Academic calls for reform of UK's 0.7% aid budget to protect poverty alleviation

LONDON — The United Kingdom’s commitment to spending 0.7% of gross national income on overseas aid should be split up to safeguard funds dedicated to poverty alleviation, a Cambridge University academic has said.

This comes amid fears in the development sector over the future direction of U.K. aid, with concerns that too much of the aid budget is being used to support private sector projects and trade partnerships.

To account for that trend, Emma Mawdsley, a fellow of Newnham College at the University of Cambridge who focuses on the politics of aid, said the U.K. government should instead consider a system in which 0.5% of GNI is dedicated to poverty reduction and another 0.5% is dedicated to “economic diplomacy” projects.

The U.K. has been legally committed to spending 0.7% of GNI on official development assistance since 2015.

But speaking at an Independent Commission for Aid Impact event Wednesday in London, Mawdsley, who has researched the Department for International Development’s private sector-led growth agenda, said the government’s commitment to spending 0.7% is in danger of being “hollowed out.”

“I think the 60 years of aid and development system we have had is no longer fit for purpose in the world we live in. I would much rather we reduced the ODA to 0.5[%] and we use that ... for poverty reduction,” she said.

“Then we might create another 0.5[%] to do what we’ve always done: economic diplomacy, export credits hidden and open, inclusive growth, co-prosperity, where we are taking a commercial benefit but done well.”

She later added: “It’s not against private sector involvement [in development]. It's about saying how it can be best harnessed, so it's not an opportunity loss, and we’re not trying to do something with the wrong instrument.”

Mawdsley said this could avoid the pretense that private sector projects are poverty reduction initiatives, while “friction” caused by trying to achieve goals in both areas means that, in the end, “we might do both poorly.”

She added that the U.K. development community needs to recognize “new impulses of state-market hybridity,” such as public-private partnerships, and the complications that come with increasing private involvement. “We need to hold our institutions to account in a way the ODA legislation is not going to be able to withstand,” she said.

Her suggestion comes just days after the U.K.-Africa Investment Summit, which was criticized for its focus on trade and investment — with some feeling this came at the expense of tackling poverty and inequality — despite DFID’s contribution of more than £15 million ($19.5 million).

Mawdsley’s proposal was challenged by some in the audience at Wednesday’s event.

“Wouldn’t the same thing happen to the … 0.5[%] as has happened to the 0.7[%]? What reassurance would you have … of control over that?” asked Ian Mitchell, director of development cooperation in Europe at the Center for Global Development think tank.