UK reduces foreign aid budget for Yemen and beyond: what does that mean?
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In the UK, yesterday was Budget Day, one of the biggest events of the year for politics nerds. But it was in the November Spending Review that we found out that the UK would cut its foreign aid commitments as its economy recovered from the pandemic. This now put the UK’s foreign aid contributions below the United Nations’ 0.7% of GNI (Gross National Income) target for the first time in almost a decade. The UK’s own target is now 0.5% for the foreseeable future.
This hit headlines again when the government announced on Monday the amount the UK is pledging to war-torn Yemen has been cut from £214m in 2020 to “at least” £87m in 2021. This constitutes a cut of nearly 60%.
Yemen was the fourth biggest recipient of aid money in 2019 from the UK; in 2020, the British Foreign Secretary said the money helped vulnerable Yemenis to get access to food and household supplies, clean water supplies, and help to combat coronavirus. The government still hopes to fund 400 health clinics, provide essential food supplies, and give access to clean water for over one-and-a-half million people with its lower budget.
But the decision has been met with stinging criticism, particularly from the government’s own benches. Former Conservative International Development Secretary Andrew Mitchell called the cuts “unconscionable” from “the fifth-biggest economy in the world” and the “lead country at the UN on Yemen”. The Opposition Labour Shadow International Development Minister Preet Kaur Gill agreed, accusing the government of “betray[ing] hundreds of thousands of Yemeni children” on the brink of starvation, while going back on the country’s “proud history of stepping up”.
Even Jeremy Hunt, Foreign Secretary under former Prime Minister Theresa May’s government, said he was “deeply disappointed” with a decision that came a week after the UN declared the Yemeni famine the world’s “worst…for decades.”
The government replied saying that Britain’s contribution to the global Yemeni aid fund continues to put the country in the top three-to-top five donors in the world. As of 2020, this is true: Britain is the third biggest donor in financial terms only behind the US and Saudi Arabia. We won’t know where Britain lands in the list for this year until 2021 ends.
James Cleverly, the government’s Middle East and Asia Minister, explained to a UN donors’ conference on Monday that “recent global challenges” had led to a “difficult financial context for us all”. This is reflected in the global contributions, where every nation has been cutting back. The UN said that contributions went down from $5bn in 2018 to around $2bn last year. Only $1.67bn (about £1.2bn) was raised from the donors’ conference out of the UN’s target of $4bn (about £2.67bn).
What it means on the ground, though, is not ambiguous, according to rights and aid groups. It means not preventing “full-scale famine”, according to Jan Egeland, secretary-general of the Norwegian Refugee Council. It means a “death sentence”, according to UN secretary-general, Antonio Guterres. It could mean 400,000 under-fives dying of starvation, according to Kevin Watkins, chief executive of Save the Children UK. Whether the criticism from both inside and outside its ranks will be enough for the government to pledge more, we’ll have to wait and see.
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Headlines like these make easy pickings for a government that wants to project a ‘Global Britain’ post-Brexit. In material terms, the Labour head of the international development select committee Sarah Champion said that ambassadors were being asked to cut aid budgets from between 50-70%. On “day 26 of Global Britain”, “our global standing as humanitarians [has been] destroyed,” she said.
Champion was right about the UK’s existing reputation. Britain’s Department for International Development, before being absorbed by the main Foreign and Commonwealth Office, was considered one of the world’s most respected and transparent aid awarders — it used to be responsible for 75% of Britain’s aid.
DfID became part of the larger Foreign, Commonwealth, and Development Office so that foreign aid budgets could be part of larger foreign policy strategy — a key component for Boris Johnson who thought that people didn’t feel like the government had control over aid spending. Critics felt that it would reduce transparency for a world-respected institution and diminish Britain’s global reputation.
The aid budget is an easy target when it comes to government spending. Criticisms include up to a sixth of British aid budgets ending up in tax havens like Switzerland through local cronyism and corruption. In the US, some believe that aid in fact bolsters anti-democratic regimes. Some even consider the UN’s target, set in the 1970s, as far too ambitious. Most countries don’t manage it, and Britain was among a very small groups of countries and the only G7 country to do it.
The voters are sceptical, too. A YouGov poll at the time of the Chancellor Rishi Sunak’s Statement in November found that two out of three Brits were in favour of reducing aid, and majorities for the decision were even found among Remainers, Lib Dems and Labour supporters. This may be less about the criticisms above and more about wanting to prioritise other government commitments that matter to them.
