If we spend the 0.7 per cent well, the developing world will benefit—and so will weby Penny Mordaunt / March 27, 2019 / Leave a comment
Brexit was never about the UK withdrawing from the world. It was about engaging with it more directly. As we prepare to leave the EU it is an opportune time to reflect on the future direction of Great Britain. We need to forge a new Great British partnership in areas in which we are renowned the world over: in financial services, education, healthcare, the law and more. It is also an apt moment to reassess the role of UK aid to ensure it makes the maximum possible impact— both for the developing world and in the UK’s national interest.
The British people care greatly about the plight of others suffering all over the globe. Whenever there is an appeal in the wake of a disaster they dig deep to donate millions. Some have suggested that to raise questions about the aid budget is the hallmark of nationalistic, inward-looking, knuckle-dragging, Vote Leave supporters who seek to dismantle one of Global Britain’s jewels: parliament’s commitment to spend 0.7 per cent of national income on aid. This rather ignores the facts. As a percentage of income, charitable giving to others is highest among the UK’s poorest communities. Many of those communities voted Leave. Few of those people would claim to have a monopoly on generosity, patriotism, or global ambition. It is high time we did them the same service.
I believe in aid as a force for good. And I welcome a robust debate about how we do it and the best way to deliver the UN Global Goals—in the UK and overseas. These 17 goals focus on ways to make the world a better place by 2030.
UK aid is not only reducing poverty, hunger and providing clean water and sanitation, it is also tackling disease, terrorism and conflict, creating a safer, healthier and more prosperous world for us all. This is a win for the poorest countries but also a win for the UK. As the prime minister has said, our investment in aid benefits everyone. The Department for International Development (Dfid) is working across government and with trusted agencies outside it to ensure UK aid is not just spent well, but could not be better spent elsewhere. For example, UK aid is supporting diagnostic tests for TB, originally for use in the developing world, but now in use by the NHS. The UK’s Emergency Medical Team has gained skills in tackling diseases like diphtheria in Cox’s Bazar, Bangladesh, which now benefits their domestic work.
We are bringing together the world’s best minds to deliver aid faster, smarter and better. We are working in partnership with organisations like Nasa and the Met Office to tackle cholera in Yemen; with the Gates Foundation to tackle disease; and with the WWF to protect endangered species. UK Aid is stabilising conflict zones where terrorists and extremists could otherwise thrive. Dfid is supporting Iraq as it rebuilds following the Islamic State conflict, increasing political stability, security and prosperity. This benefits both Iraq and the UK.
However, continuing as we are is not going to deliver the Global Goals, which include ending poverty and hunger, providing a quality education for all and reducing inequality. We need the help of the private sector, on top of public sector support, to achieve these goals. Combined global investment flowing into developing nations currently amounts to $1.4tn a year, leaving a funding gap of over $2.5tn a year to deliver the Goals. The City of London manages over £8tn worth of assets but little is invested in poorer countries. If we could redirect just 1 per cent of those assets that would generate additional investment of £80bn.
I want to see more opportunities for British savers to make a financial return in exchange for their goodwill. I can see a future where British people can go to their bank or open an app on their phone and invest in the Global Goals they care most about. We should create new ways, from Global Goal Isas to green finance, to opportunities for British pension funds, to enable people to have a positive global impact with their savings. We should lead the world on impact investing and learn from the philanthropic platforms in the US to enable smarter giving.
The way we spend aid is changing. The UK is working to modernise international aid rules to get the most out of the 0.7 per cent. In future years, as the amount of funding coming back into Dfid’s own development financial instruments— publicly owned financial instruments— increases, we should be open to using the profits to count towards the 0.7 per cent.
The UK’s national interest and its global standing should be central to how we spend the 0.7 per cent. The aim of the UK aid budget should be both a great impact for developing nations but also a direct positive result for the UK too. The opportunities are huge.