aid is given on condition that it is used to buy services and goods from the donor country. The effect of this is that the true beneficiaries of such aid are companies and organizations in donor countries.

It is estimated that 45 per cent of aid is tied and within the European Union, NGOs have criticised new member states in particular for tying their aid, who in turn have argued that development aid to third countries is not an easy concept to explain to their citizens and tying aid facilitates that process.

It is for reasons stated above that proponents of aid and lobbyists alike take a keen interest in the amount of aid individual donors give, which has the effect of embarrassing some donors into giving more aid.

 The 0.7%  target is problematic?

Whilst giving evidence to the House of Lords committee on overseas aid, the journalist Michaela Wrong argued that donors turn a blind eye to corruption because they are sometimes in a hurry to get the money out of the door in order to meet the UN target. This has implications for the efficacy of aid as it not only encourages corruption but it feeds it.

That being the case, we need to ask the question, whether the UN target should be enshrined in law here in the UK as the LCID has suggested.

My take

That call for the 0.7% Un target to be enshrined in law misses a point, that is to do with putting a ceiling on how much aid the UK should give. Yet, I don’t believe that it is their intention to limit the amount of aid  UK government gives. The question that arises here is, what would happen if the UK were to find itself in a situation were it was better of and could afford to pay more?

I believe that we has seen this happen with the FairTrade movement where  FairTrade farmers in Ethiopia and Uganda were worse off in terms of wages as a direct result of fixed prices. 

I believe that more effort should be put into examining the future of aid to include the quality of aid, specifically what good aid should be, the sustainability of aid and the link between aid and foreign policy. Further more the debate should take into account the changing environment of international development that has seen the arrival of new donors such as China, India and Brazil and consider the best ways to engage these new donors.

How much aid the UK should give?

Should the UN target be enshrined in law?

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