But that doesn’t mean it’s not useful for Britain. Since Tony Blair’s administration, it’s been reasonably explicit British foreign policy to use the aid budget as a way of gaining influence abroad. This manifested itself in gaining footholds in emerging markets and encouraging nations to engage with the international community in ways like freer trade policies or developing democracy.
That gives Britain a stake among other powerful nations that wield similar amounts of influence, both for itself and for the recipient countries it works with. If the amount of work done in developing these ties between Britain and developing nations declines, so does the influence on the world stage that could allow Britain its diplomatic independence post-Brexit, so does the money that could come from the economic benefits. That £4bn saved now could come back to bite Britain later on.
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Very few countries manage the UN’s target. In 2019, the five countries that did in the OECD (a organisation of 37 rich countries that try to develop economic prosperity) were Luxembourg, Norway, Sweden, Denmark, and the UK. Germany wasn’t too far behind, nor the Netherlands. France, with an economy a similar size of Britain’s, had given almost half of Britain’s total as a percentage of GNI. So for Britain, it’s a ‘temporary’ abdication from the very top table of donors, rather than from foreign aid entirely. The 0.5% target would slot Britain between Germany and Switzerland, alongside the Netherlands.
Like the UK, other nations’ foreign aid programmes has honourable intentions but also strategic plans behind them. The United States has been using aid since the Second World War to influence regions; this even happened in Europe with the Marshall Plan, when allies and former Axis powers alike were given rebuild loans with the condition that democracy be rebuilt and capitalism supported. The US now spend almost half of aid on long-term development in health and economic growth, and another third on military support.
Germany has been the world’s second biggest donor in financial terms, focussing on education and climate change but also ‘good governance’ and ‘strengthening of the private sector’. But the German authorities do expect ‘responsibility’ in return, and do not give freely.
This was further outlined in 2020, when Germany joined the trend of countries narrowing their aid interests by cutting their partner countries from 85 to 60. Although it doesn’t appear their budget of €10bn (around £8.6bn) decreased, German Development Minister Gerd Müller warned that countries would lose cooperation if they “remained resistant” to responsible government, tackling corruption, and human rights.
Other countries are less transparent with their chequebooks. Russia, a country with large foreign policy ambitions, was diplomatically referred to as a ‘re-emerging donor’ a decade ago. Indeed, until 2010, Russia was receiving UK aid as the country rebuilt itself from the fall of communism, and the country only spent $472m on aid in 2010 (around £406m today). It also received billions from China since 2000, although China’s resource-hungry economy was equally as interested in Russian oil.
Over the last ten years, Russian aid has gone up by 300%, but where it puts that money gets a bit murky. They say aid is to promote a ‘fair and democratic world order’ alongside promoting good Russian relations, but Nicaragua was Russia’s fourth-biggest aid recipient in 2018, and also happened to oppose the UN’s action on the Russian invasion of Crimea.
Speaking of China, its growing influence on the world stage means that aid is as useful a vehicle for wielding power as it is for the West and Russia. China is even more explicit in keeping its aid figures opaque, going as far as to consider aid spending a “state secret”. But with its aid budgets expanding, it’s become harder to hide the numbers. It was estimated in 2014 that aid totalled around $4bn, a third of the UK’s aid budget then.
There have been criticisms that the country has used aid as a form of ‘debt trap diplomacy’ and that it was the Ministry of Commerce overseeing aid flows rather than a development ministry. In recent years, China has been trying to clean up its act, separating out its developmental aid from the money it gives for its flagship Belt and Road infrastructure initiative.
But COVID has shaken up the foreign aid landscape. The US, considered a global leader in health, turned ‘inward’, while China, having grappled with the virus earlier on, was able to engage in a ‘charm offensive’ of ‘mask diplomacy’ across many parts of the world. In 2020, more than a third of UN humanitarian agencies in Yemen were forced to reduce in size or close entirely (although the UN was struggling to fund them even in 2019).
Not all countries are reducing, though. France is currently passing into law an increase of aid from 0.44% to 0.55% of GNI. As the effects of coronavirus continue to play out, aid will continue to play a vital role in both the prospects of developing countries and diplomacy at the top.