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Citizenship

UK Government Lays Out 'Radical Next Steps' for International Development After Brexit


Why Global Citizens Should Care
Overseas aid funding is a vital tool in the global effort to achieve the UN's Global Goals to end extreme poverty by 2030. Without collaboration and unity across borders, we won't be able to tackle the world's most pressing issues. And with Brexit on the horizon, now is the time for us to become a truly global Britain. You can join us by taking action here to raise your voice in support of UK aid. 

Penny Mordaunt, the UK’s international development secretary, has laid out what Brexit could mean for Britain’s overseas aid. 

At what Mordaunt described as a “crucial stage of the Brexit negotiations,” she set out her vision for increasing British investment in developing countries, by mobilising the private sector. 

“Global Britain wants mutual prosperity,” she told journalists on Tuesday. “And we want to use our development programmes to build the foundation of a more inclusive global economy. We have just over a decade left to deliver the Global Goals [to end extreme poverty], and we’re off track and we face a financing gap of $2.5 trillion per year.”

Take action: Tell Your MP Why You're Proud of UK Aid — and Call on Them to Make It as Effective as Possible

Mordaunt’s answer to closing that gap is by bringing the private sector into the equation, saying that it “has to be part of the answer.” 

“The City of London manages over £8 trillion worth of assets, but little is invested in poorer countries,” she continued. “Even a small increase would have a huge impact to these countries.” 

But allowing the UK aid budget to be used to help the private sector invest in sustainable development would require “shift[ing] the dial on international aid rules.” 

The international aid rules are set by the Organisation for Economic Co-operation and Development (OECD), by a committee called the Development Assistance Committee (DAC). 

The DAC defines what can and can’t be included as overseas development assistance (ODA) — the official term for aid spending. This definition is important because it ensures the greatest possible consistency among donors, and that aid is always spent on supporting the world’s poorest people.

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Mordaunt’s hope is reportedly to persuade the OECD to reform rules on what counts as aid spending. 

According to Mordaunt, incentivising private sector investment where it’s needed is “the only way we are collectively going to finance the delivery of the Global Goals … to use UK aid to mobilise the private investment needed to fill that financing gap to deliver the Global Goals, tackling the barriers that prevent more investment flowing into developing countries.” 

The plan she outlined would also include the British public, by opening up the opportunities for individuals to invest their savings and pensions in global development. 

“We want to give British savers a change to make a financial return in exchange for their good will to change the world for the better,” she continued. “I want people to have more information about how their savings are used, and the opportunities available to them, to invest in the things that they care about.”

“Why can’t British people go to their bank and invest their savings and pensions in products that will invest in the Global Goals?” Mordaunt said. “Or open an app on their phone and select which goals they’d most like to invest in?”

“And to give people the power to hold companies to account, they will need accurate information on how their money is used and the impact that it delivers,” she said. 

During Prime Minister Theresa May’s recent visit to Africa, in August, May announced that Britain will hold a UK-Africa investment summit in 2019. Mordaunt said on Tuesday that Britain wants “to be Africa’s partner of choice for investment, and the opportunities are huge.” 

“Investing in developing countries in Africa and Asia helps build the markets of the future, and for UK businesses we look to forge new trading partnerships,” she said. “This is sustainable development, the more we do, the more we can trade, the more we trade, the less demand there will be for aid.”

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Mordaunt highlighted that the UK’s commitment to spend 0.7% of its gross national income (GNI) on aid spending — currently outlined in British law — hasn’t changed. 

“We remain committed to 0.7%, but as we do so, we should ensure that the British public get a triple return on their generosity and compassion,” she said. “A personal return to them, a stronger Britain, and a more prosperous and stable world. This is a once in a generation opportunity, and we hope others will also consider this agenda.” 

The response from charities has been to emphasis that UK aid must always prioritise alleviating suffering and ending extreme poverty, and the new emphasis on trade mustn’t detract from that. 

Questions need to be asked about how to ensure UK aid continues to be focused on ending extreme poverty, and about how to ensure transparency, and ensure that humanitarian and development assistance isn’t linked to trade deals. 

“The NGO sector cares deeply about the difference it makes to the lives of people living in poverty around the world,” said Bond, an umbrella group for UK aid organisations — including Global Citizen — in a statement

“This has included building stronger relationships with the private sector to boost investment and maximise impact,” it added. “But the priority needs to be poverty reduction over profit and this must be demonstrated if we are to meet the SDGs.” 

ActionAid UK also issued a statement following Mordaunt’s speech, saying: “UK aid must continue to be fully transparent and focused on supporting people’s rights — not just increasing trade. Post-Brexit, the government must keep people who need it most — particularly women and girls — at the heart of UK aid.”