What is Foreign Aid?
Foreign aid is any type of assistance that one country voluntarily transfers to another. This could be in the form of capital, goods or services. It is given to poorer countries in order to encourage sustainable development, eliminate world poverty, and help those whose lives have been ruined by conflict or disaster. The United Nations 1969 Pearson Commission report established that all countries should aim to spend 0.7% of their gross national income on foreign aid. Nevertheless, most countries do not come near this target; for example, the US is the largest aid donor in the world but still only donates 0.2-0.3% of its gross national income.
The UK, however, reaches this percentage target year on year, having enshrined it into law in 2015. It gives one of the highest percentages of its gross national income (GNI) in the world to foreign aid (superseded only by Denmark, Norway, Luxembourg and Sweden). As a result of this, Rishi Sunak’s announcement that he would cut foreign aid in the UK from 0.7% to 0.5% has caused significant controversy, with five former PMs opposing the move and Foreign Office Minister Baroness Sugg resigning in protest.
So, what are the arguments for cutting financial aid in the UK? And what are the arguments for maintaining it?
Arguments for Cutting Foreign Aid:
Keeping Foreign Aid At Its Current Level Is Not Affordable
Rishi Sunak argued that “During a domestic fiscal emergency, when we need to prioritise our limited resources on jobs and public services, sticking rigidly to spending 0.7% of our national income on overseas aid is difficult to justify to the British people, especially when we’re seeing the highest peacetime levels of borrowing on record”. This argument is initially convincing: the UK is in the deepest recession in history, with people being made redundant at the fastest rate on record. Cutting the foreign aid budget to 0.5% of the gross national income would save the UK would save £4 billion.
The UK Would Still Be Donating A High Proportion Of Aid
Another argument in support of cutting aid is that even if it was cut, the UK would then still be giving more foreign aid, proportionately, than many top economic powers (including Germany and the US). Dominic Raab, the UK’s Foreign Secretary, argues along these lines.
To Avoid A Culture Of Dependency
Another argument that is often given in support of foreign aid being cut (although not the argument used by the UK government) is that we should aim to avoid a culture of dependency. The aim of foreign aid is to help until the country can stand on its own two feet, not to spoon-feed them so they become completely dependent. Thus, if a developed country is consistently giving a developing country aid over a long period of time, the aid is failing at its purpose.
Arguments for Maintaining Foreign Aid:
Cutting Foreign Aid Breaks Promises
The primary reason that there has been such outrage regarding the UK’s plans to cut foreign aid is that in doing so, promises are broken. The 2019 conservative party manifesto pledged that they would keep to the 0.7% target, a target which is set in law. And while the manifesto was written pre-Covid-19, Boris Johnson reaffirmed his commitment to maintaining the target in June, when the huge economic impact of Covid was established. This recent affirmation makes Sunak’s announcement intending to cut the budget even more contentious. It also signals that the UK is no longer prepared to meet the UN’s targets.
The UK’s promise was also to the world’s most vulnerable people, and as Desmond Tutu states, “A promise to the poor is particularly sacred”. A letter to Boris Johnson from almost 200 charities in protest of the foreign aid cuts echoes this sentiment: “A U-turn on your manifesto commitment to maintain the 0.7 per cent target would signal we are a nation willing to balance its books on the backs of the world’s most marginalised people”.
Maintaining Foreign Aid Could Be Affordable
While it is undeniably true that Covid-19 has negatively impacted the UK’s economy, it does not necessarily follow that the UK cannot afford to maintain its foreign aid budget (contrary to Rishi Sunak’s position). In fact, many politicians, including former Prime Minister David Cameron argue that this area of the budget could’ve been maintained: “We’re breaking a promise to the poorest people in the world… a promise we don’t have to break”. This is the case for a number of reasons:
Firstly, the amount of foreign aid the UK gives is a percentage of the UK’s GNI, not an amount. This means that if the budget stays at 0.7%, the amount of aid donated would still be less than prior years if the economy worsens. Thus, there is no need for a percentage cut, as the foreign aid given will automatically be cut proportionately.
Secondly, interest rates on debt are at a record low level. With less interest to pay on government loans, this makes the UK’s debt payments per GBP of debt historically affordable. So, while borrowing has surged this year, the cost of servicing the increased national debt has actually fallen. This means that it is not straightforwardly true that the UK can’t afford to maintain the foreign aid budget; many economists have recommended upping budgets now in order to preserve the future economy.
Thirdly, there are many other areas that can be cut, and if foreign aid was considered a high enough priority, the government could have maintained the budget and made cuts elsewhere instead.
Foreign Aid Buys ‘Soft Power’
Foreign aid does not simply help the developing nation, but also the donor nation. While it would be nice to believe that all governments give foreign aid because it is their moral duty, the reality is that foreign aid is often used as a bargaining tool. It helps countries develop friendly relationships and gain influence and power. Norway – a country that consistently donates above 1% of their GNI – is a good example of a country that has used foreign aid to gain a seat at discussions normally reserved for bigger and more powerful countries. In 2016, the then president of the United States, Barack Obama, stated that “Our Nordic partners are not large countries, but there are almost no issues that we deal with — whether in terms of security or economics or humanitarian assistance — where the Nordic countries are not some of our most reliable and effective and important partners”.
The Prime Minister has repeatedly referred to a post-Brexit Britain as a global Britain: a Britain that is influential, globally engaged and has a strong international standing. If he wants this vision to come to fruition, then it would seem sensible to maintain a budget that, as described by economist Mihir Sharma, is a “vital source of international reach and power”. This sentiment is echoed by Sir Keir Starmer, the leader of the opposition party, who argues that cutting foreign aid “will not only undermine public trust, but hugely weaken us on the global stage”. This will, in turn, negatively impact the UK’s financial standing, making a move to cut foreign aid shortsighted.
Maintaining Foreign Aid is the Morally Right Thing to Do
An argument often overlooked in debates about spending is whether it is ethically sound to cut such an important area of the budget. The UK has been severely affected by the economic fallout of the COVID-19 pandemic; however, it is a global pandemic, which means that the need for foreign aid is bigger than ever. Former international development secretary Andrew Mitchell warns that cutting the budget risks causing 100,000 otherwise preventable deaths. In addition to fatalities, fewer children will be able to get an education, fewer people will have access to a safe water supply and there will be more instances of FGM and domestic violence. This is why (as previously mentioned) almost 200 charities including Save The Children and UNICEF have called upon the government to reverse their plan to cut the foreign aid budget. It is also why, from an ethical perspective, cutting the budget is a bad idea.
There is no denying that the UK finds itself in financial difficulty. However, cutting the foreign aid budget damages the UK’s collective conscience, international standing and bank balance. In the words of the Archbishop of Canterbury, “Reducing our overseas aid commitment at this critical time is morally wrong, politically foolish and an act of national self-harm. Its impact will be felt not only in refugee camps and conflict zones but also much closer to home”. Thus, if there are other areas of the budget that could be cut first, it would be sensible to do so.