How to end foreign aid and avoid a punch-up

May 6, 2013 6 By admin

An edited version of this piece appeared on the Guardian’s Comment is Free site on Saturday

The spat between South Africa and Britain over ending its (very small) aid programme has sparked another round of debate about whether British aidend-is-near-cartoonshould be going to middle income countries (the last round was over aid to India, which seems to particularly rile the Daily Mail).

But whatever the rights and wrongs of ending aid to South Africa (whose economy is growing slowly, but with sky high levels of inequality and 10 per cent of all the world’s people living with HIV and Aids), aid agencies are inevitably going to have to shift money around as the world changes. Countries rise and fall, aid priorities change and new opportunities (like the opening up of Myanmar) will arise, to which aid should of course respond.

That churning process is accelerating as more and more countries reduce their dependence on aid thanks to economic growth, rising revenues from oil and gas and surging remittances from their migrant workers overseas. Those upward curves contrast with falling aid volumes.  Total global aid flows have been falling for the last two years as, with the sole glorious exception of the UK, the ‘Austerians’ in what are sometimes known as ‘the formerly rich countries’ take the axe to aid spending.

What’s more, many developing country governments can’t wait to end aid – it affronts the dignity of the Big Men (as they usually are) in charge to be seen as asking for handouts. As two Ugandan ministers once proudly told me ‘when 60% of our revenues came from aid, we had to go to the World Bank on both knees. Now we’ve got it down to 30%.’ (Unfortunately, I blew it by joking ‘ah, so do you just go on one knee now, then?’ They were not amused.)

So the issue is not whether aid partnerships sometimes have to end, but how. Oxfam has some ideas on that – several pages of guidelines on ‘exit planning’ in fact. They are about ending funding to particular grassroots organisations, but they offer useful lessons for DFID and others contemplating exits from entire countries. Talk to the partner from the outset, help them fill any organisational gaps and weaknesses before you go; agree (don’t impose) a clear timetable for phasing out funding and crucially, agree what kind of relationship you want once the cash tap has been turned off. Because as one Oxfam partner from Pakistan put it, ‘We want to be treated as a “relationship” and not just as a “partner”’. Partnerships are for projects, but relationships go beyond that. We should have a relationship in the future, even if there is no project money.’‘ Sadly, the unpleasantness over DFID’s exit from South Africa means that remaining relationship has got off to a rocky start.

SA Pres demonstrates what he'd like to do to DFID

SA Pres demonstrates what he'd like to do to DFID

I imagine DFID has similar guidelines, but those can’t legislate for ministers shooting from the hip (or if conspiracy theorists are to be believed, throwing a bone to the Tory right ahead of local elections last week). Still, if civil servants in the land of ‘Yes Minister’ can’t manage their political masters, what are we coming to?

Joking aside, this matters. Aid agencies need a clear understanding of what constitutes a responsible exit. After all, aid should bequeath a legacy of trust and friendship between the UK and the rising powers of Africa and Asia, (who incidentally, we are going to need in future), but in this case that legacy has been (temporarily, I hope) squandered. Ending the aid relationship should be a moment of mutual celebration, not public mud-slinging.

Update: and here’s a new report on the subject of responsible exit