Time for a DfiD diet?

  • Over 30 years, extreme poverty has fallen from one in two to one in five in the developing world. Evidence shows that international trade rather than overseas aid has achieved this.
  • However, the UK’s aid budget has increased by nearly 4x in real terms since the late 90s. The 0.7% target has been accompanied by ‘rushed spending’ and ineffective distribution of aid.
  • Only five other countries hit the UN’s 0.7% target for aid spending. On average, these countries ran a 2015 budget surplus while the UK’s deficit was 4.4% of GDP.
  • Problems persist with aid efficacy, particularly with multilateral bodies. UK contributes to around 1/7 of the European Commission’s aid disbursements, yet has relatively little influence. UK paid £7.4 billion to the EC aid budget over 6 years.
  • Brexit means the UK can take back control of aid money given to the EC. But this may mean more waste. DfiD’s bilateral budget would grow by 18% in one year.
  • Now is the time to review the wisdom of the 0.7% aid target.

Daniel Mahoney, Tim Knox - Thursday, 19th January, 2017