The Future of UK Development Co-operation: Phase 2: Beyond Aid - International Development Committee Contents

1  Introduction

Development in transition

1. The manner and geographic distribution of poverty reduction and international development is changing. Over the course of this Parliament, two particular changes have struck us. First, the number of low-income countries has fallen sharply, to only 34 in the latest World Bank list.[1] The number of middle-income countries is rising. However, many of these countries retain stubborn pockets of poverty. Many are also classed as "fragile", or conflict-affected, states: 22 of the 28 countries in the UK Department for International Development's portfolio are fragile.[2] Second, while long-standing concerns such as gender and the provision of public services remain important, the importance of global issues is rising within the development agenda, as problems in their own right, but specifically affecting the growth prospects and poverty reduction potential of developing countries. These issues include conflict, climate, migration, trade, tax, financial stability, youth unemployment, urbanisation, economic development, infectious disease and governance. They require joined-up action across Government, and also necessarily involve multilateral action.

2. The world will seek to tackle these issues alongside poverty reduction in a new framework of post-2015 sustainable development goals. The UK has taken an important role in the international process of agreeing new goals, with the Prime Minister co-chairing a high-level panel in 2012-13. The UN Secretary General issued a 'synthesis report' on 4 December 2014, which sets out the basis for international negotiations in the run-up to their agreement in September 2015.[3] In addition, the world will need to find ways of working together with new global players, in particular China. It also requires appropriate thought about how to develop new models of development co-operation with middle income countries like India without using grants. The UK recently reached the UN target of spending 0.7% of GNI on international development. Thus it is a timely moment to think less about how to increase spending, and more about on what, and how, the money is spent and what skills staff will require for a changing world.

What are beyond aid issues, and why do they matter?

3. The Secretary of State has said recently that the UK's future approach to development will require a focus on the missing issues from the MDGs: economic growth, governance, rule of law, tackling corruption, peace and stability, and putting women and girls first.[4] DFID's written submission covered these issues and some others, including international taxation, knowledge and technology transfer, and education and children.[5] Many witnesses agreed with this agenda, adding issues such as climate, trade, tax, migration, infectious diseases, remittances, arms sales, narcotics, peacekeeping deployments, technology, and intellectual property. Figure 1 illustrates the relative frequency with which different issues were mentioned in written submissions.Figure 1: Frequency of issues in written evidence

4. Why do these issues matter? DFID itself observed in a written submission that "ending global poverty can only be achieved through ensuring the international system works for developing countries."[6] Development experts Owen Barder and Theodore Talbot said that policymakers should pay more attention to "beyond aid" policies for development, for three reasons:

a)  The benefits to poor people that can be brought about by even quite modest 'beyond aid' policy changes are much larger than can be brought about through aid.

b)  'Beyond aid' policies mainly address the underlying causes of poverty, while aid is most likely to be spent well when it addresses the symptoms of poverty and meets immediate humanitarian needs.

c)  As well as being beneficial for development, most of these 'beyond aid' policies would be good for the UK in the short run as well as in the long run. Aid, in contrast, costs the average British household about £430 a year: so the long-run benefits come at a substantial short-term cost.[7]

5. More generally, the Institute of Development Studies emphasised common interests between developed and developing countries:

    Development needs to be redefined as universal progressive economic, social and political change. Long-established views that associated development primarily with poverty reduction and progress in countries of the 'global south' are being contested. The rise of multi-polar politics linked to the BRICS countries and shifts in global geo-alliances has challenged old north-south divisions. Shared global problems, including climate change, environmental and financial system risks, epidemics and conflict are on the rise, with causes and consequences relevant to all people and places, albeit in different ways.[8]

6. At the time of our evidence sessions, the outbreak of Ebola in West Africa featured prominently in public debate. This is a classic example of a global as well as local threat, which requires a coordinated international response at all levels, ranging from aid, co-operation between DFID and other Government departments/institutions, research into vaccines and treatments, to international monitoring and response coordination, as well as deployment of resources on the ground. Investments in global public goods of this kind are of benefit to people in both rich and poor countries.

The inquiry

7. In response to these changes in international development, we decided in 2013 to undertake a two-part inquiry looking at the current UK approach to development, and detailing the Committee's views on the future UK development approach in 2015 and beyond. Phase 1 of the inquiry focused on Development Finance. We published our report in February 2014. We noted that grants from the UK and other donors to developing countries, while still essential, would be of decreasing importance compared with other sources of finance. We called for new financial mechanisms and looked at the relative roles to be played by multilateral organisations and bilateral programmes.[9]

8. This second phase looks at issues 'beyond aid', and how the UK Government increasingly needs to include non-aid policies in its development approach. As Owen Barder and Alex Evans, both former senior Whitehall officials, told us "an effective beyond aid agenda depends on influencing-and hence people-more than on money."[10] DFID staff, their skills and their use of time, are thus of key relevance to this inquiry.

9. We received a particularly large volume of written evidence, with almost sixty submissions. We held three oral evidence sessions, exploring 'beyond aid' issues with experts, academics, an NGO representative, European Union officials, a representative from the OECD Development Assistance Committee (DAC), and the Secretary of State for International Development. The Department of Health sent its Head of International Health Policy as a witness. We invited Sir Kim Darroch, the Government's National Security Adviser, to give evidence, but he declined to appear, citing concerns about sharing internal policy advice—prepared for the Prime Minister—in public. We would like to thank all those who submitted evidence. We would also like to thank our specialist adviser, Simon Maxwell.

The report

10. As our Chair pointed out at our final evidence session, we have always identified ourselves as the 'International Development', not the 'overseas aid', committee.[11] This, one of our final reports of this Parliament, is a chance to set out why. We see it as our 'legacy report', as the end of this Parliament, in April 2015, draws near. The report aims to explore the coverage of issues, the policy processes and the structures needed to implement a wider vision of development. We use as our starting point the fact that development is about more than aid. The report examines whether the Government has an adequate approach to beyond aid issues, and adequate coverage. We explore the policy processes and mechanisms needed to implement a wider vision.

11. Our terms of reference for the inquiry were deliberately challenging, asking whether a stand-alone Department for International Development has a long-term future. We aim to act as a critical friend to DFID, offering a timely prompt about the Department's strategic priorities and direction of travel as it looks into the next Parliament. We will ask whether DFID has the right skill sets as it adjusts to new modes of development co-operation. We will also look outside the Department to ask whether all Government departments work together to achieve a coherent, comprehensive approach to development, and whether the Government has the right structures to achieve this.

12. In Chapter Two, we reaffirm the case for aid. In Chapter Three, we explore transition strategies in middle-income countries, in particular how to build better partnerships between institutions in these countries and the UK. In Chapter Four, we examine the issue of policy coherence for development. In Chapter Five we look at how the UK's approach should change. Finally, in Chapter Six, we summarise our conclusions and recommendations.

1   World Bank, Country and Lending Groups (accessed 21 January 2015) Back

2   DFID written evidence, para 15 Back

3   United Nations The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet Synthesis Report of the Secretary-General On the Post-2015 Agenda (Advanced unedited version, December 2014) Back

4   Rt Hon Justine Greening MP, Secretary of State for International Development, Speech: Beyond Aid - development priorities from 2015 (7 July 2014)  Back

5   DFID written submission Back

6   DFID written submission Back

7   Owen Barder and Theodore Talbot submission Back

8   Institute of Development Studies submission Back

9   International Development Committee, Eighth Report of Session 2013-14, The Future of UK Development Co-operation: Phase 1: Development Finance, HC 334  Back

10   Global Witness submission, para 18 Back

11   Q 198 Back

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Prepared 2 February 2015