Brown poverty plan will cut aid, says WDM
-7/02/05
While UK chancellor Gordon Brown is being lauded by many church and development groups for his firm action to tackle global poverty and the debt crisis, a report from the respected World Development Movement (WDM) suggests that dramatic short-term aid provision will actually cut long-term aid by 108 million US dollars.
Gordon Brown has been trying to persuade other rich countries to back an ‘international finance facility’ (IFF) by bundling together future aid promises over 27 years to launch a bond so that increased funds can be released to fight global poverty.
But the WDM study says claims that the IFF will double aid spending are a ëpublic relations exercise’. Using UK treasury projections it tests the plan and shows a marked reduction of aid after the first twelve years of the programme because of interest payments on the bond.
“Borrowing from the future when you can afford it today is a mistake”, says Peter Hardstaff, head of policy at the World Development Movement and author of the study. “We support increases in the money available for development, but the IFF does not do this.”
WDM is calling instead for a direct increase in the aid budget and action to reach the UN target of 0.7 per cent of national income on aid sooner than “2013 at the earliest”.
The UK treasury says that IFF should be seen alongside other aid measures, not in isolation. But it has not yet responded to WDM’s critique of IFF in detail.
WDM was established out of an alliance of church and world poverty action groups in 1970 to highlight the need for justice in economic relations between the rich North and the global South. It seeks to influence government policy on international development.