Introduction - Politics of Aid and Development Assignment Sample
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Foreign aid, economic development is the most debated issues in recent years which can be simply referred to as the donation of money, goods, and services from one nation to another nation therefore this report focuses on the key terminology of what development aid is along with how this aid system is organized. Later in the report, the discussion on the Official Development Assistance (ODA) policy of the UK is done. The aid allocation has been discussed based on different criteria such as region, income group, countries, etc. also, the involvement of the domestic policy in combatting the global issues by taking initiative in the aid program has been discussed. Finally, the positive and negative impact of aid on the recipient country has been discussed.
What is Development aid?
According to the Organization of Economic Cooperation and Development (OECD), development aid refers to the Official Development Assistance (ODA) and limited it to grants and relatively concessional loans by the government to developing countries.
In other words, development aid is a donation of a certain percentage to the developing and underdeveloped countries for the development of the recipient country. This aid is established by the Organization of Economic Cooperation and Development and the organization calls this aid as Official Development Assistance which is given to the countries and territories which are on the DAC list of ODA recipients and the multilateral development institutions which include official agencies by local and state agencies in which transactions are administered with the promotion of economic development of the developing countries (www.gov.uk, 2021).
Structure of Development aid in the UK
As noted above, foreign aid is a type of assistance from the government of developed countries to developing nations. The aid is in form of food supplies, money, humanitarian aid, education, healthcare, assistance with building infrastructure, and peacebuilding activities. The aid is also concessional which implies a grant element of at least 45% of loans to the least developed countries, 15% of the loans are provided to the official sector of the low middle-income countries, 10% of the bilateral loans to multilateral development banks and financial institutions (Scotto et al., 2017).
The government of the developed nations can make an agreement with the developing nations for a specific reason. For example, the government of a developed nation can agree to assist those who have been affected by natural disasters or during any conflict. The other way that the government of the developed nation assists is to grant loans to the nation affected by uncertainty with easy repayment options or provisions (Foundation, 2021).
According to Publications Parliament the UK, in 2021, the UK spent £14.5bn on foreign aid and it met the target of 0.7% as decided by the United Nation in 2020. The top five countries that Uk has granted aid include Pakistan, Ethiopia, Afghanistan, Nigeria, and Yemen with almost all the aid going to Asia and Africa. In the year 2019, the UK spent £1.5bn on humanitarian assistance to help meet the short-term immediate crisis for countries like Syria, Bangladesh, and Yemen.
Source - Publications.parliament.uk. 2021
The above figure shows the trend in the ODA of the UK from the year 1970 to 2020. There has been a steady increase in the ODA level since the year 1970, with a rise in the ODA in the year 2005 to 2006. There has been a steep rise in the level of the ODA in the year 2013 when the country met its GNI target of 0.7%. Since the UK GNI is based on the UK commitment to spend on the ODA, therefore, when the GNI increases or decreases, the ODA spend of the UK also increases or decreases (Baker, 2015). The UK continuously rise with the ODA spend from the year 2013 to 2019 while there has been a slight fall in the ODA spend in the year 2020 due to the Covid-19 pandemic.
Aid allocation decisions of the UK
The aid that is provided by the developed nations to the developing nations is subject to decisions made for the allocation of the aid. Most of the decisions that are taken concerning the allocation of aid are based on the recipient's needs and the donor's strategic interests and hence the UK follows the recipient-need model while making any decisions for the allocation of the aid (Heinrich, Kobayashi, and Long 2018). The recipient needs are the developing country's needs due to a shortfall in domestic resources and it is the moral duty of the developed country to provide the aid because there is an unequal distribution of wealth and resources (Morin and Paquin, 2018). While the donor interest refers to the self-interest of the donor to take advantage of the commercial and strategic gains through the aid. However, the allocation decision of aid by the UK is totally on humanitarian grounds and the aid is allocated based on the following;
Figure – 2: UK Bilateral ODA by the receiving regions (£ millions) from 2009 to 2019
Source - Publications. parliament. UK. 2021
· By Region
The region-wise recipients of foreign aid are Africa, America, Europe, Asia, Pacific and as per the data, there has been a substantial increase in the bilateral ODA in the year 2019 for all these regions. For example, for Africa, bilateral ODA increased by £125 million from £2863 million in 2018 with an increase of 4.4% of which the majority of aid was spent on the healthcare sector (Researchbriefings.files.parliament.uk. 2021).
· By Country
The next criteria for which the aid is allocated is according to the country. The top five countries receiving aid are Pakistan, Afghanistan, Ethiopia, Nigeria, and Yemen. However, the three countries that are receiving the highest amount of aid are Pakistan, Ethiopia, and Afghanistan.
Figure – 3: Top 5 country bilateral ODA recipients from 2009 to 2019
Source - Publications.parliament.uk. 2021
· By Income groups
The countries eligible for ODA have been categorized into four categories – Least Developed Countries (LDC), Other Lower-Income Countries (LIC), Lower Middle-Income Countries (LMIC), and Upper Middle-Income Countries (UMIC) (Scotto et al., 2017). The edge for each income group is according to the gross national income per capita and these are reviewed at an interval of three years and any country exceeding the limit of GDP is no longer ODA eligible.
