Making the Case for Overseas Aid

Last week, Ian Birrell wrote a piece in the Daily Mail supposedly busting the 10 “myths” that he claims are used to justify the UK’s outstanding commitment to help the world’s poorest people.

I profoundly disagree with his analysis – an analysis which will only hurt and harm the people that Britain’s investment in smart aid is helping. Here I argue the alternative case.

‘Myth 1: We can afford to spend a few billion pounds to help the world’s poor’
To pretend that cutting spending on aid is the answer to Britain’s budget problems is woefully misleading. Total government spending in the last financial year was £697 billion. The government made an £850 billion commitment to our banking sector at the height of the financial crisis and we pay £44 billion annually in debt interest. The 0.56% of national income, or £8.7 billion, we currently spend on development assistance and the 0.7% we have promised would not put a significant dent in our deficit even if it were cut completely.

‘Myth 2: We must hit the UN target to give away 0.7 per cent of our GNP in aid’

This was an internationally agreed commitment which was signed and reaffirmed in this very country in 2005 to global acclaim. It is Britain that leads larger developed nations on meeting this target – and the practical benefits are immense. It adds to our wealth. It plays to our strengths. It lends stature to our nation. It significantly increases our influence. It means Britain can be trusted. And it was empirically justified by analyses such as that done by the Commission for Africa. But beyond the empirical and practical, is there not something especially fundamental and dare I say sacrosanct about a promise from one developed nation to the very poorest people in the world?

As the Prime Minister said in a speech last month, “most people in our country want Britain to stand for something in the world, to be something in the world. And when I think about what makes me proud of our country, yes, I think of our incredibly brave service men and women that I have the honour to meet and see so often; and yes, I think of our capabilities as an economic and diplomatic power; but I also think of our sense of duty to help others. That says something about this country.” He’s right.

‘Myth 3: Aid works’
Smart aid in Africa often works extremely well. Charles Kenny’s new book ‘Getting Better’ sees an important role for aid in the hugely positive trends in global development. It helps communities stabilise themselves at the basic level of healthcare, education, infrastructure, and agriculture. This allows for society to sustain a rudimentary but viable standard of living, and creates the conditions for a decent level of economic growth. Charity – in the form of short-term handouts – can keep people alive at times of crisis but without some smart aid, combined with other policies, catalysing longer term economic opportunity and jobs they will usually be unable to lift themselves out of poverty. Smart governmental aid is simply the next step up from a pound in the charity tin – it is the structured charitable will of the people.

Alongside other prerequisites for progress – trade and investment, improved governance, stability -smart aid plays a vital role in promoting development in the poorest countries. In Africa in the past decade 18 non-oil exporting countries grew at an average of 5.5% per year (good, but many would argue that’s still not fast enough). But they could not have done this without debt cancellation and aid. Ghana and Zambia are now classified as lower middle-income countries, a fact that should be celebrated, and the role of foreign assistance has been acknowledged as an important part of the equation.

‘Myth 4: OK, it hasn’t worked in the past, but it will in the future’

We know that in the Cold War era aid was given more to win friends and influence people than to help tackle poverty and save lives. Too much emphasis was put on paternalistic handouts. Back then results weren’t tracked, and aid was often tied to Western companies in ways that significantly reduced its effectiveness. That’s the bad old aid approach we’ve been shaking off ever since and especially since the advent of the Millennium Development Goals.

The UK has been at the forefront of this smart aid revolution that is demanding transparency and results, and is improving efforts to ensure that there is accountability to both taxpayers in rich countries and crucially the poor in developing countries. ONE is campaigning to ensure that all donors publish their aid spending data in an easily comparable format. Aid has improved and so have the results.

‘Myth 5: We will ensure 100 pence of value for every £1 spent on aid’

Value for money is not a principle to be scorned at – taxpayers want it, donors want it and poor people need it. That’s why the British Government has conducted a thorough review of all its spending, rooting out the least effective and asking all its country offices to be clear in what they can deliver in return for taxpayers’ money. A new Independent Commission on Aid Impact will evaluate whether those targets are being met.

A rigorous focus on results is also helping to increase value for money in other parts of the system. Innovative programmes like the Global Alliance for Vaccines and Immunisations (GAVI), which deploys private sector expertise, are closely monitoring what they can achieve with every penny of their budget. Over the next 5 years for example, GAVI will spend $4.3 billion on vaccinating 250 million children and save over 4 million lives as a result. This is just one example – but what a magnificent result.

