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Should the UK maintain a foreign aid budget in times of austerity? Watch

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    (Original post by G8D)
    You really like to chat.

    How many countries that have received aid in the past have emerged as important or relevant trading partners? How 'long-term' is the long-term? The image of aid countries is that of moochers. If they can barely stand on their own two feet with aid, why should we continue to support that to our own detriment?
    All they need to emerge as is local powerhouses. For example Nigeria in West Africa has reaped the benefits of being an ex-colony of the UK. Through their cultural and trade links the UK therefore has a way into the market of the entirety of West Africa.

    And as we know, aid is just one way to invest in a developing country's economy. For example, lots of urban middle-class Nigerians probably come to the UK to study, benefit from a world-class education in a technical subject, and take their skills back to their home country. That is just as much "aid" as anything labelled "aid", despite not involving money.

    This stuff isn't something that has emerged subsequent to the modern division between developed and developing countries, and certainly not subsequent to some wishy-washy post-war liberal consensus. It has been going on since the first stirrings of settlement and civilisation: "historical" notions like vassal states, trade routes and tribute are literally no different from today's aid, economic sanctions, oil pipelines.

    Also, did you describe Britain buying things from itself by using 3rd world countries as agents? How is that beneficial? Why not just cut aid and improve the lives of people in our own country? Cut aid, reduce tax OR increase domestic tax expenditure.
    There are markets in third-world countries that don't exist at home.

    As a thought experiment, we know Nokia have expertise in making the finest brick phones in the world, known for their cheapness and durability. But no Finnish person these days is going to want to have a crappy old brick, and nor are any of Finland's usual trading partners in the Western world. We are now in a world of Androids and AMOLED screens, whatever they are.

    So what are Nokia going to do with all the old plastic moulds, electronic components, materials etc etc for which they spent time drawing up cheap and assured procurement contracts just ten years ago? And for that matter the skills and expertise that went into the design? They're not just going to junk all that if they can help it.

    Happily, there is a market where brick phones are all the rage, and where customers value cheapness and durability over whether you have a 16 megapixel camera and a gyroscope to count how many steps you do in a day. And that is in developing countries. So Nokia will enter into a deal, involving the Finnish government as well, where they provide the mobile hardware retailers of developing country with something it needs (which may be in the form of direct aid) in return for guarantees on large orders of 3310s.

    Nokia shores itself up with a secure revenue stream, from which the Finnish government gets the sales tax (and the favourable GDP/employment figures, whence re-election), from which the Finnish government pays aid to the other country. And if capitalism is working as it should, technological advances diffuse out and slowly lift the population out of poverty, at least in respect of their communications infrastructure (which is actually important enough to define in terms of "poverty" in my view). With shrewd investment in the right areas the country can then hope to become a regional powerhouse.
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      Aid is nothing more than a political tool. If these governments really cared about foreign aid, they would make sure the money is going into the right hands.
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      (Original post by TheEssence)
      Aid is nothing more than a political tool. If these governments really cared about foreign aid, they would make sure the money is going into the right hands.
      Also some economists argue that the country being given aid can also be misled from internal growth, as they become too reliant on the aid given; for example it has been seen to delay the development of business in Africa, modern business. It has kept Africa behind in terms of getting the confidence and experience they need to take part fully in the global economy and create businesses that both compete and succeed on an international scale. Aid has distorted markets in Africa. Some argue the sooner Africa can “graduate” from its dependence on aid, the better. If this is the case it’s seen as giving the aid is a waste of expenditure which could’ve been used to tackle the evolving internal affairs, such as the high rate of unemployment (now approx 6.8% iirc) or reducing the budget deficit.

      You're quite right in that foreign countries have been known to waste the foreign aid investment, as usually elected leaders are put in charge on how the funding is utilised. These corrupted governments may use the money for personal gains rather than the development of their nation and the social benefit of the recipient country. Although, admittedly, do you think 0.56% of our national income should be given purely for non self-serving purposes?
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        (Original post by Abdul-Karim)
        Also some economists argue that the country being given aid can also be misled from internal growth, as they become too reliant on the aid given; for example it has been seen to delay the development of business in Africa, modern business. It has kept Africa behind in terms of getting the confidence and experience they need to take part fully in the global economy and create businesses that both compete and succeed on an international scale. Aid has distorted markets in Africa. Some argue the sooner Africa can “graduate” from its dependence on aid, the better. If this is the case it’s seen as giving the aid is a waste of expenditure which could’ve been used to tackle the evolving internal affairs, such as the high rate of unemployment (now approx 6.8% iirc) or reducing the budget deficit.