Figure – 4: Bilateral ODA by income group from 2009 to 2019
Source - Publications.parliament.uk. 2021
Allocation of aid decisions of the UK and its association with foreign policy aims and objectives
Since the allocation of the aid is done to the foreign developing countries, the decision of allocation is closely associated with the foreign policy aims and objectives as it is purely based on humane motives (Morin and Paquin, 2018). The UK aid allocation decisions are thus in liaise with the foreign policy objectives which are proved to be beneficial for the recipient countries. To meet the objectives, the DFID announced an aid strategy that would aim at strengthening global peace and security, immediate response to a crisis, promotion of global prosperity, tackling extreme poverty, and helping the people who are prone to such conditions (Morin and Paquin, 2018). This strategy came up with actions such as increasing the climate funding by at least 50% between the period 2016 and 2021.
The role of domestic politics in aid Decision making
The UK leadership role in international aid has been commendable as through its humanitarian donations, it has been an example for all the developed countries as over few years of its existence, the DFID, the UK has built a strong track on the area of developments such as system developments, managing projects and measuring, recording and appraising results (Baker, 2015).
The leadership of the UK has introduced the President's Emergency Plan for AIDS Relief which was the largest commitment by any nation for a single disease. For this, £15 billion was allocated for five years to 15 countries in the African subcontinent (Researchbriefings.files.parliament.uk. 2021). Later in the year 2008, President re-authorized the commitment adding £48 billion of aid over the next five years to prevent AIDS, malaria, and Tuberculosis.
In the year 2005, President Bush introduced President’s Malaria Initiative with an aid of £1.2billion for the next five years to reduce death caused due to malaria. And in the next year, President George Bush and the First Lady hosted a summit to discuss the preventive measures to control malaria. The president also initiated a program to prevent the Neglected Tropical Disease globally and this initiative provided aid of £350 million for five years for the treatment of more than 300 people in Latin America, Asia, and Africa (Mawdsley, 2017).
Impact of aid on recipient countries
There is both positive and negative impact of the foreign aid to the recipient country. On the positive side, the aid has helped in various fields such as reducing poverty, education, increase in technological advancement. Also, according to Gnangnon (2020) the foreign aid significantly contributes to the economic growth of the recipient country. The negative side includes the dependency on aid, bad economic management, corruption within the country. However, with the proper decision to use the aid, the recipient country can effectively manage the usage of aid.
Conclusion
To conclude, the UK has been the only country that has fulfilled the expectation in providing foreign aid and there has been a substantial increase in the efforts with the help of the leadership of the UK to grant aid to the country in immediate need. This report focuses on the key terminology of what development aid is along with how this aid system is organized. Later in the report, the decision on aid allocation has been discussed based on different criteria such as region, income group, countries, etc. also, the involvement of the domestic policy in combatting the global issues by taking initiative in the aid program has been discussed. Finally, the positive and negative impact of aid for the recipient country has been discussed.
References
Baker, Andy. 2015. Race, Paternalism, and Foreign Aid: Evidence from U.S. Public Opinion. American Political Science Review 109(1): pp.93-109.
Davies, Lightfoot and Johns 2015. UK Foreign Aid: What do the British public think aid should be for? [https://www.psa.ac.uk/insight-plus/blog/uk-foreign-aid-what-do-british-public-think-aid-should-be]
Donor Tracker. 2021. The United Kingdom. [online] Available at: <https://donortracker.org/country/united-kingdom?gclid=CjwKCAjw_o-HBhAsEiwANqYhp6_iMJvgJrDKZFx3RedHtUR4yPn8XemXK6ZtamZhT2yZLtWGfxW3jxoCW1QQAvD_BwE> [Accessed 6 July 2021].
Foundation, T., 2021. UK foreign aid: where does the money go?. [online] news.trust.org. Available at: <https://news.trust.org/item/20201120164622-38et5/> [Accessed 6 July 2021].
Gnangnon, S.K., 2020. Impact of Aid for Trade on Trademarks Applications in Recipient-Countries. International Economic Journal, 34(1), pp.33-47.
Government of the UK 2021. [online] Available at: <https://www.gov.uk/government/organisations/department-for-international-developmenthttps://www.gov.uk/government/organisations/department-for-international-development> [Accessed 6 July 2021].
Heinrich, Kobayashi and Long 2018. Voters Get What They Want (When They Pay Attention): Human Right, Policy Benefits, Foreign Aid
Mawdsley, E., 2017. National interests and the paradox of foreign aid under austerity: Conservative governments and the domestic politics of international development since 2010. The Geographical Journal, 183(3), pp.223-232.
Morin, J.F. and Paquin, J., 2018. Foreign policy analysis: A toolbox. Springer.
Publications.parliament.uk. 2021. [online] Available at: <https://publications.parliament.uk/pa/cm201617/cmselect/cmintdev/100/100.pdf> [Accessed 6 July 2021].
Researchbriefings.files.parliament.uk. 2021. [online] Available at: <https://researchbriefings.files.parliament.uk/documents/CBP-7996/CBP-7996.pdf> [Accessed 6 July 2021].
Scotto, T.J., Reifler, J. and Hudson, D., 2017. We spend how much? Misperceptions, innumeracy, and support for foreign aid in the United States and Great Britain. Journal of Experimental Political Science, 4(2), pp.119-128.
