Foreign Aid, International Markets and UKIP

Nigel Farage recently promised UKIP would slash our annual £11billion budget for foreign aid by £9billion. On the face of it, this may seem tough but fair – why help those outside the UK when we have a rising level of children living in poverty, a strained NHS and a struggling middle class?

It is briefly worth noting that foreign aid is unrelated to the EU, which UKIP of course see as the source of all our ills. Rather, the tyrannical oppressor here is the evil empire of the UN, which has set targets of 0.7% of GDP to be spent on foreign aid. Currently, our spending on foreign aid is just shy of this target, and has increased by over 0.1% in the past two years. Interestingly enough, every other major party leader in the UK is committed to reaching this goal of 0.7% spending on foreign aid. Why, then, do we see such a commitment to foreign aid, even from the conservatives so well-known for their attitude of self-financing? Moreover, why would the cut-happy coalition not just continue spending in this area, but actually increase it whilst preaching austerity?

There are all sorts of arguments for foreign aiding rooted in a moral perspective, and ones that I’d agree with. These range from our culpability as a former colonial power to our responsibility as a strong nation to help those less fortunate. Also of importance here are the potential diplomatic ramifications that would resulting from severing aid with the third world.

However even from a perspective solely of self-interest, Farage’s ideas are illogical, dangerous and wilfully misleading. A breakdown of how we spend our foreign aid budget is telling here. 22% of our 2011-12 bilateral aid budget (bilateral aid being aid sent directly to foreign governments) was devoted to health, which includes spending in aid of stopping the spread of HIV, malaria and more recently Ebola. An example of how the DFID (Department for International Development, who spend 88% of our budget for foreign aid) use their funding is the £7.5million Emergency Ebola Response Fund. Stopping the spread of diseases such as Ebola and HIV can be important for a number of reasons:

  1. Stopping the spread of particularly virulent diseases such as Ebola reduces the potential for this disease to spread to the developed world
  2. Diseases such as malaria, HIV and Ebola can wipe out huge chunks of developing populations, which has a negative effect on these economies and thus limits potential growth for the international economy
  3. One thing Farage recently complained about was foreign nationals coming to the UK for free treatment of HIV – many of these are asylum seekers, and if a more concerted effort was taken to eliminate diseases such as HIV in the developing world, this would not be a problem in the first place

Also included under health is “reproductive, maternal and newborn health,” which accounted for 6% of our bilateral aid spending in 2011-12. This kind of spending reduces family size in developing countries, and can be seen to great effect in Bangladesh, which has seen the crude birth rate fall from 47 (per 1,000) in 1970, to 35.1 in 1990, to 20.3 in 2012. Smaller family sizes and stabilising populations are key to the development of such economies, which is one reason why we invested £18.6million into improving Bangladesh’s “reproductive, maternal and newborn health” in the period 2011-2.

In fairness, UKIP have committed to token investment in health-based aid on their ever-changing list of policies. One focus of foreign aid that is key and not referenced as sacred enough to avoid cuts on UKIP’s online list of policies, however, is education. The importance of investing in education is reflected in our spending on foreign aid; of the £4.2billion the DFID spent on bilateral aid in 2012, 11.3% went into education. Last year, this figure had risen to 13.4%. Education is important to help developing countries produce skilled workers that can drive forward their economies, thus resulting in more developed trade partners for our country. £44million was invested in Bangladesh’s education system in the period 2011-12, with the DFID concluding that this had led to more girls enrolling in school, as well as improving net enrolment in primary education.

The third and final area of foreign spending I would highlight is wealth creation, which accounted for 13.2% of our bilateral aid budget in 2011-12. Put simply, wealth creation is the idea of accumulating assets that will generate income and thus stimulate economic growth, and much of our spending on foreign aid has gone into creating the infrastructure to allow wealth creation in developing nations. Our investment in this area in 2011-2 was matched by spending 9.6% of our bilateral aid budget in creating “global partnerships.” This is vital to producing more developed trade partners, and an example of wealth creation out of self-interest can be seen through the billions the US poured into the European economies after the second world war via the Marshall plan. Frankly, to not invest in these countries in the short term will be detrimental to the long-term health of the international market, with these nations representing untapped potential for growth. The justification for spending £57million on wealth creation in Bangladesh from 2011-12 was “supporting private sector development, jobs and skills, as the foundation for more sustainable, equitable and higher growth and development over the long term.” Perfectly reasonable justifications, but who needs those when you can just use scaremongering tactics to appeal to base populism?

UKIP are nothing if not short-sighted, however, and this is epitomised through the fact that £240million of the DFID’s bilateral aid budget for 2011-12 went towards prevention of climate change, which obviously benefits the UK as much as anybody else. I won’t bother exploring this point in detail as UKIP don’t subscribe to the idea climate change to begin with, promising amongst other things to end subsidies for green energy and close down the Department of Energy and Climate Change. Parallels can nevertheless be seen in UKIP’s attitudes to climate change and their attitude towards the developing world, though, with both short-sighted in the extreme. After all, why create a better future for the next generation when you can just line the pockets of this one?

It is thus abundantly clear that UKIP’s rhetoric on foreign policy is not just divisive, but also misleading and dangerous. Their approach to foreign aid would represent not just a rejection of moral responsibility, nor just a diplomatic blunder. More than that, these proposed cuts are part of a tunnel-vision approach to the global economy that would stunt future economic growth, and in doing so hurt us along with the nations denied aid; any short-term savings we might gain, already negligible in the grand scheme of government spending, would be inconsequential considering the damaging long-term repercussions of failing to invest in the developing world.

Conor Dunwoody


Sources

UK party leaders consensus on meeting foreign aid targets – http://www.bond.org.uk/blog/23/turnupsavelives-cross-party-consensus-continues

DFID mandate – https://www.gov.uk/government/organisations/department-for-international-development/about#what-we-do

DFID Ebola spending – https://www.goalglobal.org/DEERF_Sierra_Leone_applications

2011-12 and 2011-12 foreign aid spending –

(1) Broad overview: http://www.ukan.org.uk/aid-quantity/uk-aid-breakdown/

(2) Detailed analysis, including individual aid to countries such as Bangladesh:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/67353/Annual-report-accounts-2011-12.pdf

2014 DFID spending – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/403381/SID-2014-revised-UNDP-figure-feb15.pdf

Bangladeshi Birth Rates – http://www.unicef.org/infobycountry/bangladesh_bangladesh_statistics.html

UKIP policies on foreign aid and climate change – http://www.ukip.org/policies_for_people

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