OECD-DAC reform: Changing the rules for the better, not worse
11 October 2017
Rules matter. They can incentivise good behaviour but also disincentivise bad behaviour. This is certainly true in relation to rules on how and where international aid should be used. Rules ensure aid continues to tackle the causes of poverty and address basic needs around the world. As the UK looks to start another round of potentially fundamental rule reforms in the OECD’s Development Assistance Committee (OECD-DAC) on what should and should not be counted as aid, this balance should be at the core of our thinking.
Aid provides vital support to people coping with emergencies and catastrophes beyond their control, helps people and countries tackle the root causes of poverty in their own communities and creates opportunities for many millions of men, women and children around the world. So making sure aid works well for those who need it is not just a strapline or a political point winner but a commitment to the UK public whose tax money funds aid and to the people UK aid seeks to help.
Changing the rules risks watering down the focus of aid. There are opportunities to improve the efficiency and effectiveness of aid – civil society wants to continue working with the UK government to make sure we improve aid globally. We’ve been engaged in the current 4-year process of ODA reform which has seen fundamental shifts already – from how aid loans are counted to what counts as aid for peace and security. But this is why we believe there need to be some hard lines around what we can consider aid. It’s a limited and vital resource tackling often complex and large-scale problems. Diverting it to less developmental or less pro-poor purposes has a real cost in real peoples’ lives.
The UK has a special place in the donor community. It is the first large economy delivering on its 0.7% ODA/GNI commitment, currently the third largest donor in the world and a country with a proud history of leadership on issues from responding to humanitarian crises to improvements in the transparency of aid. This also means that where the UK goes, many others will follow, but equally that not all donors will hold themselves to the same high standards as DFID. This is why it’s important that any process of changing the definition of aid is done multilaterally. Unilateral action risks undermining the credibility, impact and effectiveness of aid around the world; potentially allowing donors to inflate their aid figures and sparking a race to the bottom on standards.
Changes which cross the line from genuine development to using aid for our own military interests are risky. Those two interests may be aligned in some circumstances but there’s a good reason why we have separate budgets for national security and for development – both need and deserve focus and funding, but the objectives are often not the same.
Moves within the EU to make aid conditional on "stemming the flow" of migrants, for example, have come under criticism as it undermines basic humanitarian and human rights principles and does not really meet the "developmental in nature" test for aid. It also fails to meet donors’ interests as it doesn’t deliver the kind of long term development that is critical to ending aid dependence. The aid rules help to prevent politically motivated aid spending and, critically, promote a framework that sets good standards and norms.
It’s not hard to guess why some may wish to use the aid budget for things that don’t pass that development test, such as on national security. But this is why the humanitarian principles agreed at the UN emphasise humanity, neutrality, impartiality and independence. These principles have real world impacts, they ensure that we can help people stuck in the middle of conflict and guarantee the safety of humanitarian workers who risk their lives to help others, and must not be perceived to be involved in military activities. When aid is used to support more forceful interventions you undermine those principles.
There aren’t always easy answers. There is much debate right now about whether aid should or can be used in territories like the British Virgin Islands or Antigua and Barbuda, small islands that were devastated by Hurricanes Irma and Maria. There are obvious arguments for saying yes: it's an unprecedented crisis, the scale of devastation, the tragic cost in lives and livelihoods. For many places affected by the hurricanes, like Antigua, they will be pushed back down the development ladder by this crisis – and we must help. But other territories affected, such as Turks and Caicos or Virgin Islands, are more complicated. These are places with a high income per capita, with national income levels comparable to rich, developed economies. They also have access to other forms of financing and insurance that developing countries simply don't. So it's complicated, nuanced and requires case-by-case analysis. This of course doesn’t mean the UK government shouldn’t help its overseas citizens – it has a responsibility to do so. But it's more a question of where that money should come from – ODA or not.
Equally, aid is a scarce, limited resource and there are urgent demands on aid funding such as tackling the humanitarian crisis facing the Rohingya in Myanmar or getting girls into school which is proven to enable long term, fundamental change.
The focus of aid must remain on sustainable development, that’s what the British taxpayer has a right to expect – that aid will help end poverty. This is the promise we made to the world’s poorest and most vulnerable. UK aid has always been, and must remain, about ending extreme poverty and supporting a fairer, more sustainable future for all.
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