The philosophy and culture of aid – Written submission by Global Justice Now

18 March 2021

About Global Justice Now

Global Justice Now, formerly the World Development Movement, has advocated and campaigned for a just approach to international development for over 50 years. We are a democratic social movement that campaigns on global economic issues (e.g. trade, aid). In recent years, we have repeatedly raised concerns about trends towards privatisation and financialisation in UK aid policy, and have campaigned to oppose the FCO-DFID merger and subsequent cuts to the 0.7% UK aid budget.

Summary

This is timely and important inquiry, not only because of the impending cuts to UK aid but also because, for a number of years, the UK government has unilaterally redefined the purpose of aid to suit its post-Brexit, “Global Britain” agenda. Global Justice Now’s position has been, for some time, that a “mutual prosperity” approach to aid is being deployed as cover to increase the amount of aid that is given to support the private sector and develop export opportunities for UK businesses. Such an approach is highly divergent from, and indeed undermines, the legal obligation for UK aid spending to contribute to poverty reduction.

That being said, we also believe that a focus on poverty reduction is insufficient for UK aid to have a positive impact on the world and to help respond to the key challenges of the next decade (e.g. the climate crisis, global health challenges such as Covid-19). In this submission, we argue that UK aid needs a new mandate to reduce poverty, close global inequalities, and tackle the climate emergency, and strongly urge the Committee to consider these areas throughout the inquiry.

In the following submission we have also summarised some of the key challenges facing the philosophy and culture of aid and have proposed themes and solutions that we believe are worthy of consideration by the Committee throughout your inquiry. The submission is divided into three sections: Reimagining Aid (which focuses on pushing back against the mutual prosperity agenda and redefining what aid should seek to achieve), Decolonising Aid (which focuses on redefining the culture of UK aid away from donor-led development) and Beyond Aid (which highlights three policy areas that are typically not considered to be part of a development mandate, but which nonetheless entail the systemic reforms required for UK aid to be most effective).

1. Reimagining aid

a)       A new mandate - Aid cannot make up for all the injustices and inequalities suffered by the so-called developing world, but it can play an important role in struggles for social justice. In order to do this, we need to start re-envisaging what aid is so that it is considered neither charity nor a strategic tool to secure UK national interests in the world. The government’s “mutual prosperity” agenda has sought to redefine aid towards the latter, but the impact of this on poverty reduction is questionable, and instead this approach has arguably contributed to widening inequalities.

Instead, aid should be re-imagined as a form of global wealth redistribution that aspires to provide for universal welfare. In a similar way to how, at a national level, most societies have some mechanism for redistributing wealth from the richest to the poorest (such as social housing programmes in Germany, or the National Health Service (NHS) in the UK), welfare systems recognise that everyone is interconnected and wealth is not simply generated by the rich working alone. But redistribution shouldn’t just be limited to wealth. For example, to tackle the climate emergency and health challenges, we should also share and redistribute technology and knowledge.

Area to consider: What should the future mandate for UK aid spending be?

GJN recommendation: Notions of “charity” and “mutual prosperity” are insufficient and inappropriate to guide UK aid spending. Instead, aid should be given a new mandate to close global inequalities and tackle climate change by redistributing wealth, knowledge and technology.

b)       The private-first approach has failed – The past decade has seen successive governments increasingly turn towards the private sector to plan, research, and implement development policy. As the Committee has previously highlighted, UK bilateral aid that was spent through private sector contractors (not including NGOs and civil society organisations) increased from 12% to 22% between 2010-11 and 2015-16 when approximately £1.4 billion was given to private contractors.[i] This private-first approach can also be seen in the support given to education and health in the global south; Global Justice Now has published numerous reports in recent years on how UK aid has supported unaffordable private hospitals and for-profit schools, exacerbating inequalities and excluding citizens in the process.[ii] Meanwhile, several scandals have erupted over the conduct and accountability of some private sector contractors and projects in receipt of UK aid.[iii]

By contrast, investing in public services, like the NHS, is a proven means of not only achieving better health outcomes and access to services, but also of closing inequalities across society.[iv] This approach clearly aligns with several of the Sustainable Development Goals (SDGs) and would be the most efficient way to reduce poverty through aid. A progressive aid strategy should support governments to build, expand and strengthen public services (e.g. through budget support and sectoral budget support). Lessons can be learnt from DFID’s experience in pooling money with other donors, through schemes such as the Global Partnership for Education (GPE) which supports governments to develop their own plans in consultation with their citizens, rather than funding multiple fragmented projects which are often donor-led.

Area to consider: Does UK aid currently have an appropriate and evidence-based balance between its support for public services and the private sector?

GJN recommendation: Development finance should always support strong public services and should not finance for-profit health or education projects.

c)       Budget support and cash transfers – In order to tackle inequalities and support public services, fresh approaches to aid spending are also needed. In recent years, the amount of aid disbursed as budget support (the direct transfer of money from donor to recipient government without going through international organisations, NGOs or private contractors) has fallen heavily. in 2018, only £15 million (approximately 0.1%) of UK aid was provided as direct budget support to governments (compared to nearly 20% fifteen years ago).[v] Whilst unfashionable, if done right budget support is one of the most direct ways to support domestic resource mobilisation and strengthen public institutions in developing countries. Spending aid in this way can increase local democracy and accountability.

