Jessica Espey: Smart aid policies mean we can conquer age-old evils, to all our benefit

The first piece in ConHome's UK Aid series is written by Jess Espey, Senior Research and Policy Adviser at Save the Children UK. You can follow Jess on Twitter here.

Thirteen years ago world leaders made the bold and ambitious pledge to work towards eradicating global poverty, hunger and disease by 2015. There can be no doubt that these Millennium Development Goals were one of the most powerful and unifying agreements in political history.

As the deadline looms, there is still more to be done to achieve the far reaching promises, but largely they have been incredibly successful. Through global cooperation we have lifted 600 million people out of poverty and helped 56 million more children go to school; while 14,000 fewer children under the age of 5 now die each day than did in 1990?

These are the very real results of the commitment, dedication and focus of governments, charities, faith groups and businesses across the world.

The Secret Success of Smart Aid

We know that economic growth and political leadership have been key drivers of development progress in recent years. However we also know that smartly invested aid has been a secret success story.

For example, immunisation coverage for six major vaccine preventable diseases – pertussis, childhood tuberculosis, tetanus, polio, measles and diphtheria – has risen significantly since the World Health Organization (WHO) began its Programme on Immunisation in 1974.

At the time, only 5 per cent of the world’s children were immunised against the six key vaccine-preventable diseases. By 2010, DTP3 (three doses of vaccinations against diphtheria, tetanus and polio) coverage in the first year of life was estimated at 85 per cent. Polio is on the verge of eradication. Meanwhile deaths from measles, a major killer of children under five, fell by 78 per cent worldwide and by 92 per cent in sub-Saharan Africa between 2000 and 2008.

WHO and UNICEF have been major funders of national immunisation programmes, and since the formation in 2000 of the GAVI Alliance, global health partnership of public and private sector organizations, substantially larger donor funds have been mobilised. These funds have enabled the introduction of new vaccines and increased coverage of longer-standing vaccination programmes. The UK is a key supporter of GAVI ; and over a five year period our commitment will vaccinate one child every two seconds, immunising 80 million children in all and saving 1.4 million lives.

Thanks to the continued generosity of the UK public, and the leadership of the government, our aid is putting the world on the cusp of major breakthroughs. To capitalise on this progress Save the Children believes that we should build on the strengths of the MDGs while also addressing the structural drivers of poverty and deprivation such as the quality of governance, whether people can voice their concerns and needs, whether there is accountability and transparency, as well as how countries can tackle forms of rising inequality.

Looking at these structural drivers will help to build the systems of effective governance and to help developing countries to stand on their own two feet. As some of Britain’s top business leaders said recently, there are huge benefits to the UK of developing countries becoming strong emerging economies and engines of future global growth and prosperity.

Sometimes this will mean using our aid to support the conditions in which growth can occur. Our aid has contributed to improving education, health, sanitation and other public services in many of the world’s poorest countries. This investment in human capital is fundamental for a functioning economy.

We should also, however, be providing assistance to improve governance. The UK’s Department for International Development is already taking positive steps in this direction. The governance portfolio (an average 17 per cent of expenditure) is improving public financial management, including tax capacity, strengthening civil society, supporting decentralisation and local government and bolstering national mechanisms for conflict prevention and resolution. The review, two years ago, of DFID’s Governance work highlighted a number of impressive results, for example in Nigeria DFID has helped to recover or freeze £163m of corruptly obtained assets and to secure the UK’s first conviction for foreign bribery, dramatically increasing available public revenues.

UK Aid for the 21^st Century

 This kind of approach can help us respond to a changing world. The distribution of poverty, for example, is fundamentally different from when the last set of global poverty goals were set. New estimates show that three-quarters of the world’s approximately 1.3bn people living in income poverty now do so in middle-income countries (MICs), whereas in 1990, 93% of this group lived in low-income countries (LICs). One study estimated that 8 Indian states have more poor people than the 26 poorest African nations combined. Fragile States are also a more pressing concern – as the last decade has seen economic and food crises, conflict and climate change increasing vulnerability of some of the world’s poorest children. It is now estimated that by 2015, half of the world’s people surviving on less than 1.25 dollars a day will be found in fragile states.

