The use of UK aid to enhance mutual prosperity

Report
from Independent Commission for Aid Impact
Published on 23 Oct 2019 View Original

The government is increasingly spending foreign aid in areas where it can deliver benefits to both the UK economy and countries eligible for aid – but care must be taken to ensure the primary aim of poverty reduction isn’t diluted or lost

In recent policy statements, the UK government has signalled its intention to use UK aid to generate economic and commercial benefits both for recipient countries and for the UK – in short, to enhance mutual prosperity.

So far, there is limited information in the public domain about how the UK’s approach to spending aid is changing because of the mutual prosperity agenda. This lack of information has contributed to concerns that the agenda may involve a loss of focus on poverty reduction or even a return to past practices of tying aid (providing aid on the condition that it be used to procure goods or services from the UK).

The purpose of this information note is to provide a descriptive first look at the mutual prosperity agenda and how the UK aid programme is shifting in response to it. It does not reach evaluative conclusions on whether particular interventions are relevant or effective, but it does highlight issues that merit future exploration. We do not focus on other areas of mutual benefit, for instance national security, public health threats or global public goods such as climate change.

Issues for further investigation

  • The UK’s shift towards mutual prosperity has moved it to the position of several other donors and is in line with some partner country expectations.
  • There are potential benefits to the UK aid programme from enhanced partnerships with the private sector, such as use of innovative technologies and financial instruments.
  • Departments are currently proceeding with caution in their use of aid to promote mutual prosperity; we did not find any examples of UK aid being used exclusively to pursue short-term commercial opportunities or to help individual UK businesses at the expense of their competitors.
  • With departments under growing pressure to use aid in support of mutual prosperity, there is a need for greater clarity about the appropriate uses of aid.
  • There are risks that the poverty focus of UK aid may be diluted, with the mutual prosperity agenda creating the risk of pressure to spend aid in developing countries that are most likely to be important trading partners.
  • It is too soon to tell what the outcomes of the mutual prosperity agenda will be, as programming under this banner is nascent. As departments continue to use the aid programme to promote mutual prosperity and the UK national interest, questions will continue to arise about how to ensure the best use of aid and how to maintain coherence across aid-spending departments.