EXPLAINER - Britain's foreign aid cut: who will feel the impact?

by Lin Taylor | @linnytayls | Thomson Reuters Foundation
Saturday, 1 May 2021 09:00 GMT

A woman and girl adjust the covering of their family's hut at a camp for internally displaced people (IDPs) in Marib, Yemen April 5, 2021. Picture taken April 5, 2021. REUTERS/Ali Owidha

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Charities say UK aid cuts will harm poor communities already reeling from COVID-19 and could also hamper efforts to curb climate change

By Lin Taylor

LONDON, May 1 (Thomson Reuters Foundation) - Britain has cut its commitment to foreign aid spending in 2021, pledging to spend 0.5% of gross national income, instead of the promised 0.7%.

Foreign Secretary Dominic Raab in April outlined a breakdown of Britain’s development budget, with humanitarian aid mostly impacted.

The temporary reduction in overseas aid could save about 4 billion pounds ($5.34 billion) annually "during a domestic fiscal emergency, when we need to prioritise our limited resources on jobs and public service," finance minister Rishi Sunak said last November.

With the country’s economy hit by the coronavirus pandemic, Sunak said aid spending would rise to 0.7% again when fiscal conditions allowed but did not set a target date.

Hundreds of charities have warned the cuts will harm poor communities already reeling from COVID-19 and could also hamper efforts to curb climate change, with Britain set to host U.N. climate talks later this year.

The U.N.'s children agency UNICEF said in May that Britain would cut about 60% in its aid funding, while the U.N. sexual and reproductive health agency UNFPA said about 85% of its aid would be cut.

Why is Britain committed to spending money on aid?

In 1970, Britain pledged to spend 0.7% of its national income on aid as part of a United Nations pact.

It is among 30 wealthy countries including Germany and Japan that have vowed to meet this commitment each year and, in 2015, Britain enshrined in law that 0.7% of its income must be spent on aid.

"Investing less than one percent of our national income in aid is creating a safer, wealthier and more secure world," reads a government website explaining why it spends money on overseas aid.

In 2020, Britain spent 14.5 billion pounds ($20.18 billion) on aid, meeting the 0.7% U.N. target, according to preliminary data released in April. However, this was a decrease of 712 million pounds compared to 2019 due to a reduction of the country’s Gross National Income (GNI).

Do other countries make the same 0.7% commitment?

Yes, and in fact, several countries have exceeded the U.N. aid target including Denmark (0.73%), Luxembourg (1.02%), Norway (1.11%) and Sweden (1.14%), according to 2020 data by the Organisation for Economic Co-operation and Development (OECD).

In terms of overall spend, the United States is the biggest aid donor, spending $35.5 billion in 2020, followed by Germany ($28.4 billion), Britain ($18.6 billion), Japan ($16.3 billion) and France ($14.1 billion).

Despite the pandemic, official development assistance in 2020 rose by 3.5% compared to 2019, the highest figure on record, the OECD said.

Where does UK aid money go?

The top five countries receiving UK aid in 2019 were Pakistan, Ethiopia, Afghanistan, Yemen and Nigeria, with almost all the money going to countries in Africa and Asia, according to official data published last September.

Britain spent 1.5 billion pounds on humanitarian assistance mostly in Yemen, Syria and Bangladesh, government statistics showed.

The U.N. describes war-torn Yemen as the world's biggest humanitarian crisis, with 80% of the population reliant on aid.

The coronavirus pandemic, economic decline, floods, escalating armed conflict and a severe aid funding shortage have again raised the possibility of famine in Yemen.

Britain also spent around 1.4 billion pounds on health projects including medical research, family planning and infectious disease control globally.

How could recipients of UK aid be impacted?

Aid groups say that reducing the aid budget would harm the world's poorest, hinder climate action and damage Britain's reputation as a leader in international development.

The UNFPA said an initial commitment by the UK to spend 154 million pounds ($214.58 million) on UNFPA Supplies this year will shrink to just 23 million pounds.

UNICEF said it was too soon to know the full impact of the funding cuts, but worried that "children living in some of the world’s worst crises and conflicts will suffer the consequences."

More than 150 million pounds has been withdrawn from programmes fighting neglected tropical diseases (NTDs) said a coalition of aid and research organisations including the Bill & Melinda Gates Foundation.

The Telegraph reported that the UK will slash funding for lifesaving water, sanitation and hygiene projects in developing nations by more than 80%, a move that charities have criticised given the importance of sanitation under COVID-19.

"These cuts will trim UK borrowing by a fraction, but devastate lives across many of the world’s poorest countries," said Kevin Watkins, CEO of Save the Children, in a statement along with 200 charities.

"At a time when the UK should be leading the international community in responding to the climate crisis ahead of the climate summit, it is slashing aid to communities on the front line of that crisis. The UK’s hard-won reputation for international leadership in aid is in tatters."

Bond, a network of UK development agencies, said humanitarian aid will be slashed by around 40% though it is still unclear which countries will be affected.

The Norwegian Refugee Council said such cuts could exacerbate crises in Yemen, Syria, South Sudan, Somalia and the Democratic Republic of Congo.

Why does Britain's government say it is changing the way aid money is spent?

Britain is currently reviewing foreign, defence and security policy, seeking to define a new role for itself in the world after leaving the European Union.

Last June, it merged its diplomatic and aid departments to form the Foreign, Commonwealth and Development Office.

Charities said scrapping its development office, DFID, risked money being diverted to address foreign policy interests rather than alleviating poverty which itself fuels migration and insecurity.

But Britain's foreign minister, Dominic Raab, said the pandemic had shown how security, prosperity, development and foreign policy were inextricably interlinked.

($1 = 0.7187 pounds)

This article was updated on Saturday, May 1, 2021 to include the news of UNICEF receiving aid cuts.

(Reporting by Lin Taylor @linnytayls, Editing by Tom Finn. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly.  Visit http://news.trust.org to see more stories.)