UK secures change to international aid rules

The UK has secured a significant change to the international aid rules which would allow high-income countries, which experience economic shocks, caused by crises and natural disasters, to apply to receive ODA.

It comes after the UK was the driving force for change when many Caribbean islands, including some British Overseas Territories, were left devastated by two category five hurricanes in autumn 2017, Irma and Maria.

At the time, there was no system in place for such countries to automatically requalify for aid if their economies were badly hit in such circumstances. Countries would only requalify for aid if their economies were so badly hit, their economies dipped under the World Bank High-Income threshold.

Because of the UK’s campaign for change, the Development Assistance Committee (DAC), which is made up of 30 leading donor nations, has agreed a new ‘reverse-graduation’ mechanism.

This means countries that have graduated from being eligible for aid will now be able to receive assistance if their economies worsen and fall below the World Bank threshold.

Such countries would be eligible for aid related to long-term economic recovery and reconstruction, rather than humanitarian assistance.

“The British public are strong supporters of providing help in the wake of disasters, including long-term reconstruction. They want to help people, especially when they are from nations we have close ties to. Not being able to pay for that help from the aid budget, because a nation’s economy was doing well, before a hurricane, earthquake or other disaster hit, was illogical and had to change. Britain has never fallen short in our support of countries in need – either through sending aid, our Armed Forces or reconstruction support. This significant rule change means that in future we may be able to use our aid budget to pay for that longer term, reconstruction support,” said International Development Secretary Penny Mordaunt.

The UK government has always been clear that in times of crisis, nothing will hold us back from helping the British territories. The ODA rules have not and will not hamper the UK’s response to humanitarian crises. The new mechanism could help protect a country’s hard-fought development gains and prevent it from slipping into long-term economic decline due to severe natural disasters in the future.

Original source: DFID
Published on 1 November 2018