To respond to this changing global context we need a new approaches to tackle poverty. What is certain is that aid is becoming less and less central to development, whilst trade and investment between developing countries, remittance flows, South-South cooperation, philanthropy, as well as non-concessional finance like equity and debt are becoming more prominent. We therefore need to ensure it continues to be spent well.

Save the Children believes the UK can do three critically important things with its aid going forward:

First, maintain a strong focus on conflict affected fragile states which continue to be heavily aid dependent. Not only is it a moral imperative because of the number of poor people living in these contexts, but it is of strategic interest. Fragile regions are some of the most difficult to do development in as they are more vulnerable to shocks (internal and external), and in turn they are particularly susceptible to instability, with potential consequences beyond their borders. But our support therefore plays a vital role providing essential services, strengthening local institutions, and promoting social cohesion. 

In addition, according to the OECD, aid remains the biggest financial flow in fragile states, followed by remittances, as fragile states do not benefit from much foreign direct investment. Unfortunately about half of fragile states are expected to see a drop in programmable aid between 2012 and 2015. This is of particular concern in countries that are chronically “under-aided”, aid dependent or facing slow economic growth.

Second, DFID can focus on strengthening the catalytic impact of aid, by using it to support the building of effective public systems, as it is doing for example in India, providing technical assistance with the state governments (in Bihar, Madhya Pradesh, Orissa and Uttar Pradesh) to improve the entire health system, including staffing, medicine and infrastructure. It should also use aid to strengthen tax collection capacity, which can help developing countries co-finance and eventually, fully finance their own development.

The importance of strong taxation systems was highlighted at the recent G8 Summit where leaders recognized taxation to be crucial to effective, capable states and “essential to fairness and prosperity for all. Nevertheless, many developing countries struggle to collect domestic revenue as a result of poor quality tax policies and tax administration, limited technical capacity, the challenges of taxing the informal sector, high dependence upon but poor management of natural resources, poor transparency in the international economic architecture and illicit financial flows.

Third, DFID could reevaluate its recent approach towards middle-income countries.  Given increasing domestic revenue in these countries, many have argued for donors to increase the proportion of aid going to poorer countries by reducing aid to MICs.

Indeed, the UK cut aid to emerging economies by about a quarter in 2011. But there are a number of reasons to continue providing support to MICS.  These include the fact that about three-quarters of the world’s poorest people (933 million people) live in MICs. Second, MICs are not only important in themselves, but also for the countries close to them, acting as regional hubs or ‘poles of development at the regional level’. Third, many MICs, especially the largest ones, are vital to achieving global public goods. They are important actors in the prevention of global public ‘bads’ from financial crises and global health pandemics.

DFID should therefore commit to maintain support to MICS with high burdens of poverty, but should diversify its approach, using a variety of channels including grant aid, but also technical cooperation, loans, and blended projects. Going forward ‘aid has a role to support attempts to respond to the specific problems and priorities of MICs, not as a large source of development finance, but as a strategic catalyst for change and consolidation of progress. The key is to focus not so much on what the money buys, but on what incentives it creates.

As 2015 approaches, we should feel a profound sense of opportunity. In the year 2000, the international community committed to dramatic change. We made the world’s biggest promise to its poorest people that we would tackle absolute poverty, child mortality, hunger – and that promise is only partially fulfilled. We need to renew and extend the promise and develop new approaches to help realise it.

For the first time in human history it is conceivable that within a generation we could end preventable child deaths, eradicate hunger and rid the world for good of the scandal of absolute poverty. But to do so will take more than business as usual; it will require a resolute focus not on the easy to reach, but on the hardest to help. It will require smart investments of British aid, and a focus on some of the most pervasive and intractable development challenges.

If we are willing to take up the challenge, then we can be the generation to end these age-old injustices for good.