Brexit and bananas: UK charities fear fall from global stage

April 12, 2019 - 8:37 AM
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European Council meeting on Brexit in Brussels
Britain's Prime Minister Theresa May and Germany's Chancellor Angela Merkel look at a tablet ahead of an extraordinary European Union leaders summit on Brexit at the EU Council headquarters in Brussels, Belgium April 10, 2019. (Kenzo Tribouillard/Pool via Reuters)
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LONDON — Britain’s exit from the European Union could boost populist voices keen to slash foreign aid, redirect it to benefit UK businesses and hit charity budgets, industry experts said.

From Live Aid to campaigning with actress Angelina Jolie to end sexual violence in war, Britain is a leading humanitarian player – the first major economy to enshrine in law a United Nations target to spend 0.7 percent of national income on aid.

After a narrow 2016 vote in favor of Brexit, the world’s fifth largest economy is confused – not only about how or when it will leave the world’s largest trading bloc, but also what part it will play in international development afterwards.

Martha Mackenzie, head of government relations at the charity Save the Children, said Britain was at a crossroads.

“The opportunity is the UK leans into that global role and says: ‘Brexit has nothing to do with isolationism. We have traditionally upheld human rights and we’re going to do that even more’,” she told the Thomson Reuters Foundation.

“There’s also a strain of thought that’s saying: ‘This is a chance to rip all of that up, lean into the destructive mentality that’s taking force in lots of foreign policy circles and pull back from our position on the global stage.”

A worldwide backlash against aid has seen a drop in spending by rich countries amid sex scandals in the charity sector, economic pressures back home and the rise of populist leaders promising to reduce immigration.

Aid spending by major donors fell to $149.3 billion in 2018 down 2.7 percent on 2017, the Organization for Economic Co-operation and Development (OECD) said, with Britain the third most generous country after the United States and Germany.

Trade

As it prepares for Brexit, Britain is working to replicate about 70 bilateral trade deals, while also seeking to prove that UK aid money provides citizens with value for money by bolstering its own trade, investment and global influence.

Rich countries are increasingly using their aid budgets to promote their national interests rather than focusing on helping people in poor countries, Britain’s Overseas Development Institute (ODI) think-tank said last month.

Nearly 30 percent of British aid money is already spent by departments other than DFID, the country’s overseas development office, according to the Independent Commission for Aid Impact, which scrutinizes taxpayer-funded aid.

And some members of the ruling Conservative party are calling for further cuts, and for the overseas aid budget to finance all British peacekeeping and provide 1 billion pounds ($1.3 billion) a year to the BBC World Service broadcaster.

“The fundamental purpose of the aid budget should be to alleviate poverty and to lift the poorest people in the world out of poverty,” said Toni Pearce, Oxfam’s head of advocacy.

“Deciding to shift things around has consequences for those people that could be life or death.”

Prime Minister Theresa May visited Africa last year and promised to use aid to help British companies invest in the continent, holding out the prospect of more non-EU trade as a benefit of Brexit.

The DFID-owned CDC Group, which invests in emerging markets to promote development, said in November it planned to invest up to $4.5 billion across Africa in four years to boost UK investment and trade with countries like Nigeria and Kenya.

“They can use the aid budget to sweeten some of those trade deals and to enable British interests or British businesses to be in a better position,” said Neil Thorns, director of advocacy at the Catholic Agency For Overseas Development.

In deals signed last month, Britain replicated the EU’s policy of giving poor countries like Fiji, Belize and Jamaica tariff-free access to UK markets for key exports like bananas and sugar to reduce poverty through trade.

But it is unclear whether such favorable terms would be diluted in the future.

“Britain has always maintained that Brexit would not lead to a worsening in the market access conditions of the poorest countries,” said Dirk Willem te Velde, ODI economics researcher.

“But that is still not 100 percent secure,” he said, adding that many deals have yet to be finalized.

No deal Brexit?

Aid groups in Britain, the second largest recipient of EU aid after France, are also anxious about losing EU funding, worth more than 350 million euros ($394 million) in 2016, according to Bond, a network of UK development agencies.

With a no-deal Brexit, charities could lose all of this funding, which would hit small agencies hardest and impact on overseas programs, said Claire Godfrey, Bond’s head of policy.

“Predictability is one of the most important aspects with aid,” said Godfrey.

“The programs that have the most long-lasting effects are those that have consistent investment in them, particularly if you’re talking about transformational change like gender empowerment, building up strong health and education systems.”

Aid minister Penny Mordaunt has said that charities will not lose out if Britain leaves without a deal, pledging to underwrite new programs run by British aid groups that are funded by the EU’s humanitarian agency.

Despite the uncertainty around Brexit, it offers Britain a fresh chance to lead on development, said Theodora Clarke, head of the Coalition for Global Prosperity, which brings together politicians, faith groups and businesses to tackle poverty.

“As the UK redefines its role in the world, we have the opportunity to really consider what sort of nation we want to be,” said Clarke, a former candidate for the Conservative party.

“We’ve seen time and time again that the British public care about the world’s poorest. And so I have no doubt that post-Brexit the UK will continue to remain a global, outward-looking and generous nation.” ($1 = 0.8877 euros) ($1 = 0.7649 pounds)

Reporting by Lin Taylor @linnytayls, Editing by Katy Migiro, Thomson Reuters Foundation