Tuesday 25 May 2021

Turning minima into maxima


One of the few good decisions made by the Cameron government was to set a target that the UK would devote at least 0.7% of GDP to overseas aid. There are always going to be arguments about the appropriateness of individual items within that expenditure – as with any other budget line – but the idea that wealthy countries like the UK should set a minimum target for aid to poorer countries was a sound one. By linking it to GDP, the target level of expenditure will inevitably fluctuate: as GDP increases, so too will the amount of aid increase. Conversely, if GDP falls, so too will the target minimum expenditure for aid decrease. That means, in effect, that after an economic shock such as Covid, the amount of expenditure required to meet the target automatically falls, although given that it is a minimum target it doesn’t necessarily follow that the government has to make real terms cuts. Imposing an additional cut, as the current government has done, to 0.5% was an additional and mean-spirited act.

It gets worse though: as this report indicates, what was a minimum target has been turned into a maximum cap. Thus, the Treasury delayed offering surplus PPE to India – some of which has apparently been binned instead after the delay resulted in expiry dates being passed – because the cost of it would have to be accounted for under the aid budget, leading to cuts elsewhere to remain within the limit which the Chancellor has imposed. What sort of country has the UK become when useable PPE for which we have no need can be allowed to go out of date and be destroyed rather than donated to countries in desperate straits because of an accounting requirement? According to the Independent’s version of the story, “Many Tories proclaim that slashing billions from aid is popular with the British public”. I wish that I could deny the truth of that, but I can only ask how on earth we have been ‘led’ to a position where so many consider it reasonable for one of the richest countries to cut aid to the poorest because it is ‘popular’. The sooner that any state acting thus is dismantled and consigned to history the better.


dafis said...

Contrary to the popular opinions among those opposed to UK government I'm quite relaxed about cutting planned levels of aid temporarily if the level of GDP or any other relevant driver has dropped. What pisses me off about all that is that the "savings" yielded don't necessarily get diverted to any worthy domestic activity. Indeed the savings are far more likely to get ploughed into some other wasteful spend dreamed up by a half baked Tory minister or one of his/her donor cronies. Matters like diverting surplus PPE or any other spare kit to fight Covid should be a no brainer, but when a minister is keen to demonstrate "no brains" this is the kind of nonsense we get.

John Dixon said...

"What pisses me off about all that is that the "savings" yielded don't necessarily get diverted to any worthy domestic activity. Indeed the savings are far more likely to get ploughed into some other wasteful spend..." But - the idea that there is a choice between aid and other things is a fallacy in the first place. A rich country like the UK in control of its own currency can do both. Presenting it as though we have to choose one or the other (often using terms like 'looking after our own first') has three aspects to it:

a) it's a trick to get the poor to blame the even poorer for their poverty,
b) it plays to the populist anti-foreigner (especially those who are poor and non-white) sentiment so common amongst the voters which the Tories are keen to please, and
c) it reinforces the wholly ideology-based household budget analogy.

From a Tory perspective, therefore, what's not to like about it? For the rest of us, it's just another example of their complete lack of care and compassion.

dafis said...

"there is a choice between aid and other things is a fallacy in the first place." Well there are choices to be made. Even where economies are at liberty to issue more credits and money supply it is something that has to operate within parameters otherwise you foster the ultimate "economy of instant gratification".
There is merit in using expanded credit to rebuild a country's infrastructure, its schools and its hospitals, assist its manufacturing and other sectors to make changes so that the demands of modern markets can be met. I would not claim merit for many of the UK's present list of vanity projects. On the contrary they reek of gesture politics and cronyism.
Aid thus comes into the scope of the debate on choices and priorities. That a figure gets "fixed" is fine up to a point as it gives a reference around which plans can be made. Except plans seldom figure. Aid becomes an arm of foreign policy, which rapidly developes into a tool for managing relationships, often with devious and deviant foreign politicians. Too little ends up being committed to those projects aimed at uplifting people's conditions or addressing specific crises. Waste is probably not on a par with our military spending which sets the bar for making money disappear, but Aid could and should do better.

John Dixon said...

You're right, of course, that spending always involves choices, and I wasn't intending to say that it does not. But that doesn't mean that there is a fixed pot and spending more on B always necessarily involves spending less on A. It's a false dichotomy, framed in such a way as to make people believe (in the example of aid) that helping the poorest abroad somehow necessitates failing to provide 'for our own people'. That is a nonsense, but one which many fall for.

Neither do I dispute that aid is sometimes poorly spent or even misspent; but neither of those are valid arguments for an arbitrary cut to the total. They are instead arguments for better control and more focus - which would, in turn, mean that any given level of aid achieves more. I can't disagree with that.