More UK Aid Went to Higher Income Countries Last Year. Here's How We Fix This Problem.
As more of the aid budget is spent by other departments, focus on poorer nations is being lost.
The latest aid spending data released by the UK’s Foreign, Commonwealth, and Development Office (FCDO) confirms a worrying trend that more of the money intended to alleviate poverty in the world’s poorest areas is being spent elsewhere.
The FCDO report, published on Sept. 24, breaks down 2019’s overseas development assistance spending (ODA) from the UK — also known as UK aid — by each government department, and by the individual countries that received aid.
The data shows that the UK met its spending target of allocating 0.7% of Gross National Income (GNI) towards aid in 2019, a commitment that is enshrined in UK law. And because the economy grew in 2019, aid spending rose in line with national income from £14.5 billion to £15.2 billion — an increase of £645 million (4.4%) compared to 2018.
However, of that budget, a greater proportion was spent by outside of the Department for International Development (DfID) — the department previously responsible for overseeing the majority of the aid budget, and focusing on spending it in developing countries, until September this year. Of the extra spending that was overseen by other government departments, more of it went to higher income countries.
The share of the total aid funds spent by DfID in 2019 dipped slightly from 74.9% of the budget in 2018, to 73.1% in 2019 — meaning an additional £434 million was spent by other departments.
Money going to higher income nations included £67.8 million for various projects in China, which GDP-wise, despite huge inequality, is the second biggest economy in the world.
The latter took issue with spending on schemes including “photography projects, work to get China to stop animal testing, projects to help local populations spend their money more effectively, and investigating the air quality in Beijing.”
It's vital to have a healthy aid budget, but it should be spent where it's needed most — on helping the world’s poorest people in communities where extreme poverty is rife. How we fix this is by ensuring that principle is upheld and that aid spending remains transparent and accountable.
Low, middle, and high income countries
What the data makes clear is that while DfID was spending the majority of its budget in the poorest areas of the world in 2019, other departments were more likely to send money to what are classed as “low middle income” and “high middle income” countries.
The economic classifications for receiving aid are set by the OECD (Organisation for Economic Co-operation and Development) and there are four in total: least developed countries; other low income countries; lower middle income countries, and upper middle income countries.
The majority of DfID’s country-specific aid — 65% of it — was received by the world’s “least economically developed” nations, the report says, and most of the rest was received by lower middle income countries.
By contrast, the majority (71%) of aid spent by departments other than DfID, went to middle income countries, split roughly equally between lower middle income and upper middle income countries, examples of which include Brazil and Malaysia. The remaining 29% went to the least economically developed countries.
Since the government announced earlier this year that DfID would be merged with the Foreign & Commonwealth Office (FCO) from this September — to form the Foreign, Commonwealth, and Development Office — organisations that work on international development, including Global Citizen, have urged the government to protect the aid department’s spending priorities; and are concerned that yet more funds are likely to be diverted away from where they are most needed, as a result of the merger.
Protecting the focus on poverty
In June, when the announcement was first made by Prime Minister Boris Johnson, almost 200 charities and NGOs working in developing countries signed a letter highlighting that aid is better spent by DfID — due to DfID’s excellent record on accountability, transparency, and effectiveness of spending.
“Many of the NGOs who have signed this letter do not receive a single penny of government funding — yet anyone working to tackle diseases, or get girls into education, or provide water and sanitation to people living in conflict understands that having a government department with the expertise to help build a healthier, safer, and more sustainable world is of critical importance to us all,” Stephanie Draper, the CEO of Bond, a professional association of NGOs, said in June.
Essentially, the way to ensure that the taxpayers' money that makes up the UK aid budget is spent in a way that will make the most difference is to ensure focus remains on extreme poverty.
Global Citizen and the other 187 charities that signed the letter are calling for at least 50% of the aid budget to be ring-fenced for spending in the least economically developed countries, and fragile and conflict-affected states. And we are calling for all of the budget spent to go towards projects that align with the United Nations' Global Goals.
Another important factor moving forward is ensuring the government maintains full accountability and transparency to the British taxpayer through parliamentary and independent scrutiny, and that this new department has its own select committee, and that a bolstered Independent Commission for Aid is in place.
The biggest spenders of aid outside of DfID in 2019 were the Business, Energy & Industrial Strategy Department (BEIS); the FCO; the Conflict, Stability, and Security Fund (CSSF); and the Home Office.
The Home Office mostly spent aid money on housing asylum seekers, the report says. Meanwhile, BEIS spent its increased share of the aid budget on “research activities”; and spent £20 million on climate change-related projects abroad.
The countries receiving the highest injections of aid from the UK in 2019 were: Pakistan, Ethiopia, Afghanistan, Yemen, and Nigeria — together accounting for 28.3% (£1.4bn) of total country-specific bilateral ODA (£5bn).
Raise your voice to help ensure aid spending is always focused on reaching the world's most vulnerable communities and ending extreme poverty by taking action here.