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Let’s Have A Real Debate About Aid

As the would-be next Prime Ministers of Britain gear up for tonight’s second televsion debate, focused on foreign policy, we thought we would offer a few thoughts about one of the most important questions: what to do about foreign aid. At first glance, there seems to be little up for grabs. Labour, the Conservatives and the Liberal Democrats all swear solemnly that they will stick to the existing (so far unfulfilled) plan to spend 0.7% of Britain’s national income on aid by 2013. Yet whoever wins the mandate of the British people on 6th May, will face some crucial choices.

The Labour Government that has been in charge for the past 13 years can certainly take credit for a huge increase in aid during its time in office – in 2009 the United Kingdom spent more than £7 billion helping poor countries, compared to little more than £2 billion when Labour came into government. Inflation and economic growth have helped to boost that cash figure but, even as a percentage of national income, Labour has doubled the British taxpayer’s generosity from 0.26% of national income in 1997 to 0.52% in 2009.

Yet, if the other parties are equally committed to continuing to push up the aid budget, so what? Well, Labour wants us to believe that their claim is more plausible since it has actually increased aid while in office, whereas the Conservatives halved the aid budget during their last 18 years in power (aid was 0.51% of national income when Margaret Thatcher won her first election in 1979). This criticism of David Cameron’s Conservatives was echoed by some aid veterans in a recent letter, who aired their fears that the Tories are just making the right noises to fend off the old charge that they are the ‘nasty party’  (“political positioning rather than a serious commitment to tackling global poverty,” as they put it). Cameron has fended of these charges by speaking up vigorously for causes such as eradicating malaria and has even convinced aid champion Jeffrey Sachs to be a cheerleader for him.

The reality, however, is that this debate over the 0.7% target is rather beside the point. All the political parties are ducking the tough decisions on public spending that will come thick and fast after the election. In reality, it is hard to believe that aid can be protected from the fiscal axe when it is up against claims on public spending that voters care about far more (polls show that the British public’s support for aid is broad but thin and, for the first time, declining).

Worse, while the UK has stuck to its aid pledges made at the Gleneagles G8 summit in 2005, many of the other rich nations at that meeting have already started resiling from those commitments. Indeed, in 2007, the last time rich countries were asked to throw money into the hat to subsidise World Bank loans to the poorest countries, the UK ended up paying in more (14%) than the United States (12.2%), or Japan (10%), or even Germany ( 7.1%) and France (6.5%) combined.

When the political leaders debate tonight, the real questions they should be addressing are how to make aid achieve real outcomes and how to harness philanthrocapitalism to lever in new financing to close the gap left by shrinking government aid budgets.

One might expect the Conservatives to be taking a lead here, given their anti-big government, ‘Big Society’ agenda. Sadly, they are not. The international development section of their manifesto is a barely-warmed-over repeat of their rather uninspiring policy statement from last year.

The Labour manifesto is an equally disappointing read, especially as Gordon Brown has been a big supporter of philanthrocapitalism in the past through the Social Investment Task Force that he created as Chancellor of the Exchequer in 2000 and through his work with the Gates Foundation on new aid mechanisms like Advance Market Commitments for medicines.

Is Nick Clegg, the leader of the Liberal Democrats, whose promise of new thinking has wooed British voters so far in the campaign, the man to break away from the old aid orthodoxies? Not if you read his party’s manifesto, which offers nothing but platitudes on the subject.

So what should a British government do? Well, it is all set out in our own ‘Philanthrocapitalist Manifesto’ and available to one or all of our political leaders to adopt as their own. Gordon, Dave, Nick – call us.

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