Weekly Blog - 1 March 2025 - Overseas Aid Cuts
Considering the implications of recent cuts to overseas aid, and reminding ourselves of just how important aid is.
Overseas Aid Cuts
This Tuesday 25 February the UK Prime Minister Keir Starmer announced a huge cut to the UK’s overseas aid budget from 0.5% of GNI to 0.3% to help pay for a rapid scale up in defence spending. It is a move which is part of a wider pattern of retreat from overseas aid by developed nations that is having a massive and devastating impact on millions of lives. Most notably, in coming to power in the US the Trump Administration unleashed Elon Musk’s new Department of Government Efficiency (DOGE) onto the US Agency for International Development (USAID). Immediate stop work orders were issued and funding was widely suspended. After weeks of legal wrangling the Trump Administration this week confirmed it will be closing 90% of USAID’s work, a cut of $60 billion in overseas aid. The US was previously by far the world’s largest overseas aid donor. This cut represents more than a quarter of global aid flows. But the US and UK are not alone. In recent months the Netherlands announced a cut of 8 billion Euros, the EU a cut of 2 billion, Germany 2 billion, France 1 billion, and Finland, Switzerland and Norway have all also recently announced overseas aid cuts.
The cuts are being made for a variety of reasons as widespread difficult economic circumstances mean that domestic budgets come under extreme pressure in developed nations across the world. In the UK the cut, which amounts to around £5.5 billion per year by 2027, has been made in order to urgently scale up defence budgets, following the realisation that the US is no longer prepared to guarantee Europe’s security against Russia. It is widely recognised that defence budgets do need to be scaled up rapidly. And indeed Arise has long called for this, in our major research report the Arise Manifesto (Arise Manifesto, pg 89, 126) and in repeated blogs on Europe’s Security, Preventing and De-escalating Wars and Military Spending. However, there are many other options for where that money could come from, apart from a raid on overseas aid. Wealth and fossil fuel taxation; scaling up efforts to collect tax already owing, but not currently being paid; using frozen Russian assets; a wider look at the budgets across government; and driving down welfare costs have all been raised as options in the last week, alongside many others. In the Arise Manifesto (Arise Manifesto, pg 172 – 204)and a previous blog on Policies that Raise Funds we suggest many areas where governments could save money and indeed generate extra money to fund this kind of military investment. Certainly the UK’s recent International Development Minister Anneliese Dodds thinks there were much better ways to do this than cutting aid. She resigned in protest on Friday 28 February.
These widespread cuts to global aid will have very real consequences for the world’s poorest people. Tens of millions will fall into extreme poverty, go hungry, no longer have access to life-saving healthcare, be deprived of safe clean water and sanitation, not be vaccinated, no longer receive a proper education and die in humanitarian disasters. It has been estimated that the USAID cuts alone will drive an extra 5.7 million people into poverty in Africa. In this difficult and challenging time Arise will keep praying and calling for the importance of international aid, and scaling it back up to the internationally agreed minimum level of 0.7% of GNI. As we do this let us remind ourselves of just why aid is so important, and the crucial role it should play, alongside other interventions, to lift nations out of poverty.
Ending poverty
As Christians we know that God abhors poverty and wants to see everyone, everywhere lifted out of the misery of extreme poverty. We read in the Old Testament that when God’s people entered the Holy Land they were instructed, “If anyone is poor among your fellow Israelites in any of the towns of the land the LORD your God is giving you, do not be hardhearted or tightfisted towards them. Rather be openhanded and freely lend them whatever they need … Give generously to them and do so without a grudging heart … be openhanded toward your fellow Israelites who are poor and needy in your land” (Deut 15: 4 – 11). Later in the New Testament, the only injunction the apostles laid on Paul when he went out to preach the gospel was that he “should continue to remember the poor, the very thing I had been eager to do all along” (Gal 2: 10).
All nations that have developed successfully and lifted themselves permanently out of poverty have done so though their own efforts, by developing a thriving national economy, and then taxing a proportion of it to fund social spending on essential services like education and healthcare, which help all their citizens. Helping this process to happen faster, more effectively and in an environmentally sustainable way is the focus of Arise’s 4 Shifts Campaign. However, whilst they are going through this process, the international community can play a crucial role in helping to fill the gap by the generous provision of overseas aid to provide basic services and meet immediate development needs, until developing nations reach a stage where they can fully fund these themselves.
