Wednesday, 20 March 2013

Why charity doesn't aways begin at home

Opponents of overseas aid have grown ever more vociferous over recent months as first the Government announced that the budget would will be ring fenced from cuts then that it would increase by 40% between 2010 and 2013 bringing it up to 0.7% of Gross National Income (GNI). “We are still living in a world where there are millions of people who live on less than a dollar a day, who are desperately poor, and I think we do have a moral responsibility, as one of the richest countries in the world, not to give up on them just because we are having a difficult time at home,” said Prime Minister David Cameron.
The commitment to 0.7% of GNI has been on the international table since 1970, when it was first passed in a resolution to the UN General Assembly, following a report from the World Bank. Yet since that time, only five countries have reached or exceeded the level. In 2005, at the G8 meeting in Gleneagles there was a commitment to reach the target by 2015. This was further reiterated by 15 EU countries in 2011.
So why is the issue of overseas aid so important? Well it is one way of countering poverty. In a world where more than one billion people live on less than a dollar a day and go to bed hungry each night, taking from the rich nations to give to the poor is the right thing to do.
The moral point can be further developed when it is remembered that much of the poverty in the developing world originates in the developed world. So there is a debt to be repaid. In the banks case a literal one, given that these institutions have profited via debt payments on unfair loan deals with the developed world.

The arms industry is another area, where those in the rich world have profited on the backs of the poor. The UK , US and France are among the five largest arms selling countries in the world. War breeds poverty and instability.

Finally, there are the unfair terms of trade that also mean the countries in the developing world lose out to the rich countries.

Given all of these factors, the contribution of some aid in the other direction to balance up the equation is surely a small price to pay.

So what has aid achieved? Aid agency CAFOD point out that from health and sanitation, to education and governance aid has made an immense contribution to the lives of the poor. To take just one example, aid has funded mass immunisation campaigns for children in impoverished countries that have saved the lives of millions. Measles deaths have been reduced by 60 per cent worldwide, smallpox has been eradicated, and polio has nearly been completely wiped out.

Thanks to international aid, some 41 million more children received primary education in 2005 than they did in 1999 and the average chance of a child surviving to the age of five has doubled. According to some estimates, aid has added one per cent to the annual rate of economic growth in the countries where the poorest billion people live.

In emergencies, aid has made the difference between life and death for hundreds of millions of people. In 2009 alone, the World Food Programme supported by the UK government, provided life-saving food and nutrition for over 100 million people affected by natural disasters, conflict and crises that left them without food.

In addition to the altruistic arguments behind giving aid, there are those of self-preservation. So countries that are not living in poverty are far less likely to turn to things like terrorism against the developed world.

This was recognised particularly by the UK government in 2010 with its Strategic Defence and Security Review, which saw 30% of the aid budget being redirected toward conflict effected countries. This funding is aimed at preventing conflict, that would fuel potential terrorism from the developed world or the need for an intervention to deal with an insurgency. It is also easier to achieve development goals in a peaceful country.

Perhaps the best example of how this policy is effecting the aid budget is the allocation of funding to Pakistan, a country known for its instability and to have been a training ground for terrorism. So the budget goes from £214 million in 2010 to become the leading recipient of UK aid with £446 million in 2014/15. Pakistan will be the highest recipient of UK aid by 2015.

“Britain’s aid plays a critical role in stabilising fragile states –which not only makes volatile regions in the world safer, but also helps reduce the long-term threat of terrorism to the UK,” said Chris Bain, director of CAFOD.

There can be a potential danger here though, where lines can become blurred, with the Prime Minister recently suggesting that aid money might be siphoned off for peacekeeping and security operations. Or put another way using aid money for military matters. The challenge seems to have been beaten off but proves that the aid budget is not sacrosanct and can come under attack from all sides.

The argument of those who would like to see the aid budget reduced focuses on the money being better spent at home.

The English Democrats Party quote massive reductions in job investments, suspension of work on new libraries and suspension of job schemes for the young. “The English Democrats would halt all foreign aid and instigate a huge review into exactly where taxpayers money has been spent. In these hard economic times. The British Government should be concentrating on putting resources and funding into the creation of new jobs, not pouring money into bottomless pits of overseas aid,” said and English Democrat Party spokesperson.

But how much are we talking about? The aid budget is set to rise from £8 billion in 2010/11 to £12 billion in 2013. Or put another way from 1% of total government spending to 3%. Total government spending was £694.89 billion in 2012. The aid budget of £8 billion compares to £166.98 billion for Work and Pensions and£37.25 billion for Defence.

Perhaps instead of attacking the aid budget in terms of overall spending it might be better to argue that there are other ways that the pot might be made that much bigger to allow more spending in all areas. This could happen if the £42 billion lost in tax avoidance each year were collected.

Then there are other glaring expenses that surely could be cut before aid, like the £13 billion over spend on the Eurofighter and the almost £4 billion a year spent by government on management consultants.

One crumb of comfort for those opposed to increasing the aid budget is that because the UK economy is now growing so slowly the actual amount to be paid out as a percentage of GDI will now be less.

A Mori poll back in 2009 found aid as being the most popular area to be cut to restore the public finances. The argument in favour of continuing to give international aid is irrefutable but maybe the case needs to be made more strongly to the public. “There is clearly an ethical case for increased spending on international development. However, that case can only stand if that spending is well targeted and effective and is seen to be well targeted and effective,” said a spokesperson for the Institute of Fiscal Studies. The case clearly needs making again and again if the old cry of charity begins at home is not to be heard once again. 

4/4/2013   Morning Star

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