UK ministers reported yesterday that they will cut foreign aid to 16 countries.
The irony of this decision is almost too much to bear.
It appears that the UK is cutting aid in an attempt to cut national spending. Harriet Harman explained to BBC that it’s in the “national interest” of the U.K. to reform their aid spending. She said,
I know it’s difficult when people are feeling the pinch here at home but we have to remember that with just a very small amount of money we can save lives in the developing world.
President Obama has supported a similar ideology, by reassuring Americans that extending aid to developing countries is in the U.S.’ “national interest”.
But is there actually any proof that aid money has been directly responsible for saving lives in developing countries?
If the UK is anything like the United States, cutting aid won’t do much for the deficit. Aid is roughly 1% of the U.S. national budget. Sure it may sound good to cut aid, but it won’t do much to improve the economy. Like my former professor Bryan Caplan once said at a student conference,
You might as well cut back on the amount of chewing gum people purchase.
BBC reports, “Five countries will have their budgets increased substantially.” If the goal is to cut spending, wouldn’t they stop foreign aid altogether? It seems like the decreases and increases are just cancelling each other out and the British economy is back to square one.
David Loyn of BBC explained the political and economic rationale behind the new aid plans. He wrote that Britain “wants to ensure that it is getting value for money”. Economist William Easterly has proven that there is no correlation between economic growth and foreign aid. Dambisa Moyo has even shown that aid does more harm than good! Is that really value for your money, Britain?
The choice in aid recipients is quite ironic as well. The UK will end its aid to China but not India. Last I checked, both of these nations were labeled rising economies. They’re developing so rapidly that they may one day exceed the United States as a superpower. Since we live in a global economy, these rising competitors could affect the U.S. economy as well.
When it comes to foreign aid, the UK is adopting a parenting role and is raising its competitors. Imagine you’re a business and you’re going bankrupt while the competing firm next to you is a booming business. You would never invest in your competitor when your own finances aren’t in tact, right?