UK aid under fire for focus on self-interest over tackling poverty

The United Kingdom’s independent aid watchdog has sharply criticized the country’s aid strategy for its focus on “short-term U.K. interests” rather than on the intended goal of tackling poverty — and warned the problem has grown since Brexit. Its strategy is given an “amber-red” rating by the Independent Commission for Aid Impact, or ICAI — meaning “unsatisfactory achievement in most areas, with some positive elements.” The report urged British Prime Minister Rishi Sunak’s government to draw up fresh “guiding principles” for its “aid for trade” programs, and return to cooperating with rules-based international institutions instead of “working alone.” The ICAI review notes there was “a shift towards using aid in the UK national interest” from 2015 – when the Conservative party began governing alone – alongside “promoting economic growth and poverty reduction in developing countries.” However, this trend only gathered pace when the U.K. left the European Union in 2019, its review states, with a fresh emphasis on working “primarily with established enterprises in more developed markets,” rather than “interventions that benefit the poor.” The report noted that the U.K. has also shifted its geographical focus within Africa to larger economies — Ghana, Kenya, Nigeria, and South Africa — to coincide with “stronger” opportunities for trade. “While there is poverty in these countries, poverty levels are greater in other countries in sub-Saharan Africa where FCDO, and the former Department for International Development, traditionally provided more support.” A new strategy for international development published last year by then-Foreign Secretary Liz Truss proposed a further tilt to the Indo-Pacific with its “greater potential for increased trade with the U.K.” ICAI criticized the absence of detailed instructions on incorporating such secondary benefits “without compromising the primary purpose of UK overseas development assistance, which is poverty reduction.” Its report also highlights the risk from the huge – and continuing – cuts to U.K. aid spending “which have left a portfolio that is more fragmented and thinly spread.” It detailed commitments that had reportedly been canceled midyear in Ethiopia and Kenya, which had led to staff layoffs and program disruptions. “The UK has suffered some reputational damage, and ICAI’s review underlines the importance of keeping partners updated in a timely and transparent way when funding levels change,” the review says. There are “areas of strength,” it notes, “including delivering significant reductions in the time to trade across borders and contributing to increases in trade.” But “who benefits is less clear,” the watchdog points out, because whether increased trade helps poorer communities depends on other factors such as the strength of small firms and job opportunities. “Further support is often needed — for example to small businesses and farmers — and the report finds some aid programmes are not paying enough attention to whether these measures are in place,” ICAI finds. Its commissioner, the former member of Parliament Hugh Bayley, who led the review, said: “Trade is a powerful driver of economic growth, but growth doesn’t automatically help poor people. There are winners and losers, so aid for trade needs to focus relentlessly on ensuring that small businesses, smallholder farmers and employees reap some of the value of greater international trade.” Between 2015 and 2021, around £638 million ($792 million) of U.K. aid was spent on support for trade policy and regulations, 70% from bilateral aid and 30% put through multilateral channels. Stephanie Draper, chief executive of Bond, the U.K. network for organizations working in international development, called for a trade strategy that “does not compromise” sustainable development. “Trade can be a positive lever for development, but the government must focus on lower-income countries which are excluded from global trade rather than more advanced economies that align with the UK’s trade interests,” she said. Max Mendez Parra, trade policy specialist at the ODI global affairs think tank, warned that it is difficult to prove a link between trade and poverty reduction. “It doesn’t mean the poorest don’t benefit from improved trade, or that the UK shouldn’t support trade-related aid programmes,” he said. “But it is very hard to show a simple direct connection.”