Overseas Aid
Overseas aid has been used to provide healthcare, education, clean water and sanitation, emergency relief, crucial infrastructure and multiple other things. To take just one example, the World Health Organisation reports the story of Wezzie Phiri, a health worker in a rural community on the outskirts of Lilongwe, Malawi. Malaria vaccinations in her region have been funded through overseas aid. Since vaccinations were introduced she reports, “It has been very helpful for the community and the facility. Since most of the parents are able to take their children to receive the malaria vaccine, the number of children who get sick with malaria and come here to the health center has really reduced.” She adds, “I have 2 girls. The 1st one, she never received the vaccine. But with my little one, she finished the 4 doses and I can see the difference. With the older one, it used to be a struggle, because every 2 months she used to get sick with malaria. But with the little one, she has finished all the vaccines and it has been good.” [1]
Aid should be delivered at the internationally agreed level of 0.7% of Gross National Income from all developed nations. As Jeffrey Sachs explains in his book The Age of Sustainable Development, “the UN General Assembly in 1970 formally adopted the goal that high-income countries should contribute 0.7 percent of their national income to ODA [Official Development Assistance].” Of course, “Aid is not a permanent need or solution. Countries that receive aid can reach a level of income through economic growth whereby they soon ‘graduate’ from the need for aid entirely. China and Korea are two examples of countries that relied on aid when they were poor and then graduated from aid and indeed more recently became significant donor countries. Roughly speaking, graduation from aid can occur when a country passes from low-income to middle-income status.” But until countries reach that point “aid can work” and indeed it is “vital when people are very poor and facing life-or-death challenges, such as malaria, AIDS, safe childbirth, safe water, sanitation, or growing enough food to stay alive.” [2]
Aid should be provided for the sole aim of poverty reduction. It should be focused on the poorest and should not discriminate on the basis of ethnicity, religion, gender, age or in any other way. It should not be ‘tied’ or linked in any way to supporting developed country exports or foreign policy. All aid should be harmonised and coordinated by the national government when it comes into a developing nation, behind a single national development plan. This should be nationally developed and owned, with significant input from poor communities who are directly affected. As far as possible, all aid should be channelled into national budgets and spent by the national government to make it efficient and help reinforce and strengthen the national authorities in their legitimate role. Where concerns about corruption and good governance are so great that they cannot be addressed through rigorous monitoring, then the international community may choose to deliver aid into a nation via alternative routes, such as UN agencies or Non-Governmental Organisations (NGOs) operating in the field. In which case a lead agency should be identified to play the coordinating role the government would normally play, and to liaise with the national government until the situation has improved and aid can be transferred to be channelled through the national finances. These are all principles until recently widely held by the international community. Aid should come in the form of grants not loans to avoid saddling poor countries with future debt crises. Aid commitments should be stable, consistent and committed over multiple years, not short-term ‘stop and start’, to help with financial planning. All aid should be fully transparent, rigorously monitored and independently evaluated and scrutinised to prevent corruption and for effective impact (Arise Manifesto, pg 200 – 203).
Conclusion
Finally, as we have seen, aid should only ever be seen as short-term. It plays a crucial role in meeting an immediate need, but it is no substitution for developing nations building strong and fair economies and taxing them in order to redistribute and meet the basic needs of the poorest. No nation in the world has ever developed as a result of aid alone. Therefore, a sliding scale of phasing down and graduating from aid when it is no longer needed should be in place for all nations. In this way developed and developing nations can work together in partnership to use overseas aid effectively, as part of a wider plan for development. Something that is good for the poorest, and for all of us. The world must reverse the trend of recent tragic aid cuts and get back on the right path, using aid effectively, in the right way, as part of this wider picture of international development.
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[1] Mothers in Malawi value the first malaria vaccine, WHO, (14 Apr 2023), https://www.who.int/news-room/feature-stories/detail/mothers-in-malawi-value-the-first-malaria-vaccine
[2] Sachs, J., The Age of Sustainable Development, (2015), pg 172, 501