Future of aid during post-DFID era

The recent announcement of merging the UK Department for International Development (DFID) with the Foreign and Commonwealth Office (FCO) has made the development community baffled and anxious. Though this move was being discussed and anticipated for some time, the announcement of the British prime minister has caught many by surprise. The UK government has been pursuing a progressive development policy for the betterment of the world. And DFID which spends about 73 percent of the UK government's official development assistance (ODA) has been a highly regarded development partner globally because of its purpose and action. It carried the ethos of Global Britain. But the integration of DFID and the FCO and the emergence of the new Foreign, Commonwealth and Development Office (FCDO), may threaten this image since concerns have been expressed around focus, adequacy, effectiveness and transparency of aid by the UK government.    

With the objective to reduce and eliminate global poverty, the UK has an exceptional record in supporting the world's vulnerable people and building their resilience. In recent times, it responded to several humanitarian crises across Africa and Asia. Some of these include humanitarian support to Mozambique, Malawi and Zimbabwe after cyclone "Idai", to Sahel for tackling the effects of climate change, to Somalia for preventing the effects of drought and conflict, to Syria for humanitarian response, to east Nigeria for containing the Ebola outbreak, and to Bangladesh for responding to the Rohingya crisis.

DFID has been a major development partner to Bangladesh. Out of 175.8 million pounds total net ODA and humanitarian support by the UK to Bangladesh in 2017, DFID's share was 95 percent, and of the FCO was 3 percent (DFID's Annual Report and Accounts, 2018- 2019). In addition to the government, several other partners including private sector, non-government organisations, civil society organisations, educational institutions and the media have implemented DFID supported programmes during the past two decades or so. During times of crisis, the organisation had redesigned its support to address the emergent situation. These include support for victims of natural disasters, people in "Chars", Rohingya refugees and Covid affected people. Recently, the UK government has provided about 21 million pounds to tackle coronavirus in Bangladesh. The support is to build vital isolation and treatment centres in Cox's Bazar for treating the coronavirus affected Rohingya refugees and Bangladeshi communities.

Global Britain's leadership in promoting transformative research for facing global challenges has been reflected through activities implemented by DFID across the world. In Bangladesh, DFID supported research and knowledge generating programmes in many areas. It has invested in evidence-based analysis of social and economic challenges which can help improve the policymaking process in Bangladesh. Besides, it has provided capacity development support in areas such as tax, trade and electoral processes. To be specific, with the objective to develop a strong public finance system it supported projects like Revenue Reforms in Revenue Administration (RIRA) and Tax Administration Capacity and Taxpayers Services (TACTS) within the National Board of Revenue.

Globally, the UK government spent about 15 billion pounds as ODA in 2019. For Bangladesh, the UK is among the top five providers of ODA. Among the bi-laterals, it is ranked third in providing ODA to Bangladesh after Japan and the USA. The UK is among the four countries in the world that have fulfilled the commitment of providing 0.7 percent of their Gross National Income (GNI) as ODA, according to 2018 data of the Organisation for Economic Cooperation and Development (OECD). Even after the financial crisis of 2008, the UK increased its aid flow. The UK government had promised to provide 0.7 percent of its GNI as aid while announcing the recent institutional change in aid delivery. However, the volume of its aid will be lower than before as the size of the economy has been shrinking due to economic recession in the face of Covid-19.

Apart from the apprehension of reduction in aid flow to poor countries, the transparency of aid under the new arrangement is also a matter of concern. In terms of Aid Transparency Index (ATI), DFID has been in the "very good" category for long. In 2020, it secured ninth position among 47 donors evaluated. The FCO, on the other hand is in the "fair" category, coming in at 38th on the list in 2020. ATI is an independent measure of aid transparency among the major development agencies worldwide. What will be the position of the FCDO in the transparency index is to be seen in the years to come.

The other worry about the unification of DFID with the FCO is the risk of losing focus and independence of aid delivery mechanism. Development policies are best pursued under autonomous bodies which focus exclusively on development priorities and outcomes. It is apprehended that the new FCDO could reduce aid effectiveness by tying aid with commercial or political interests of the UK. Such interests may reduce the flow of aid into countries or in areas where it is most needed and give priority to other strategically important countries. Earlier, similar decisions to combine development agency and the foreign office have been taken by the governments of Australia and Canada. The experience is that development priorities have been overshadowed by political and foreign policy interests. Of course, in Denmark and Norway, the aid administration is under the foreign ministry. However, both these countries are compliant in terms of fulfilling the aid commitments and have been highly efficient in aid management.

DFID's demise and the establishment of the new FCDO comes at a time when the world needs international aid the most. As the world is struggling to overcome the biggest humanitarian and economic crisis of the century due to the Covid-19 pandemic, the need for development assistance by large players like the UK is higher than ever before. Because of Covid-19, the poor have become more vulnerable and some of the progress made in the past decades including child and maternal health, education, and poverty reduction, will be reversed. Assistance is not only needed for rebuilding economies and to save millions of lives but also for innovative research on science, technology, economy and society.

Therefore, any change in the aid policy of the UK government will have implications for Bangladesh's development efforts. Though Bangladesh has reduced its dependency on foreign aid over the years to about 2 percent of is gross domestic product, its contribution to some of the critical sectors including healthcare, education and climate change is still significant. DFID's support has been crucial for Bangladesh to achieve some of the targets under the Millennium Development Goals. Covid-19 has not only risked the achievements of the past but also of the future including the fulfilment of the SDGs by 2030 and Bangladesh's graduation from the least developed country category by 2024. Hence, the role of aid during and in the post-Covid period is immensely critical for Bangladesh as much as it is for the rest of the Global South. The ethos and values of DFID are thus crucial and should be reflected in the new aid architecture of the UK government.

Dr Fahmida Khatun is the Executive Director at the Centre for Policy Dialogue.