Opinion: An illicit finance-shaped hole in the UK development strategy

The U.K. government’s new international development strategy has attracted considerable comment. Some focused on the “gamble” that by emphasizing trade — a top government priority — the country can support broader foreign and development policy goals, such as protecting liberties and democracy. Others were more critical, decrying the prioritization of “aid for trade” and evidence of the government’s “loss of leadership in global development.”

Yet there has been little comment on one of the strategy’s biggest missed opportunities: the absence of any meaningful focus on illicit finance, despite the significant contribution this would make to development, the strategy's specific objectives, and the government’s wider commitments.

In recent years, the U.K. has demonstrated foresight and understanding by elevating the importance of illicit finance as a development issue through the programming and policy of the former Department for International Development and subsequently through integrating DFID’s illicit finance expertise into a central capability within the Foreign, Commonwealth & Development Office.

Key policy documents have included specific international priorities related to illicit finance, and the U.K. economic crime plan from 2019 explicitly recognizes that illicit finance “has a disproportionately significant impact on the economy and functioning of the state in developing countries.”

The crime plan acknowledges that economic crime “undermines development by distorting governance and economic outcomes, diverting resources, locking in power within elites, undermining the rule of law, and enhancing inequality,” and it sets out a number of actions for the U.K. to take in response. Other, nonpublic strategy documents from the U.K. government — such as its international illicit finance strategy and Africa strategy — also stress the importance of addressing illicit finance to support and enable development.

Yet there is a surprising and disappointing illicit finance-shaped hole in the United Kingdom’s new approach to international development. This omission comes in spite of these prior commitments, DFID’s groundwork to position the U.K. in the vanguard of global approaches to illicit finance as a development issue, and the direct alignment between a focus on illicit finance and the new strategy’s prioritization of “honest and reliable investment,” U.K. interests, and the use of U.K. expertise. This matters.

Not only does illicit finance drain billions from impoverished countries, but it also has a corrosive impact on politics, business, and institutions. Put simply, illicit finance strangles the space and kills the conditions needed for development to occur.

So how should the illicit finance-shaped hole in the strategy have been filled? Three key points should have been emphasized, all of which would have supported the overall aim set out by the foreign secretary in her foreword to the document.

First, the government should have explicitly recognized the sizable contribution that the U.K. could make to international development with remedial action at home as part of its efforts to strengthen the domestic response to illicit finance.

Given the centrality of the U.K. to illicit finance globally, the failure to join up the country’s domestic efforts with a complementary ambition in the new strategy is clearly a missed opportunity. Further, the absence of reference to initiatives such as the National Crime Agency’s International Corruption Unit and the International Anti-Corruption Coordination Centre, which FCDO already funds, is striking.

Second, tackling illicit finance is an area of British national excellence that the U.K. offers for the benefit of low- and middle-income countries. The strategy announces the establishment of new centers of expertise on a range of topics, yet it does not propose building on the previous creation of precisely such a thing: the U.K. International Centre of Excellence on illicit finance, which has been in development since 2020 and awaits only full commitment to launch and show what U.K. expertise can deliver.

This would make a considerable contribution to the goals of the strategy, in direct alignment with its focus on bilateral rather than multilateral aid, promotion of U.K. trade and investment, and demonstration of British leadership.

Third, illicit finance is a transnational threat, and thus the lack of a crosscutting focus on illicit finance ignores a vulnerability that works directly against development aims. The strategy’s proposed shift to increase delegation to embassies and high commissions risks undermining the United Kingdom’s ability to work effectively on global and transnational issues. This compounds the impact of a reported deemphasizing of a central illicit finance capability as part of the recently announced FCDO restructuring.

In sum, the central and corrosive role played by illicit finance in blunting and undermining international development efforts is disappointingly overlooked by the new U.K. development strategy. The illicit finance risks inherent in the drive for increased private sector investment are ignored. The potential for the U.K. government to leverage its existing capabilities and experience to address illicit finance and deliver development benefits directly in line with its own priorities is absent.

This is less a strategy based on evidence and more a statement of political vision for a government that appears not to value the leadership that the U.K. has long displayed in the development world. Had it done so, it would have seized the opportunity presented by this strategy to continue leading the global shift to address illicit finance as a development issue.