In Zambia, where between 2005 and 2010, the government received $1 billion in budget support, it not only provided additional finance for health and education, but also led to the government increasing its own domestic resource allocations. Increased investment in education, for example, led to an additional 800 schools opening, over ten thousand additional teachers employed and a rise in primary school pupils.[vi]

Another fresh approach would be the expansion of cash transfer programmes where money is transferred directly to individuals and families. In 2017, only 2% of UK bilateral aid supported cash transfers, despite numerous reports that these programmes were highly effective in reducing extreme poverty.[vii]

Area to consider: How do different methods of disbursing aid influence the philosophy and culture of UK development policy?

GJN recommendation: Significantly increase the amount of UK aid disbursed as budget support and direct cash transfers.

d)       Reform of CDC Group – The recapitalisation of CDC Group since 2017, despite its numerous failures, has been a key failure of recent development policy. Despite the £5 billion cuts to UK aid expected in 2021-22, CDC will receive a further £779 million in ODA from government between April and June 2021. Global Justice Now has previously outlined, at length, the problems with CDC and why its entire business model is inappropriate to support development or meet the SDGs.[viii] Instead, CDC should face root and branch reform and be converted into an international, public Green Development Bank.

Area to consider: Does CDC Group currently play a positive role in UK development policy and what role might it play in future?

GJN recommendation: Convert CDC Group into a public Green Investment Bank that disburses funds to public sector projects around the world.

2. Decolonising aid

a)       Challenging colonial aid narratives – One of the key challenges facing international aid is how to distance modern development policy from condescending, colonial aid narratives that views the global south, or “third world”, as naturally poor and in need of charity from rich countries in the global north. Public debates on the legacies of colonialism in the UK have been reignited in recent months, in part by the Black Lives Matter protests in 2020, and previous Committee inquiries have drawn attention to some of the problematic ways in which the development sector engages, or not, with issues of race and empire. The Kampala Initiative coalition has argued that “the dominant postcolonial narrative of ‘rich donors aiding poor/fragile states’ needs to be challenged, as it distracts attention (and action) from addressing the core of an unfair global trade/tax/tariff/finance regime in which the health inequity between and within countries is rooted”.[ix] In a similar vein, Health Poverty Action have offered practical guides on how to avoid the “damaging language and imagery of aid [and] charity”.[x] Engaging with these ideas throughout this inquiry is an essential component of the Committee’s aim to understand and improve the philosophy and culture of aid.

Area to consider: How does the current philosophy and culture of aid reflect the legacies of colonialism and how might this be changed?

GJN recommendation: Engage with organisations and academics working on these issues and strongly consider the recommendations made in Health Poverty Action’s language guide.

b)       Local-led development: Aid has to be led, owned and managed by ‘local’ people. This is not a radical position; it is at the heart of the international aid effectiveness agenda. At repeated global summits, in Rome (2003), Paris (2005), Accra (2008), and Busan (2011), aid donors including the UK have committed to align their work with developing countries’ own plans and priorities.[xi] But this agenda has been weighed down by technical language and limited by a lack of meaningful monitoring and accountability. As one 2015 ODI report noted: “While local ownership and participation are repeatedly namechecked in development, this has rarely resulted in change that is genuinely driven by individuals and groups with the power to influence the problem and find solutions”.[xii] Far too much of UK aid spending is donor-led, often spent in the pursuit of the UK’s own economic interests and disbursed through private contractors based in the UK. When there have been good examples of local-led development, such as the work of DfID’s Enabling State Programme in Nepal, these haven’t been replicated or learned from.[xiii]

Area to consider: How can the culture of UK aid spending support more local-led development?

GJN recommendation: FCDO should commit to supporting local-led development, should vastly reduce the amount of aid it spends through private contractors in the UK, and should adopt “buy local” pledges for all aid so more money goes to local organisations.

c)       From soft power to solidarity – The past decade has seen the UK government increasingly using development funds to extend the UK’s global influence and build its soft power. The merger of DfID into the Foreign Office and decisions to align more aid spending with diplomatic objectives are only confirmation of a longer trend in which aid has been cynically deployed to grow British influence and trading opportunities. And in 2021, the publication of the government’s Integrated Review for a “competitive era” further demonstrated that international one-upmanship is being prioritised over co-operation.

Yet global challenges like Covid-19 and climate change demonstrate that we are all set to lose out unless governments around the world are able to genuinely co-operate, distribute resources and share technology. We therefore strongly urge the Committee to use this inquiry to consider the implications of growing the UK’s “soft power” through aid spending, and whether a focus on building solidarity might be more appropriate. 

Area to consider: Is growing the UK’s “soft power” an appropriate goal for UK aid?

