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Overseas Development Aid shock: Government sticks to historical commitment!

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If International Development spending figures were of interest to headline writers, they'd have a genuine shock to report: Government Sticks to Historical Commitment. The UK's ODA, which was 0.52% of GNI in 2009, is forecast to stay constant at 0.56% (lower than previously budgeted), but will then jump - at the last minute, but permanently - to the magic figure of 0.7% in the second half of 2013.

Following the publication of the Brandt Report in 1980, OECD countries committed to spending 0.7% of their Gross National Income (GNI) on Official Development Assistance (ODA). This was supposed to be immediate, but instead became an aspirational yardstick. As well as comparing donors with each other, it became possible to assess the progress of a nation's aid towards a normative target. International Development campaigners and lobbyists have made much of the 0.7% GNI figure in recent years (perhaps failing to notice that former German Chancellor Brandt had recommended that it should be pushed up to 1% in 2000 - something only Sweden, Norway and Luxembourg achieved in 2009).

In the UK, all three main parties put a deadline on their commitment to reach 0.7% of GNI in their 2005 general election manifestoes - Labour and the Conservatives by 2013, the Liberal Democrats by 2011. In the run-up to the 2010 general election, the Conservatives then surprised many by announcing that the Department for International Development (DFID) would, alongside the NHS, be "ring-fenced" against cuts. Indeed the commitment to increasing ODA to 0.7% of GNI by 2013 would be retained.

So striking is this commitment to increase aid that when the CSR seeks to advertise positive aspects of its 'choices and priorities' ODA's rise is one of just three highlights listed, alongside increased spending on health and pensions.

But there is an important catch. The DFID budget and the total spent on ODA are not the same thing. Indeed there is the potential for them to be very different indeed. The list of items defined by the Development Assistance Committee of the OECD as ODA is very long and includes many things that anti-poverty campaigners would not recognise as developmental. Most importantly, security services provided in poor countries can legitimately be included in the UK's 0.7% figure, even if the spending comes from the Ministry of Defence (MoD). And sure enough the CSR, in line with Tuesday's Strategic Defence and Security Review explicitly calls for International Development programmes that contribute to 'national security goals.'

It is therefore conceivable that the UK could raise its ODA to 0.7% of GNI while actually reducing DFID's expenditure on poverty reduction. There are two issues here. In historical terms, DFID is a very young department, only created in 1997. Before that, the Overseas Development Administration was a subsidiary of the Foreign and Commonwealth Office, with not only a much lower budget but no direct control over it. The decision to create an independent department overseen by a cabinet minister was a bold statement of the new priority given to Development - that no other country has replicated. DFID under Clare Short was also the world's first bilateral donor to stop aid from being tied to the interests of UK business, focusing instead purely on reducing poverty.

Before the 2010 election, there were therefore concerns that DFID might once again be subsumed. Institutionally, those fears have proved unfounded. DFID is here to stay - and its spending will increase. Its combined capital, programme and administration budgets will rise from £7.8 billion in 2010/11 to £11.5 billion in 2014/15 - by far the largest percentage increase in Whitehall. Indeed it is one of only four departments to see increased spending at all, though - like other departments - it will still see a swingeing 33% cut in staff.

Thus DFID will remain in charge of the great majority of ODA. However, it will no longer be so independent in setting priorities. The CSR announces that the proportion of UK aid spent in 'fragile and conflict affected states' will leap from 20 to 30 percent. From a developmental point of view, addressing conflict would indeed be a crucial first step in reducing poverty in, say, the Democratic Republic of Congo - so there is useful scope for better collaboration between DFID and the MoD. The CSR, though, points in a different direction, bringing DFID into line with the MoD's priorities, rather than the other way round. The rise in anti-conflict spending will be targeted particularly at Afghanistan and Pakistan, 'to support both poverty reduction and Britain's national security.'

So the good news is that International Development spending has indeed been ring-fenced, the commitment to increase it by 2013 has been retained, and the majority of it will come out of DFID's budget. The bad news is that DFID will have to deliver aid with fewer staff and spend much more of its own money on security, possibly at the expense of maintaining its historical focus on poverty in peaceful nations like Malawi or Bangladesh.

Please note: Views expressed are those of the author.


David Matthews-Hall is senior lecturer in International Development at Leeds University. He specialises in the political economy of development in India and South Asia and is author of Peasants, famine and the state in Colonial Western India (Palgrave Macmillan, 2005). d.n.j.hall-matthews@leeds.ac.uk



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