Sunday, 12 December 2010

Why David Cameron Increased The Aid Budget

One of the great shocks of the recent British spending review was that while the defence budget was being significantly reduced,the foreign aid budget was increased by a similar amout the following day.

Many people have wondered why that was.

This is a very brief explanation.

The aid budget is being increased to 0.7% of Gross National Income.

The figure of 0.7% dates back many years.

It was first used in 1969 by the Pearson Commission's Partners In Development report.

It was adopted in a resolution by the United Nations General Assembly in 1970:

"In recognition of the special importance of the role which can be fulfilled only by official development assistance,a major part of financial resource transfers to the developing countries should be provided in the form of official development assistance.

Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade."

This figure of 0.7% of Gross National income dates back to 1969.

The World has changed since then,once poor countries such as China are now economic power houses.

Hasn't the requirement changed over the last 40 years?

That report contained the following assessment of the aid required to meet the Millennium Development Goals:

"Projected official development assistance is high in absolute terms,but since rich countries’ 
income will grow over the 10 years,the cost of meeting the Goals in all countries with adequate governance corresponds to 0.44 percent of OECD countries’ GNI in 2006 and 0.54 percent in 2015 (compared with 0.23 in 2002 and 0.25 percent in 2003)—well below the 0.7 percent target that rich countries have committed themselves to."

In 2,000,the United Nations adopted the Millenium Declaration.

This then led to the Monterrey conference.

British Prime Minister Tony Blair attended the Monterrey conference where nations agreed to the "Monterrey Consensus".

The following is an extract from the United Nations Report of the International Conference on Financing for Development held in Monterrey,Mexico,18-22 March 2002:

"We recognize that a substantial increase in ODA (Official Development Assistance) and other resources will be required if developing countries are to achieve the internationally agreed development goals and objectives,including those contained in the Millennium Declaration.

To build support for ODA,we will cooperate to further improve policies and development strategies, both nationally and internationally,to enhance aid effectiveness.

In that context,we urge developed countries that have not done so to make concrete efforts towards the target of 0.7 per cent of gross national product (GNP) as ODA to developing countries and 0.15 to 0.20 per cent of GNP of developed10 countries to least developed countries,as reconfirmed at the Third United Nations Conference on Least Developed Countries,and we encourage developing countries to build on progress achieved in ensuring that ODA is used effectively to help achieve development goals and targets.

We acknowledge the efforts of all donors,commend those donors whose ODA contributions exceed,reach or are increasing towards the targets,and underline the importance of undertaking to examine the means and time frames for achieving the targets and goals."

"We believe that reforms of the Security Council should meet the following principles:

(a) They should, in honouring Article 23 of the Charter of the United
Nations,increase the involvement in decision-making of those
who contribute most to the United Nations financially,militarily
and diplomatically - specifically in terms of contributions to
United Nations assessed budgets,participation in mandated peace
operations,contributions to voluntary activities of the United
Nations in the areas of security and development,and diplomatic
activities in support of United Nations objectives and mandates.

Among developed countries,achieving or making substantial
progress towards the internationally agreed level of 0.7 per cent of
GNP for ODA should be considered an important criterion of contribution;" 

This clearly implies that international influence is bought with taxpayer's money.

British Prime Minister Tony Blair was a major supporter of international development.

He formed the "Commission For Africa" which in March 2005 produced the report "Our Common Interest" which made this recommendation:

"Recommendation:Donor countries should commit immediately to their fair share of the additional US$25 billion per annum necessary for Africa.

Ways of financing the doubling of aid to Africa should include the immediate launch
of the International Finance Facility. 

Rich countries should aim to spend 0.7 per cent of their annual income on aid,with plans specified for meeting this target.

Further work should be undertaken to develop workable proposals for specific international levies to raise additional finance (for example from compulsory or voluntary charges on airline tickets)"

The following is an extract from the Council Of The European Union's External Relations Council report "Council conclusions:Accelerating progress towards achieving the Millenium development goals." dated Brussels 24th of May 2005:

"Increased ODA is urgently needed to achieve the MDGs (Millenium Development Goals).

In the context of reaching the existing commitment to attain the internationally agreed ODA target of 0,7 % ODA/GNI, the EU notes with satisfaction that its Member States are on track to achieve the 0.39% target in 2006 for ODA volumes contained in the Barcelona commitments.

At present,four out of the five countries,which exceed the UN target for ODA of 0.7%,of GNI are member states of the European Union.

Five others have committed to a timetable to reach this target.

While reaffirming its determination to reach these targets,the EU agrees to a new collective EU target of 0,56 % ODA/GNI by 2010,that would result in additional annual € 20bn ODA by that time.

i. Member States, which have not yet reached a level of 0,51 % ODA/GNI,undertake to reach, within their respective budget allocation processes,that level by 2010,while those that are already above that level undertake to sustain their efforts;

ii. Member States,which have joined the EU after 2002,and that have not reached a level of 0,17 % ODA/GNI, will strive to increase their ODA to reach,within their respective budget allocation processes,that level by 2010,while those that are already above that level undertake to sustain their efforts;

iii. Member States undertake to achieve the 0.7% ODA/ GNI target by 2015 whilst those which have achieved that target commit themselves to remain above that target;Member States which joined the EU after 2002 will strive to increase by 2015 their ODA/GNI to 0.33%."

