Foreign Aid Debate

by Developed Africa 14. February 2014 09:00

There has been a lot of discussion around British foreign aid of late due to the flooding that is hitting the country.

This rhetoric comes due to many people demanding that the money Britain spends on foreign aid should in fact be used to help those in need of it following the damage caused to their homes. The argument has come to the fore in the media due to claims from UKIP leader Nigel Farage, and a petition on the Daily Mail website. This is what Nigel Farage had to say:

My message is: 'Please government, for once put the people first. It would take a tiddly per cent of the overseas aid budget to say to people, however horrible this is, you won't suffer financially."

However, the argument is a lot more complicated than this simplification of moving money immediately from the aid budget to helping those affected by the flood. It is true that the UK government's policy on foreign aid should be revised, especially in terms of the sum, but it is far more complicated than just diverting the money from one area to another.

In terms of the aid budget, as Developed Africa has previously posted, the goal of a 0.7% minimum aid budget from the government is due to misjudging an aid paradigm set out by the Pearson Commission. What it actually hoped would happen, and what needs to happen, is that gradually the government aid would drop to 0.3%, with the other 0.4% coming from private sector investment in developing countries. Empowering developing countries to grow depends on private sector investment from developed economies and it has been argued that the size of aid as a proportion of the amount of money going into these countries can have the effect of crowding out private sector investment which may be able to be more effective and more sustainable. For these reasons, Developed Africa is of the view that the British government's foreign aid target of 0.7% of GDP is not in the interest of the countries most in need of help. Therefore the foreign aid system Britain currently has is in fact too large, but not in the sense that we should be helping ourselves before we help other people, but because it would make far more of an impact and a difference to the developing countries if the majority of the assistance came from investment by the private sector.

Despite its problems, the idea that this aid money could ever just be moved easily and swiftly from foreign aid to helping people in Britain is incredibly simplified and would simply not work. There are number of reasons for this, the main one being that it would take far longer than people are imagining to be able to move the focus of the aid, it would affect jobs all across the world, and would take years to be able to reorganise, by which time the floods would be long since over. Secondly, there is the fact that EU regulations completely prevent any foreign aid money being spent in the UK. And lastly, at this point the difference that any amount of money could make would be negligible.


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