More and better aid and debt relief - Q and As
Why did the figure 0.7% of national income for aid get chosen?
Research by the United Nations
(UN) indicates that 0.7% of rich world GNI can provide enough resources to meet
the UN Millennium Development Goals. The figure was already first committed to
in a 1970 General Assembly Resolution. By supplying a percentage rather than a
set amount, all countries can make a fair contribution relative to their
wealth.
Why should the Department for International Development (DFID) be independent?
Aid should be delivered as part of a project to reduce and ultimately eradicate poverty. An independent DFID is more likely to be able to do this, than if it was part of the Foreign and Commonwealth Office, where aid decisions would be more likely to be subservient to foreign policy or military interests.
What is a debt tribunal?
In the past the focus of debt campaigns has been ad hoc debt cancellation for poor country governments (e.g. Jubilee 2000, Make Poverty History in 2005). However, still only 20% of unpayable poor country debt has been dropped.
There is now great support for a new way of dealing with debt - the creation of a fair, democratic and transparent debt tribunal, run by the United Nations that would review all unpayable or illegitimate debt.
What is wrong with economic conditions linked to debt cancellation and aid funding?
In order to be eligible for debt cancellation or some loans, poor countries must be following policies set by the International Monetary Fund (IMF). In order to actually get debt cancellation or loans, poor countries often have to meet 30 or more specific conditions: some relate to technical reforms of financial management, or meeting the government's own targets on health and education, but many are economic policy changes including widespread privatisation - of water, energy, agriculture, transport, etc - and severe cuts in public spending including cuts in social spending/ services. Too often these undermine democracy and damage living conditions for the poorest.
The UK has promised not to attach economic policy conditions to aid it gives directly to poor countries, saying it is "inappropriate and ineffective for donors to impose policies". The Commission for Africa in 2005 questioned the role of conditions, for instance stating that "forced liberalisation will not work" as a way of reducing poverty. The 2005 G8 communiqué stated that "developing countries...need to decide, plan and sequence their economic policies." Despite this, aid as well as debt relief and cancellation granted by the World Bank and IMF - which the UK helps to fund - still has huge numbers of damaging conditions attached.
What is an ‘innovative financing mechanism'?
There are many ways other than aid and debt relief to provide funds to
poor countries. The first ‘development tax', agreed
in 2006, in the form of the Air Ticket Levy - whose funds provide treatment for
HIV/AIDS, malaria and tuberculosis - sets an important precedent for further
progress in this field.
Decision-makers, in the UK and internationally, should take all steps necessary
for an early introduction of new and additional financing initiatives, such as
a stamp duty on sterling currency transactions (a ‘Tobin tax'), with proceeds
ring-fenced for sustainable international development objectives. This could
raise £400 billion for tackling poverty. The September 2009 G20 meeting
committed to investigate such mechanisms and Gordon Brown expressed his support
in November 2009. The next government must see them through.
Doesn't aid get channelled in to corruption?
Corruption is a barrier to development, and a whole section of the manifesto is dedicated to tackling corruption. The UK needs to make sure it is not supporting corrupt projects through its companies, its private sector projects, or its aid.
One way it can do this is to channel aid in part to anti-corruption bodies and civil society, another is to make changes to UK practice and law to ensure UK companies do not support corruption.
