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UK Re-Balances its Aid Budget

March 15, 2011

Andrew Mitchell, UK’s Secretary of State for International Development, announced that in readjusting the £6.5billion aid budget (part of an £8.4bn international development budget),  bilateral aid to 16 countries and funding to 4 U.N organizations will be cut. These 16 countries include: Angola, Bosnia, Burundi, Cameroon, Cambodia, China, Gambia, Indonesia, Iraq, Kosovo, Lesotho, Moldova, Niger, Russia, Serbia and Vietnam. Some of those on the list, such as Burundi and Niger, are the world’s poorest countries.

“This government is taking a radically different approach to aid. We want to be judged on our results, not on how much money we are spending,” Andrew Mitchell said in response to much of the anticipated criticism. Mitchell also noted that all aid sources to these nations were considered when deciding to cut bilateral aid,  ensuring that aid recipients are not left without aid entirely.

In 2009/10, Britain spent £4 billion on bilateral aid and £2.5 billion through international organizations, such as the European Commission, United Nations and World Bank. Yet,  many of these institutions are not performing satisfactorily according to reviews and will loose approximately£50 million in funding.  These organizations include: UN Industrial Development Organization to UN Habitat, the International Labor Organization (ILO), and the UN International Strategy for Disaster Reduction. Other organizations and international agencies will be put on probation, in which funding will be cut after 2 years if performance is still deemed unsatisfactory.  Conversely, organizations such as the  UNICEF and  the Global Alliance for Vaccines and Immunization will see an increase in funding from the UK .

With this information, the focus shifts to why and how these decisions developed. The root cause in the loss of funding to some countries stems from the UK desire for better accountability and transparency in aid spending. Andrew Mitchell states, “this is about value for money, it’s about ensuring for every pound we take off hard-pressed taxpayers, we really do deliver 100 pence of development value.” The goal is to focus aid where there will be greater long term impacts, as opposed to giving billions of dollars to countries and organizations without any achievement.

In lieu of the situation, Andrew Mitchell reveals that the new budget will focus on “27  poor, conflict-ridden or fragile” states, including Afghanistan, Bangladesh, Democratic Republic of Congo, Ethiopia, Nigeria, India, Pakistan, Somalia, Sudan, Yemen and Zimbabwe. In the new model, the UK intends to focus 30% of the aid budget on countries judged to be “fragile or on the brink of war”. Some of the countries expected to see an increase in aid from Britain include: Pakistan, Somalia, Afghanistan, Bangladesh, Yemen and Ethiopia (Ethiopia, Bangladesh and Pakistan expected to be the greatest recipients in the new model).

Mitchell declares : “Aid can perform miracles but it must be well spent and properly targeted. The UK’s development program has now been reshaped and refocused so that it can meet that challenge.” Some of these challenges include improving education in Pakistan, where the UK aims to increase the average number of children that attend primary school from 56% to the world average of 87% . In collaboration with the UK, Pakistani officials have agreed to increase spending on education from 2% of their GDP to 7%. Similarly, Britain hopes to increase tax collection in Pakistan, currently only 9% of the country’s total GDP. Other programs in various countries include a focus on childbirth and women’s health and vaccinations against preventable diseases.

As the new model is developed, the UK believes this approach “will be more effective in cutting poverty” and will contribute to reaching the Millennium Development Goals by the target date of 2015. UK officials plan to focus on direct projects that are smaller and more transparent. Depending on results, Britain may serve as a new model for other countries looking to reform bilateral aid.

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