Coming to the aid of aid

The Department for International Development this morning released a statement to parliament on proposed changes to how Britain spends some of its aid budget.

 

Though it still contained the usual drivel on climate change and re-stated the government’s commitment to the 0.7% target, much of it is, in principle, to be welcomed. Essentially, this entails more flexibility with how money can be spent on countries which have faced natural disasters and humanitarian crises, as happened in the Caribbean in recent months.

 

Whilst it seems obvious that the government can spend the aid budget how it sees fit, this is not the case. Instead, the OECD Development Assistance Committee, of which the UK is a member, has a criterion based on Gross National Income per capita: if the country is too rich, its eligibility for aid is greatly restrained. The Department suggested that “as a direct result of the UK raising this issue, the DAC has for the first time agreed on the need to create a new mechanism to re-admit countries that had graduated from ODA eligibility back to the list of ODA-eligible countries.”

 

It remains perverse that the OECD still uses GNI per capita. Some of those countries which exceeded the GNI threshold, such as the British Virgin Islands, have vast disparities in wealth which inevitably skew the calculations which the OECD uses.

 

The TaxPayers’ Alliance has long called for the focus of aid spending to be on disaster relief, with DfID scrapped and its responsibilities transferred to other departments; money would be retained for humanitarian efforts only, rather than the Ethiopian version of the Spice Girls.

 

Today’s statement is a first step, hasn’t yet been implemented and keeps Britain on a path to overspending on gargantuan scale. But it’s a tentatively welcome announcement nonetheless.