GJN recommendation: The Committee should reject the use of “soft power” and “mutual prosperity” as guiding concepts for UK aid spending and should instead prioritise international solidarity, wealth redistribution and atoning for the UK’s colonial legacy.

d)       Measuring progressive change – In the recent past, DFID often presented the impacts of UK aid spending with top-level figures on, for example, the number of “lives saved”, or children vaccinated. Often imprecise, these figures suggest an ability to cleanly attribute outcomes to UK development assistance that simply doesn’t exist. A focus on quantifying immediate impacts has also led to an over-emphasis on what can be more easily counted (such as bednets distributed, or school attendance) rather than what truly counts, but may be harder to measure (such as well-being and quality of learning). While these results may make it easier for politicians to justify aid spending to sceptical UK tax payers, rigid quantitative targets can mean inflexible adherence to plans and a tendency to focus on easier to measurer and shorter-term projects.

Area to consider: How does impact measurement influence the culture of aid and how might different methods constrain real change from taking place?

GJN recommendation: A progressive aid strategy would work instead towards developing new processes for tracking and measuring impact that focus on measuring progress towards long-term, transformative structural change (e.g. progress towards achieving internationally-agreed economic and social rights).

3. Beyond aid

As much as some forms of aid spending can help to tackle poverty and improve living standards, it also needs to be recognised that, on its own, aid will never be able to make the systemic changes need to significantly close global inequalities. In order for countries across the global south to stop relying on private investments and instead turn to domestic resource mobilisation (e.g. public spending) to fund strong public services and a just energy transition, important systemic reforms will be needed. It is our view that the philosophy of aid should reflect this understanding that aid alone is not enough to achieve justice, and that the Committee should use its role to also advocate for wider systemic reforms. These include:

a)       Debt cancellation – At the start of the Covid-19 pandemic, 64 countries were spending more on external debt payments than their annual healthcare budget.[xiv] In March 2021, it was reported that the amount of debt owed by African governments to private sector creditors alone was enough to vaccinate the entire continent three times over.[xv] In the decade to come, whilst low and middle income countries will need to invest significant public resources in the battle against climate change and Covid-19, debt could severely undermine a co-ordinated global response.

A comprehensive, cross-government strategy to support international development and meet the SDGs must therefore incorporate advocacy for debt cancellation. However, that does mean that debt relief should be counted as ODA spend, with numerous concerns having been raised about the transparency and legitimacy of such arrangements.[xvi] Instead, we believe that ministers with a development brief, and the Committee, should use their roles to advocate for more ambitious debt cancellation in parliament and on the international stage.

Area to consider: How might UK aid support progress towards the SDGs via debt cancellation?

GJN recommendation: Supporting progress towards ambitious debt cancellation should be a priority for UK aid. However, simply counting debt relief funds as ODA could cause issues with transparency and result in a reduction in programmatic ODA spend.

b)       Tax justice – A core problem with the global economy is the way rules (or lack of rules) that guide international business practices prevent countries retaining their wealth and using it for the benefit of their people. Investment might roll into a country but profits can just as easily flow out again. One of the biggest problems is tax avoidance where corporations and rich individuals shift money around their multinational operations so that they don’t pay tax where it is due, but in lower tax jurisdictions, or tax havens which offer secrecy to businesses.

This is estimated to cost developing countries $50-200 billion a year in lost tax revenue.[xvii] Africa alone is estimated to lose $35 billion every year to tax avoidance – more than the roughly $30 billion annual aid budget for the continent.[xviii] Health Poverty Action has showed how Sierra Leone could fund its entire national health service by ending tax incentives for multinational corporations.[xix]

To support progress towards tax justice, the UK could contribute put resources towards expanding the mandate of the UN Tax Committee, stop opposing (and contribute resources to realise) the UN binding treaty on transnational corporations, or learn lessons from previous aid-backed schemes (e.g. Tax Inspectors Without Borders, HMRC’s Capacity Building Unit) that showed promise in improving tax regulation.[xx]

Area to consider: How might UK aid support progress towards tax justice?

GJN recommendation: UK aid should support national governments to expand their capacity, knowledge and expertise to develop progressive tax regimes, ensuring that the burden of capturing taxes falls on the wealthiest and not the poorest. FCDO must also work with other government departments to ensure that previous work encouraging tax justice in developing countries is not undermined by the UK’s own tax policies.

c)       Wealth taxation – Finally, the culture and philosophy of UK aid should support progress towards the closing of wealth inequalities. Twenty-six billionaires hold as much wealth as the bottom half of the world’s population and the world’s richest ten people collectively own over $800 billion – more than the GDP of Saudi Arabia and Switzerland.[xxi]  Addressing this imbalance is absolutely crucial for both financing strong public services and a just energy transition. Wemos have proposed that taxes should be introduced on “inherited funds, property and profit from investments”, natural resource extraction (by multinational corporations) and on financial transactions as methods of redistributing wealth globally and financing global public health.[xxii] While this would traditionally be viewed as being beyond the scope of UK aid, ministers responsible for development, the Committee, and other advocates for UK aid within parliament should use their role to support national and international efforts to introduce wealth taxation.

Area to consider: How might UK aid help to reduce global wealth inequalities?

GJN recommendation: UK aid advocates should use their role, and work with other government departments, to support any movements towards wealth taxation in the UK and in the international arena.

References