A commendable pledge on overseas aid

In George Osborne's emergency budget only international development and NHS spending were ringfenced from the impending public sector cuts. Indeed, Britain's coalition government has pledged to actually increase official development assistance (ODA) over the next three years. The move has been criticised both by those that argue that such spending is unaffordable and by those that argue that government ODA is frequently misspent and can actually do more harm than good. Nevertheless, the secretary of state for international development, Andrew Mitchell, is right to defend this commitment as both "morally right" and in the country's national interest. Matthew Elliot from the rightwing pressure group, the Taxpayers' Alliance, is strongly opposed to the coalition's decision. He argues : "The government are wrong to be ringfencing international aid spending when the budget crisis at home in Britain is so bad." In a poll of more than 1,800 Conservative party members last December, 32% voted that overseas aid as their lowest priority for public spending. In a more recent (non-scientific) survey of more than 28,000 visitors to the consumer website, MoneysavingExpert, 43% wanted overseas aid to be cut first. However, there is a good reason to ringfence ODA spending. It is imperative that aid commitments remain stable . Aid volatility results in short-term planning to the detriment of longer-term strategies. It encourages the stockpiling of aid to create buffer reserves – and thus significantly reduces both the effectiveness and speed of aid results. In a global recession, developing countries are already hit with a reduced inflow of remittances from overseas workers and find it even more difficult to attract private finance or to raise money on the financial markets. Hence, a commitment to tie ODA to a percentage of gross national income (GNI) provides greater long-term stability for aid flows In order to meet the UN recommendations on ODA, the UK has committed to spend 0.7% of its gross national income on overseas aid by 2013. In response to those who advocate cuts, Andrew Mitchell is categorical : "We won't balance the budget on the backs of the world's poorest people." Critics of ODA expenditure would find it hard to argue with that sentiment. The problem arises from the incongruity between this moral concern for the poorest in the global community and the failure of the coalition to make similar ringfenced commitments for the most vulnerable in our own society. With Whitehall keen to devolve much responsibility for the cuts to the local level, services like elderly care, carer support, mental health provision, child protection services and disability support are all likely to suffer significant reductions in funding. This shouldn't be an argument for a reduction in ODA expenditure however – quite the reverse. The sentiment for ringfencing services for the most vulnerable should serve as a template for government policy at home. There is also a wider question of whether aid spending itself is beneficial to developing countries. In Dead Aid for example, Dambisa Moyo suggests that if governments were solely reliant on the financial markets rather than aid they would have become more accountable and less corrupt. It is certainly true that aid is not a panacea. Economist Paul Collier outlines how the "bottom billion" suffer from a number of poverty traps – such as conflict risk, bad governance and being landlocked with poor neighbours. ODA can only ever be part of the solution. It is clear that there needs to be an independent oversight of projects – with clear objectives and measurable outcomes. There also needs to be some level of conditionality attached to aid given directly to governments to minimise corruption. However, the fact that aid is not perfect is not a reason to reject the ODA model outright. The Department for International Development (DfID) has just announced that it will publish full information of all its spending online and will set up a new independent watchdog to ensure greater accountability. Several national awareness projects have also been stopped to refocus that money overseas. The achievements of BritishAid (the rebranded name for British overseas aid) are impressive. In 2007/8 alone, British Aid supplied close to 7m anti-malaria nets, trained more than 100,000 teachers, vaccinated 3 million children against measles and provided clean water for nearly one million people. BritishAid is involved in everything from funding classrooms in Malawi to providing microfinance initiatives in Afghanistan and supporting anti-corruption drives in Uganda. This provision should be a source of pride, not a target for cuts. It is understandable that when faced with cuts to public services at home, people will question government spending overseas. However a commitment to spending 0.7% of GNI in order to help significantly improve the lives of millions of the poorest people across the globe should not be considered excessive. Indeed, the positive bilateral relations through BritishAid involvement in more than 100 countries worldwide are themselves invaluable. And to put our total spending on ODA into perspective, if our annual military budget was simply pared down to that of Germany or Japan we could cover our annual ODA expenditure more than twice over. The coalition's pledge to ringfence overseas aid is therefore commendable. Indeed, this moral concern should serve as a template for how some essential domestic services also need to be ringfenced. The argument that the budget shouldn't be balanced on the backs of the most vulnerable in society is a powerful one. It should be applied both overseas and at home.