Devex Newswire: The ‘piles of cash’ going to UK development finance among aid budget cuts

Subscribe to Devex Newswire today.

This is a preview of our daily Newswire. Sign up to this newsletter to receive an inside look at the biggest stories in global development.

Today: Catch up on the biggest issues of the World Bank Spring Meetings as I speak with my colleagues in a live conference call for Devex Pro subscribers. Sign up here for a 9 a.m. ET (3 p.m. CET) start. And more on raising tensions over where remaining U.K. aid funding should go amid budget cuts.

CDC Group, the U.K.’s development finance institution, is set to receive about $1.1 billion of the country’s aid budget for 2021, Will Worley reports. That relatively sizable sum for private sector investments has some aid watchers up in arms at a time when other assistance programs, including critical humanitarian operations in Yemen and Syria, are facing major cuts.

  • "Sending piles of cash to CDC Group while cutting aid to Syria and Yemen is indefensible,” says Daniel Willis, of Global Justice Now, calling the allocation “absurd.”

  • CDC Group has been linked to some investments with questionable development bona fides — such as the Nu Cosmetic Clinic in Bengaluru, India; a palm oil plantation in the Democratic Republic of Congo accused of mistreating workers; and a string of luxury hotels in Africa.

  • In 2020 the U.K. aid budget registered a 5% drop — just under $1 billion — as a result of the country’s shrinking economy. U.K. aid was still tied to gross national income, and the reductions were less than some analysts had feared. But a lack of transparency around where cuts are landing continues to drive a wedge between the government and the development community.

Read: UK aid spending on CDC Group comes under scrutiny

NOT AS I DO

“Step up support to countries’ transition away from fossil fuels and create a clear plan to phase out the bank’s support to them.” — Alok Sharma, the U.K.’s COP26 president.

Even as the U.K.’s foreign aid levels are in steep decline, the government’s top climate change official on Thursday urged the World Bank to be more ambitious in its climate finance goals. Still, many MPs are reportedly concerned that the cuts have jeopardized Britain’s credibility with climate vulnerable countries ahead of the COP26 climate summit scheduled for November.

USER EXPERIENCE

Produced in Partnership: Q&A: Why human development metrics may have to shift

As human development efforts shift to ensure simultaneous protection of the planet, so too should the metrics used to take stock of progress. The Paris School of Economics professor Marc Fleurbaey explains how.

Tech companies face an uphill battle when it comes to building trust in the security of their products. Doing so will require them to rethink how they involve researchers, civil society, and governments from lower-income countries.

For Devex Pro subscribers, Catherine Cheney reports from the World Economic Forum’s Global Technology Governance Summit.

CHANGE IN TONE

The U.N. Palestinian refugee agency hopes the Biden administration is turning the page after four years that saw the U.S. government use UNRWA’s work as a political bargaining chip, Teresa Welsh reports.

  • The State Department announced Wednesday that it will restore $150 million in humanitarian assistance to UNRWA, $75 million in economic and development assistance for the West Bank and Gaza Strip, and $10 million for peace-building programs through USAID.

  • The announcement marks a reversal of the Trump administration’s decision to cut off U.S. funding to Palestinians in 2018 in an attempt to create political leverage over the Palestinian Authority in negotiations with Israel.

  • UNRWA representatives welcomed the announcement, which could help extricate the agency from political terrain in which it has “no capacity to engage, no mandate to engage, and no desire to engage.”

Read: US resumes aid to Palestinians, but needs still outstrip budget

+ In other U.S. foreign assistance news, we’re expecting Biden’s budget preview to arrive — finally, hopefully — today. ICYMI: Biden's 'skinny budget' to give first look at US aid plans

UNPROTECTED

On Thursday, Refugees International published a new report on the humanitarian effects of the COVID-19 pandemic for Venezuelan refugees and migrants in Peru. It cites Peruvian government figures showing that, between March and August 2020, the number of reported cases of sexual violence against women increased 649%.

FORGIVE US OUR DEBTS

Pope Francis is among those calling for debt relief to help alleviate some of the economic damage caused by the COVID-19 pandemic.

“Relieving the burden of debt of so many countries and communities today, is a profoundly human gesture that can help people to develop, to have access to vaccines, health, education and jobs,” the head of the Catholic Church wrote to World Bank and IMF Spring Meetings participants on April 4.

IN THE NEWS

A poll of humanitarian aid reach in Ethiopia’s Tigray reveals fewer than half of those affected by the conflict in the region received assistance. [The New Humanitarian]

The Asian Development Bank and HSBC will make $300 million in funding available to help countries across Asia increase the capacity of their COVID-19 vaccine supply chains. [Reuters]

Police forces on Thursday fired live rounds to break up protests against the U.N. peacekeeping mission in DRC, following its failure to keep citizens safe amid a spate of violent attacks in the country. [Reuters]

Sign up to Newswire for an inside look at the biggest stories in global development.

About the author

  • Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.