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There may be changes coming to the way that we classify money spent as aid. Why does this matter? Because it could change whether we intend aid to be poverty-focused.
Simon Maxwell, the international aid policy expert, tweeted on Saturday that DFID (the UK Department for International Development), intends to lobby the DAC group of donor countries to extend the definition of Overseas Development Assistance (ODA – what we can classify as aid) to include work for middle income islands, and to enable work in the British Overseas Territories.
One question here is “why do the rules need to change?”. DFID already has the legal power respond to emergencies anywhere, and to support British Overseas Territories (enshrined in the International Development Act of 2002).
There are two things it cannot do though:
However in response to problem 2 there, the UK Government already has some flexibility, as DFID is not the only UK government department that spends ODA. For example the cross-governmental Prosperity Fund supports work that is designed to promote growth, rather than reduce poverty, in countries such as China, Malayasia and Turkey, which are probably not at the top of people’s mind when they think about the recipients of overseas aid even though the work itself is probably valuable.
So should the UK tackle problem 1, to try to extend the geographic scope of the OECD/DAC rules? This debate is likely most recently prompted by this year's hurricanes in the Atlantic, although like all debates about aid reform, it has many angles. The British government was reportedly incensed that it could not allocate ODA to the British Virgin Islands, to support its reconstruction, as BVI is classified as a high income country. Small islands do have particular vulnerabilities to climate events, and the long-standing demand from the aid community that climate finance should be additional to development finance seems doomed by the lack of political and public support for providing additional finance. Poverty is not only a question of GDP, and disasters can wipe out progress and send countries back decades in terms of their development.
However, without additional budgetary commitments, aid for high income countries will inevitably mean that aid does not go to poor countries. Given justifiable public anger when aid is not used to target poverty, it seems inconsistent to try to change the rules so that more money is used outside poor countries. For the sake of proportionality, as well, we need to retain the focus on poor countries. At the time of the Atlantic hurricanes, more than 1000 people died in floods in South Asia, 40 million people were affected, and 18,000 schools were damaged or destroyed.
It is really important to remember that there is a huge array of tools for development as well as ODA. It is just that ODA is the only one that is focused on poverty. Loans, political agreements, protecting civilians from the outrageous violations of international humanitarian law going on, diplomacy – all these things have vital roles in development. But the definition of ODA must have a poverty focus, because none of these other things do. And once we start paying for other things with aid – for example, disasters in wealthy countries – we lose the ability to help the poorest. Poverty cannot be eradicated without a tool dedicated to its eradication.
Other countries at the OECD/DAC may be inclined to give Britain a hearing on this. Even those proportionately most generous with their aid budgets – some of the Nordics, and the Netherlands – are feeling fiscally squeezed and have populist rightwing parties snapping up votes. Having a bit more flexibility within the aid budget may not feel like such a big deal. But losing the poverty focus of this unique instrument would make it very much harder to know what we are doing about poverty. The British Prime Ministers since 2015 have expended quite some political capital defending the aid budget against their own right wing. It would be terrible to see that leadership effort go to waste by losing the poverty focus now.
There is a really important debate to be had about what aid should look like, as one of the tools with which we can deliver the Sustainable Development Goals. Molly Anders of Devex pointed out that the OECD/DAC rules have been updated every two years since 1970, they are not (and should not be) written in stone. Poverty is not the only serious global challenge. The fact that countries are moving out of poverty and reaching middle income status, albeit with large numbers of people still living in poverty, is a new kind of challenge. We do not have the political tools to manage massive migrations of people including refugees. Climate change may already be pulling the rug from under our feet, whether we are poor or not. But positively, we have new tools from technology; and new intellectual and cultural resources coming from partnerships, from young people entering the workforce, from the greater engagement of women in development . The Conservative government has made strides in bringing the private sector into development policy much more comprehensively (and we simply cannot meet the financing gap for the SDGs without the private sector’s contribution, so that work is essential).
We should talk about what aid should become – it is an exciting and hopeful discussion to have, and given the challenges we face, absolutely necessary. But in the excitement of reforming how we deliver aid, or in the emotional stress caused by crises close to home, is it right that the definition of aid should become wide enough that it risks leaving the poorest behind?
Here are a few quick thoughts on the DFID Civil Society Partnership Review, released today (4th November 2016).