‘Myth 6: Aid changes the world for the better’

Poverty clearly will not be solved by aid alone, but what smart aid can do is help create the conditions needed for sustainable economic growth. And that means a well-fed, healthy and educated work force. This is happening throughout Africa, which last year according to McKinsey had more discretionary spending than Russia or India. This is the story – backed by statistics – of an ‘Africa Rising’. But clearly there’s still a story in countries like Somalia and Ethiopia of an ‘Africa starving’. That doesn’t mean we should ignore the great progress and only focus on the challenges that remain. The world has changed. This century’s giants will be China, India and Brazil – but an integrated Africa will also be a leader. By supporting this trend through smart aid within a broader strategic development partnership Britain is in pole position to benefit from Africa’s progress.

‘Myth 7: The slew of statistics prove that aid is a success’

It is a very twisted sort of cynicism that dismisses hard factual evidence of development progress as ‘grief-stained’ and a ‘stunt’. These statistics are real, and are worth repeating. The number of deaths of children under the age of five declined from 12.4 million in 1990 to 8.1 million in 2009, which means nearly 12,000 fewer children die each day. Much of that decline has happened in the last five years since campaigns like Make Poverty History called for increased investments in vaccinations and anti-malarial bed nets. Increased funding and intensive control efforts have cut deaths from malaria by 20 per cent worldwide – from nearly 985,000 in 2000 to 781,000 in 2009, with most of the decline concentrated in 12 African countries. New HIV infections have also declined steadily. In 2009, 2.6 million people were newly infected with HIV – a 21 per cent drop since infections peaked in 1997. The number of people receiving antiretroviral therapy has increased 13-fold from 2004 to 2009 with 5 million Africans in need now on life preserving antiretroviral therapy. That is down to effective, innovative and donor-supported mechanisms such as the Global Fund to Fight AIDS, TB and Malaria. From 1990-2008 an estimated 1.1 billion people in urban areas and 723 million people in rural areas gained access to an improved drinking water source. Primary school enrolment in sub-Saharan Africa increased by 18% between 1999 and 2009, the best improvement of any region. It is absurd to argue that aid played no part in making this staggering statistics of progress happen.

‘Myth 8: Britain will no longer tolerate mis-spending of funds’

Badly spent aid is unacceptable and must not be tolerated. But let’s not kid ourselves that corruption can be eradicated overnight, or that inefficiency and human error can be banished in aid any more than it can in other endeavours. What can be done is to make it as difficult as possible for money to go missing, through maximum transparency and severe sentences for those caught stealing or corrupting. Initiatives like citizen report cards can make sure feedback loops operate to improve efficiency. The Independent Commission on Aid Impact will help with this. Its board includes fearless anti-corruption activists, and hard-headed accountants to crunch the numbers and crush the perpetrators. But while problems remain, the majority of aid is now spent effectively – which is why we are seeing such significant results.

‘Myth 9: Aid is in our interest to prevent immigration’

People don’t like to leave their own countries and families. They do so only because they are driven to out of necessity. If a country thrives and gives its people access to jobs and a livelihood the population are much less likely to leave. It is clear that the way to prevent immigration is to help countries develop, grow and thrive. It is unarguable that there are practical and self-interested reasons to support spending on smart and effective aid programmes.

‘Myth 10: Developing nations are desperate to be saved’

Aid alone cannot ‘save’ a country. It pump-primes progress by helping the growth drivers of a national economy – its people – stabilise themselves. Africa is building itself up with a little help from its friends. And it is very good news for our mutual futures that Britain in particular – as it has demonstrated admirably and endlessly in the public, private and political sphere – means what it says and has been a true ally.

Africa’s economies are growing strongly, they are attracting private investment, spawning new technologies and are home to a burgeoning middle-class of consumers and entrepreneurs. This is not the activists speaking. This is the hard boiled analysts of McKinsey and the harder nosed investors now pouring their vast billions of investment money into Africa. For example, Helios announced last month that their £900 million African private equity fund is ready to go. This is a story of ‘Africa Rising’ and it is being told by African citizens like Ngozi Okonjo-Iweala, Ory Okolloh and Rakesh Rajani – not well-meaning Western hand wringers. Yet it is essential to understand the supportive and transitional role that smart aid has played, and will continue to play, in this process.

So the pragmatic view based on solid analysis is that aid supports countries through tough times, helps them build up systems and expertise, and as soon as possible puts itself out of business. In fact, if there’s one thing that both the sceptics and those that support evidence-based spending on aid can agree on, it is that a world without aid is the ultimate goal.

This blog post was originally published on the Huffington Post


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