        You're quite right in that foreign countries have been known to waste the foreign aid investment, as usually elected leaders are put in charge on how the funding is utilised. These corrupted governments may use the money for personal gains rather than the development of their nation and the social benefit of the recipient country. Although, admittedly, do you think 0.56% of our national income should be given purely for non self-serving purposes?
        I agree, the old proverbial tale of teaching the man how to fish is all too applicable here. Not to sound like a conspiracy theorist, but keeping certain countries in certain regions of the world poor and reliant is ideal for strong western powers. Cheaper natural resources and less competition in more developed goods and services. In a capitalist system there must be people at the bottom for there to be people at the top, same with countries too.

        Yes corrupt politicians are all too happy to line their pockets, and this makes them more likely to sanction deals with multi-national corporations.
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        India had stated many times before the aid to them was ended that it neither needed nor wanted the foreign aid money. The money that Britain gives to India is peanuts in comparison to their spending nothing more than an attempt to gain some favour in trade deals or other things that might benefit Britain in the future, an investment of sorts.

        I highly suspect that the announcement of the statue of Ghandi in Parliament Square nicely coinciding with Osborne's visit to India is nothing more than a shallow attempt to curry some favour later on.

        Foreign aid should be given out to countries who actually need the aid, not as bargaining chips or attempts at bribery.
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        (Original post by Abdul-Karim)
        I think although there is much controversial debate on the subject we should take into account that there are numerous forms of aid, from humanitarian emergency assistance, to food aid, military assistance, etc.. A number of factors come in to play when considering to whom and how much aid is distributed to. Many people have a misconception on the objectives of giving out aid and do not realise that the foreign aid programme isn’t just about giving away money to other countries to do as they please; but objectives include creating a sense of stability to less economically developed country in aims to achieve long-run domestic benefit. For instance increasing exports and gaining political influences within foreign nations; also in helping reduce global inequality and raising living standard

        I see your point. However the argument which arises through the question posed is whether the benefits of giving out foreign aid exceeds the social costs to society, especially in a time where the UK has seen a double dip recession and has witnessed a state of economic instability. While the UK government is making cutbacks, it is unclear as to why there’s an increase in foreign aid investment. There are however many benefits for both the global and UK economy. Conditions (As Alex-Torres suggested) can be made to the country aided in whereby they must import capital equipment or services from the UK, which helps domestic suppliers and has a multiplier effect for increasing our national output in hopes of export led growth, however the chances of this happening from a less economically developed country with minimalistic funding is very unlikely in the short-term. However through investing in foreign countries, they may be able to better their own economy through their increased spending in education and training to increase their own national output and raise standards of living. This helps with tackling global inequality and to better the quality of life. The initial aid investment could have great benefits for instance the UK could gain a potential trading partner. The long-term benefits outweigh the short-term costs given the recipient country is developing.
        cheers for the education

        but whats your opinion haha

        yes no
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        (Original post by trustmeimlying1)
        cheers for the education

        but whats your opinion haha

        yes no
        Entirely situational, it’s definitely quite clear there are both advantages and disadvantages in the overseas aid programme. The benefits include a higher standard of living for recipient countries, increased exports through the use of tied aid, possible political influence in recipient countries. Although the concerns are that the UK hasn’t the welfare in our economic state to freely give such funding to those countries, and the opportunity cost is that of endogenous economic growth could be achieved. Also there’s the threat of any development priority the UK has is not achieved and the funding or capital isn’t used efficiently enough to see any real improvements of the recipient countries welfare.

        In hindsight it’s my belief that it is in the UK’s best interest in not taking such risk with investing in overseas aid, especially in current economic conditions. Other more important targets should be achieved in order to ensure domestic growth. Such through the use of tackling high unemployment and investing in our own economy for sustainable development, or to subsidise our own industries to compete in global markets for export led growth, and return to a point where there is a budget surplus; or at least more confidence in the future of UK economy before pursuing other external objectives.

