Truss' UK development plan to focus on investment, economic partnerships

Investment and “economic partnerships” will be the focus of the United Kingdom’s new development strategy, according to a keynote speech from Foreign Secretary Liz Truss.

Truss set out her international policy vision Wednesday, discussing development strategy alongside trade and investment. Topics not mentioned include poverty, climate change, food security, corruption, the COVID-19 pandemic, and global public health.

Some aid funding — for spending related to humanitarian and gender issues — will be restored but at the expense of unspecified multilateral commitments, according to Truss.

She said that the U.K. is “determined to work with our friends to form a network of liberty that spans the world” in a global “battle for economic influence.” Foreign, Commonwealth & Development Office diplomats will be “unashamedly commercial,” Truss added.

“We now have the ability to look at trade, development, diplomacy, and security altogether,” said Truss. “One of the key ways to help countries develop is to remove trade barriers,” she added, saying the United Kingdom’s new Developing Countries Trading Scheme will be “much more generous.” Announced in July, the plan would lower tariffs and simplify regulations for dozens of countries exporting to the U.K.

Alongside seeking new free trade agreements, the foreign secretary said the U.K. is also “building new partnerships with low- and middle-income countries” but gave no examples. Truss cited recently revealed reforms for CDC Group to become British International Investment next year and said the government will “leverage the firepower of the City of London.”

CDC Group chief Nick O’Donohoe recently told Devex that Truss is putting investment “at the center of her foreign policy discussions.”

The development finance institution appears set to play a key role in U.K. foreign policy. “We’re using all of our weight as the world’s fifth-largest economy,” said Truss. “British International Investment, leadership in technology, increased defense spending, and new, deeper trade deals — we are getting out there to build the network of liberty and advance the frontiers of freedom.”

The speech outlined what Truss characterized as the government’s “long-term approach to development,” confirming that an international development strategy — originally expected this year — will not be officially published until 2022.

Asked by Devex how the U.K. could encourage its allies to invest in development without returning to the aid budget target of 0.7% of gross national income, Truss said she supports a return to the full budget “when fiscal circumstances allow” and referenced the planned leveraging of £8 billion in private finance through CDC Group by 2025.

“What I want to do is encourage our allies to put similar increases into their infrastructure investment, helping countries transition to a green economy, helping them build their infrastructure using honest and reliable investment that doesn't come with strings attached,” she added. “That’s very important.”

Truss said the department will be restoring aid funding for humanitarian issues and for women and girls “to what it was before the reductions.” Money is to be taken from multilateral programs to pay for this, she confirmed. FCDO has not yet responded to queries about how much funding will be restored and which multilateral funding would suffer as a result.

Richard Watts, a senior adviser on development finance at Save the Children UK, suggested on Twitter that the government will likely “announce a big cut in funding to World Bank's IDA [International Development Association] at next weeks replenishment meeting, freeing up space.”

Watts wrote that IDA is “the world's largest donor to nutrition … [and an increasing] donor to climate, education & health,” so the move would amount to “giving with 1 hand & taking with the other.”

At the Nutrition for Growth Summit on Tuesday, the U.K. donated nothing, despite massive pledges from other donors such as the United States, the European Union, and Japan.

During a week when FCDO has received severe criticism from politicians and whistleblowers for its performance in the Afghanistan evacuation crisis, Truss said the department is a “national asset” with the “best diplomats in the world,” who “go out there in a positive, proud, and patriotic spirit.” In response to a question after her speech, Truss said she had implemented measures to make FCDO more effective in crisis responses.