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Is a Trade to Be Made for International Aid?

Oct 11, 2017 3 MIN. READ

A new report indicates that the referendum could alter the aid landscape in a big way.

The UK is currently a major donor to the European Union (EU), contributing approximately £930 million in 2015 through Department for International Development (DFID) and non-DFID attribution. Some estimates suggest that the EU may lower Official Development Assistance (ODA), which measures resource flows to developing countries, by as much as 15% with the loss of UK contributions following Brexit. Thus far, the UK has continued to keep its commitment to spending 0.7% of gross national income on ODA each year, a move enshrined in law in 2013.

The UK Position

The UK is refocusing its ODA priorities. In January 2017, the government published its Economic Development Strategy: prosperity, poverty, and meeting global challenges. There is an emphasis on encouraging trade and furthering national interests while encouraging economic growth in developing countries. This, in turn, will lower poverty while simultaneously opening up markets for UK companies to work in and with. The government has already announced a continuation of its policy for tariff-free trade with developing countries post-Brexit. Examples of what this will mean in practice can be understood from two scoping study ICF conducted recently. One was part of the Foreign & Commonwealth Office’s (FCO’s) Global Cities Programs to better understand future urban planning investments and opportunities in Turkey, South Africa and Nigeria. The other focused on energy use in emerging economies.

The UK is also already putting more focus into is conflict and stabilization. The Conflict, Stability and Security Fund (CSSF), of which ICF is part of a supplier consortium, has a budget of over £1billion annually to address the root causes of global conflict, insecurity, and instability. This multifaceted fund covers a range of projects and programs. At its launch in 2015, it was described as a “more ambitious approach” in tackling conflict. This aligns with recent moves by the government to take a leading approach internationally as well as advocating for British interests through ODA spending. Indeed, the 2017 DFID Economic Development Strategy outlines the goal of bringing economic opportunities to the most fragile states. Going forward, funding on these topics is likely to continue at high levels as demonstrated by some of the top recipients of UK bilateral funding, including Somalia, Pakistan, Nigeria, Syria, and the Democratic Republic of the Congo .

The EU Position

As for the EU, adjustments will need to be made in accordance with lower budgets, but its priorities are unlikely to shift vastly. The Sustainable Development Goals, are likely to remain the key infrastructure behind ODA spend via the EU. Much like the UK’s CSSF, the EU has an Emergency Trust Fund to assist a group of countries across Africa that are fragile, impacted by migration, and will benefit most from the aid. Having conducted evaluations of nutrition programs across the Sahel region and undertaken the monitoring and evaluation of the EU’s development cooperation portfolio in Iraq, ICF is well-equipped to provide the evaluation services needed by the Emergency Trust and the EU’s other funding instruments.

The Changing Focus of International Aid

As with any change, there are many variables at play. One thing, however, is clear: Aid will need to work harder to prove its worth.

Aid will need to act as a stimulus for change. Contractors will need to demonstrate interventions that create legacy--for social benefit and economic prosperity. Interventions that complement and leverage other initiatives to achieve more for less. Interventions that are adaptive and offer greater transparency, leadership, and differentiation. Interventions that achieve a return on investment, meet objectives, and realize political aspirations. 

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