The following is an extract from the Council of the European Union document "Council conclusions on the Millennium Development Goals for the United Nations High-Level Plenary meeting in New York and beyond"  from the 3023rd FOREIGN AFFAIRS Council meeting in Luxembourg,14 June 2010:

"ODA is an indispensable element of a meaningful global development partnership.

The EU accounts for more than a half of global ODA and reaffirms its commitment to increasing its aid spending to reach 0.7% of GNI by 2015 – The EU calls on all other international donors,including new and emerging partners – to raise their level of ambition and to increase their ODA efforts to a level similar to the EU, thus contributing their fair share to the global development efforts. 

The EU expresses satisfaction that despite the economic and financial crisis,many Member 

States have managed to maintain or raise their ODA spending.

However,the Council acknowledges that the EU will not reach the collective EU intermediate target of 0.56% ODA/GNI by 2010.

It therefore urges the Member States, particularly those clearly behind 
schedule, to deploy necessary efforts in order to meet 2015 ODA commitments as set out by 
the May 2005 GAERC.  

In this regard, the Council asks Member States to take realistic,verifiable actions for meeting 
individual ODA commitments until 2015.

Underlining that this issue falls within the 
competence of Member States,the Council invites Member States to share information on 

these actions and, within their respective budget allocation processes,on their planned ODA 

spending for the next budgetary year as well as their intentions for the remaining period until 


The Council will examine a report in the framework of the Monterrey process and will 
assess progress annually."

"The Chancellor has announced the UK's Spending Review and has outlined how the government will meet its promise to spend 0.7% of Gross National Income on aid from 2013, helping the billion people in the world who live in extreme poverty.

Over the course of the Spending Review period,DFID will increase resource spending by 35% in real terms,and increase capital spending by 20% in real terms.

The department’s administration budget will be reduced by 33%.

Meeting the 0.7% pledge on Official Development Assistance (ODA) is in line with the UK’s international commitments to help those living in extreme poverty in our world.

The Spending Review sets out how the ODA budget will increase every year between now and 2014,to deliver an ODA/GNI ratio of 0.56% in 2011 and 2012 rising to 0.7% in 2013 and 2014."

This last line is similar to a Manifesto pledge from the 2005 General Election - from the Labour Party Manifesto:

"We are proud to have established a Department for International Development,with
a clear mission to reduce poverty.

Now, for the first time ever the UK has a clear timetable – 2013 – for achieving the UN target of 0.7 percent of national income devoted to development."

The decision to increase the foreign aid budget has striking similarities with the decisions taken as part of the British Strategic Defence and Security Review.
In both cases David Cameron's government was not acting in the best interests of the people who elected it.

David Cameron's government was simply doing what it had been told to do by unelected supranational organisations - the European Union and the United Nations.

In both cases David Cameron,who reportedly once said “I am the heir to Blair,was also applying the policies of his predecessor Tony Blair.

The British people generally believe that they elect the government which rules over them.

This is no longer the case.

At the United Nations,a small dictatorship can have as much influence as a large democracy.

There,poor nations decide that the rich nations should share their wealth with them.

The United Nations makes it clear to the rich nations that influence is bought with aid.

The European Union then decides to increase it's spending on aid.

The British government,which is subordinate to the European Union,is forced to spend more on aid.

The British taxpayers will have to work to pay for that aid.

However,they have no say in the matter.

Their right to govern themselves was given away by their politicians.

They will work to pay taxes to pay for aid because the governments of poorer countries told them to.

They will do as they are told.

They have no choice.


steve said...

I am to busy to comment but it isn't the idea of aid that annoys the people. It is the waste, "empire guilt", and oddly the perceived erosion of British culture (what the tabloids call islamophobia.)

As for international treaties any 3rd year IR student and above will tell you international treaties ain't worth the paper they are written on.

steve said...

It is also worth noting that the cost of CVF equates to approximately .43% of GDP

GrandLogistics said...

Hello steve,

the subversion of the democratic process is more the issue here rather than the aid.

However,aid doesn't have a very good record.
Those countries which have improved the lot of their people most have done so through trade.
Trade will always dwarf aid.

Those countries which have received large amounts of aid have developed more slowly.

While trade trickles money down through the workers in any society,aid often benefits corrupt officials.

Trade links a consumer in one country to a worker in another.

State aid allows politicians in one country to influence politicians in another country.

Poorer nations would benefit far more from the elimination of Europe's protectionist agriculture policies than from aid.

But Europe increases it's aid while restricting access to it's markets.

This approach is advantageous only to politicians.


steve said...

Hello T6!

I was in a hurry with my comments so just bashed out some stuff.

I agree with your comments. Until this time last year I was doing dual honours in IR (specialising in security) and History (specialising in imperialism) and aid is such loaded issue for me that it would take me about 5000 or so words just to give you a rough idea of what I thought about it.

Um. Just thought.If it wasn't for the economic situation and dad's cancer I probably would be writing 5000 or so words on aid. Oh well!!!