        If not that, we could at least cut down on expenditure. An article (I forgot the source) suggested that figures show that the UK has spent a larger proportion of national income on foreign aid than any other G8 member nation, it is estimated that “0.56% of UK national income has been spent on foreign aid compared to 0.19% in the US” so you can see the controversy. Tax payers are complaining about how their money is being spent, as the governments objectives should be to act in the best interest of their citizens. Britain's foreign aid budget is still seen to be rising whereas hospital accident and emergency departments, libraries and other public services are being cut back or closed.

        This is all very generic, if more specified circumstances were to be provided, a more detailed analysis would be made. I haven't too deep a knowledge on the specifics of our aid budget so I'm basing assumptions on my own basic understanding of international politics.
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        (Original post by Alex-Torres)
        Very little aid is actually just money we give out for free. A lot of it is 'conditional' or 'tied' - this usually means that with the money they have to spend it on British goods,or similar conditions that benefit us in some way.
        If the British taxpayer gives a country £10mill to buy British goods of £10mill, it has still given a net £10 million of assets to the country.
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        (Original post by Abdul-Karim)
        Entirely situational, it’s definitely quite clear there are both advantages and disadvantages in the overseas aid programme. The benefits include a higher standard of living for recipient countries, increased exports through the use of tied aid, possible political influence in recipient countries. Although the concerns are that the UK hasn’t the welfare in our economic state to freely give such funding to those countries, and the opportunity cost is that of endogenous economic growth could be achieved. Also there’s the threat of any development priority the UK has is not achieved and the funding or capital isn’t used efficiently enough to see any real improvements of the recipient countries welfare.

        In hindsight it’s my belief that it is in the UK’s best interest in not taking such risk with investing in overseas aid, especially in current economic conditions. Other more important targets should be achieved in order to ensure domestic growth. Such through the use of tackling high unemployment and investing in our own economy for sustainable development, or to subsidise our own industries to compete in global markets for export led growth, and return to a point where there is a budget surplus; or at least more confidence in the future of UK economy before pursuing other external objectives.

        If not that, we could at least cut down on expenditure. An article (I forgot the source) suggested that figures show that the UK has spent a larger proportion of national income on foreign aid than any other G8 member nation, it is estimated that “0.56% of UK national income has been spent on foreign aid compared to 0.19% in the US” so you can see the controversy. Tax payers are complaining about how their money is being spent, as the governments objectives should be to act in the best interest of their citizens. Britain's foreign aid budget is still seen to be rising whereas hospital accident and emergency departments, libraries and other public services are being cut back or closed.

        This is all very generic, if more specified circumstances were to be provided, a more detailed analysis would be made. I haven't too deep a knowledge on the specifics of our aid budget so I'm basing assumptions on my own basic understanding of international politics.
        indeed everythings relative too

        you can give less but have more of an impact if you do it right

        Ireland I believe gives the most foreign aid per percentage in europe
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        (Original post by Abdul-Karim)
        What are your thoughts and justifications?
        In principal I support a reduced tax burden and don't believe we have any obligation to provide aid to other countries. As such withdrawing from the treaty obligating us is attractive.

        Thinking pragmatically though, we would need some money for humanitarian so the budget could not be abolished completely anyway. In addition, keeping the foreign aid budget protected can aid in forcing deeper cuts onto health and welfare which are the departments which really need curtailing.

        Pragmati
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        (Original post by Alfissti)
        I have no problems with it but do believe that it should be better managed and used more effectively with better returns in mind.
        This sums it up succinctly.

        We made a promise to give 0.7% of GNI, and we should live to that promise. But we should also make sure that money isn't being used for political reasons by the British government, or similarly wasted in the recipient countries.

        I know extremely little about the activities of the DfID but I'd like to know more. Surely they have Select Committees/other sorts of watchdogs in place?
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        I'm all in favour of giving aid to countries which genuinely need it. It only costs a tiny percentage of our budget but can make a difference to some poor countries if spent properly.

        But only if the money can be delivered to where it is needed, and bypass any corruption. Aid should go to where it is needed, not to private bank accounts of politicians. I think we stopped aid to Uganda because of money going missing.
       
       
       
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