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Development aid and Britain

The UK's influence is financial and symbolic

The impact of Brexit on the internationalist agenda and international development remains to be seen.

The 28 member states of the EU constitute the world’s biggest donor group, providing over half of international aid. European institutions deliver aid under the EU’s neighbourhood policy to countries such as Turkey and Morocco (the largest recipients), as well as to India and Brazil, where the UK has a limited and diminishing aid presence. The EU is also the largest single source of humanitarian aid for Syria, providing support to groups in Syria and the neighboring states.

The UK’s pro-active, largely progressive, agenda-setting role in development co-operation has been an EU centrepiece for over two decades. The UK channels around 10% of its total aid budget through the EU, but research shows that each £1 of aid the UK spends through EU institutions is matched by £6 from other EU member states. This gives British development aid particular leverage. The creation of the Department for International Development (DfID) under Tony Blair, in the mid-1990s, significantly shaped international policy for the better. It played a key role in the Millennium Development Goals and the pro-poor focus of aid. Despite changes of Government, DfID has established itself as a leader.

The tabloids have put the UK's overseas-aid budget under pressure
The tabloids have put the UK’s overseas-aid budget under pressure

Scale is part of this leadership. The fact that its budget has been growing at a time when most OECD aid budgets have been contracting, has given it added weight. The UK is now the fourth largest donor globally and the third in terms of percentage of aid by GNP, exceeded only by Norway and Sweden. It is a massive and trend-setting presence within the aid community.

In his resignation speech, David Cameron listed the things he felt were put under threat due to Brexit. Amongst them he cited the achievement of the last Government to legislate for 0.7% of British GNP to go to Overseas Development Assistance (ODA), compared with the EU average .4%. The potential unravelling of this legislation, which he signalled, is a concern. A more isolated, insular UK is one which may put its own interests first.

Legislating for 0.7% of GNP going to ODA has already been challenged within the UK, on the grounds that poverty at home is more important. If a more right-wing government emerges it may yield under pressure of an ascetic recessionary agenda, as well as of ideology. Depreciation of Sterling has already led to a drop of 10% in the value of UK aid globally – or £1 billion lost from current spending. This depreciation will prompt tough choices around the world.

Serious questions are emerging for development and humanitarian organisations across Europe that are in receipt of EU funds. Brexit implies a massive restructuring of the entire EU Aid programme. The UK currently contributes €1.2 billion to the European Commission’s aid programme. Take that out and everyone, not just UK NGOs, is affected.

Humanitarian organisations, which receive a large portion of their funds from ECHO, the EU’s humanitarian body, are particularly vulnerable. There is a further sad irony since, even in the short-term, Brexit will greatly complicate the multilateral effort to stem the migration from conflict-ridden countries, the very migration that clearly influenced the Leave vote. Critical funds will end up stuck amid uncertainty over funding cuts.

In the longer term, a possible shrinking role for the UK in defining the EU’s development co-operation priorities is equally worrying. The UK is disproportinately influential in setting the priorities of the European Union aid programme, EuropeAid. It has had a key role in shaping the Sustainable Development Goals. The work on incorporating these into EU aid programmes is only now beginning.

In the coming years, the UK will be absent from key discussions about the future of the EU’s Development Consensus, the Cotonou Agreement and other key processes. The withdrawal of the UK from EU common positions at the UN too will lead to a weaker EU and UK influence. It allows other forces which may not share such an internationalist vision to become more prominent.

The UK has been no angel when it comes to development co-operation. Certain pro-private-sector, public-private-partnership approaches which DfID has recently been promoting caused consternation within the NGO community. However, overall, the work of DfID has had a net positive contribution to the development sector. The UK’s leadership on providing public development finance has been critical in making the promises of the Sustainable Development Goals more than hot air.

The direct and indirect effects of Brexit are bigger than anyone has realised.

Lorna Gold is Head of Policy and Advocacy with Trócaire