DfID aid reviews: Winners and losers

On Tuesday, March 1, the U.K. Department for International Development will finally announce the results of its bilateral and multilateral aid reviews, which have been billed as the core basis for overhauling how British aid money is spent. DfID advisers have been speaking to chief executives of U.K. non-governmental organizations and saying there would be “some surprises,” although agencies are likely to be pleased. Current events, however, could be a wild card in last-minute adjustments to allocations. Ahead of the unveiling of the reviews’ findings, U.K. Secretary of State for International Development Andrew Mitchell told Devex: “U.K. money should be spent helping the poorest people in the poorest countries, with every penny making a real difference by giving families the chance of a better future. Country programs which are less effective will be closed or reduced and the savings will be redirected towards those countries where they can make the most difference. I am determined to get value for money across my department’s work and focus on the big issues such as maternal health, fighting malaria, and extending choice to women over whether and when they have children.” >> A Conversation With Andrew Mitchell on UK Aid Reform >> Andrew Mitchell: UK Aid Funding to Focus on ‘Value for Money’ In the early days of his tenure at DfID, Mitchell already indicated those that will get the aid budget ax, namely China and Russia. So, which countries and organizations will join these two in the roster of U.K. aid losers, or be spared from the funding chopping block? Here’s a rundown: Winners India Many had thought that India, despite its traditional ties with the U.K., would see its aid cut, like Russia and China. Instead, the annual U.K. aid worth 280 million pounds ($452 million) for India will be maintained, despite concerns from lawmakers and the media. DfID, however, is likely to focus its aid much more tightly on the three least developed Indian states – Bihar, Orissa and Madhya Pradesh – and much more of it will be used to support pro-poor private investment, generate jobs, and improve the delivery of basic services. Challenged on the BBC about the continuing commitment to India, which has its own space program and spends 20 billion pounds a year on defense, Mitchell told the broadcaster: “They do have a space program, but, on the other hand, there are more poor people in India than in the whole of sub-Saharan Africa, and the average income of an Indian citizen is only one-third of that of a Chinese person.” >> Andrew Mitchell Outlines UK’s Engagement with Emerging Economies Ethiopia It is estimated that aid to Ethiopia will rise from 214 million pounds to around 300 million pounds by 2014, thanks in part to the fact that it is seen as pro-Western and a bulwark against the Islamification of states such as Sudan and Somalia. Kenya and Rwanda may also find themselves benefiting as a result of this approach. Zambia is believed to see its bilateral aid rise from 50 million pounds to 150 million pounds over the next five years. Fragile states DfID is expected to define fragile states as the following five: Afghanistan, Iraq, Pakistan, Somalia and Yemen. These conflict-ravaged countries will see an increase in aid to 3.8 billion pounds by 2014. Afghanistan has already been allocated 700 million pounds over the next four years. Pakistan currently receives 140 million pounds a year, but this is “being revised” in light of the devastating floods of 2010. Iraq currently gets 32 million pounds in bilateral aid, while Yemen presently receives 29.8 million pounds. Aid to Somalia, meanwhile, is expected to triple from 26 million pounds in 2010/11 to 80 million pounds in 2013/14. More than half of this assistance will be directed at Somaliland, which Mitchell visited in early February. The money will go toward providing water, emergency nutrition, basic health care and the means to keep livestock alive for up to 500,000 people a year. Alongside this, the focus will be on improving maternal health, establishing stronger communities and a more effective local government, and strenthening the rule of law. While NGOs have largely been supportive of DfID’s commitment to poverty reduction, the emphasis on fragile states has left some concerned that this could end up linking aid to national security rather than need, and the approach could blur the perceived boundaries between military and aid workers, leaving humanitarian workers at risk. >> UK to Increase Aid for Fragile, Conflict Countries Myanmar The current U.K. aid program for Myanmar is worth around 32 million pounds, which will rise to 185 million pounds over the next four years. DfID believes this will help 16 million of the “forgotten poor,” with programs focusing on improving maternal health and curbing malaria. It also expects the money to support 225,000 children through primary school, help increase food production for 200,000 people, and provide microfinance to another 100,000. HIV/AIDS At a private meeting with Anne Aslett, director of the Elton John AIDSFoundation, in December 2010, Mitchell told her: “Without compromising the review I can tell you that the Global Fund [to Fight AIDS, Tuberculosis and Malaria] is coming out of it extremely well. When the reviews of bilateral and multilateral aid are published in the new year, you’ll see our absolute commitment to the fight against HIV/AIDS will be clear and indisputable.” >> UK Commits More Funding for Global AIDS Fight World Food Program DfID will reportedly scale up its support to the World Food Program, citing its “strong” performance in the review. It promises to provide the agency, which has been facing funding shortfalls, with regular funding and emergency cash to undertake crisis prevention work, such as securing supplies ahead of monsoons, the U.K. Press Association reports. Others The Caribbean as well as Zimbabwe are also seen to enjoy increases in U.K. aid funding over the coming years. Losers Economically progressive countries Aside from China and Russia, 14 other countries will see an end to direct aid from the U.K., according to documents seen by BBC. They are Angola, Bosnia-Herzegovina, Burundi, Cameroon, Cambodia, Gambia, Indonesia, Iraq, Kosovo, Lesotho, Moldova, Niger, Serbia and Vietnam. DfID cites Vietnam’s “remarkable recovery” from its difficult past and progress toward becoming a middle-income country by 2012 as bases for withdrawing its bilateral aid to the Asian country. Vietnam is also on track to meet six of the Millennium Development Goals, only lagging on combating HIV/AIDS and achieving good sanitation. As reported by Devex, the U.K. aid agency was due to close its Phnom Penh office on Jan. 31, after 10 years of working there. Prior to this, DfID provided 15 million pounds a year in bilateral funding to the Asian country, 45 percent of which was spent on health programs. There has been a 30 percent drop in mortality among infants and children under 5 since 2000, although maternal death rates remain one of the worst in Asia. >> DfID Plans Closure of Cambodia Office Eastern European countries will take a hit because many are reaching “middle income status” and are also on track to meet the MDGs. DfID plans to close its office in Moldova in March this year. It intends to do the same in Serbia. African countries such as Angola, Gambia, Niger are likely to see their aid from the U.K. disappear because, similar to Vietnam, their economic conditions have improved. Angola, for instance, is now a lower middle-income country and beginning to make some gains on the MDGs. Food and Agriculture Organization DfID is not only planning to slash funding to the Food and Agriculture Organization but is also exploring the possibility of pulling out its membership from the United Nations agency, according to reports. “The review found that FAO’s performance is patchy, particularly at country level, and that reforms need to be prioritised,” DFID said on Feb. 26, as quoted by Reuters. “If the necessary actions are not implemented satisfactorily and performance does not improve then the UK will consider whether it should continue to be a member of FAO.” DfID staff DfID administration staff will be cut by a third. In February, Parliamentary Undersecretary of State for International Development Stephen O’Brien confirmed that the communications team in the U.K. and other offices will see a fall from 109 full-time staff to 60, including press officers, strategic communication officers and digital communications officers. Floors in DfID’s head office are also likely to be rented out. Read more DfID business news: - DfID Procurement Process Now Tougher, More Competitive - Andrew Mitchell: UK Aid Funding to Focus on ‘Value for Money’ Read more international development business news.