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Beyond Europe: A Look At The Effect Of Brexit On International Development Policy

Ellisha Lindo (University of Warwick)

Following the 2016 referendum, British exit (Brexit) from the European Union (EU) has been anything but simplistic. The decision by the public to leave has cast some doubt over what role the UK will play on the world stage without its access to the many platforms that the EU provide. Concern has particularly been raised by members of the development sector, who fear what will happen to British commitments abroad in the form of Official Development Assistance (ODA) or overseas aid budget. Civil Society Organisations (CSOs) based in the UK, for example, receive a considerable amount of funding from the EU and in 2016 received a total of €357 million in EU aid. British exit, therefore, will likely cause a shortfall in funding which will affect UK development and humanitarian aid policy.

 

The UK also benefits from the broader reach of influence that the EU provides. Bond, an International Development Network, reported in 2017 that whilst the Department for International Development (DFID) maintained projects in 11 fragile states, the EU had presence in 43.  About 11 percent of the Department for International Development’s ODA is transferred via EU institutions.

 

EU development programmes too, stand much to lose from British exit from the Union. Brexit is predicated to leave a €11 billion dent in the EU budget resulting in possible reductions in EU aid allocations. This could be detrimental to ODA in general as the EU is the largest donor of aid in the world with the UK providing a considerable amount of this. In 2016 alone, the UK provided about 12 percent of EU institution’s ODA.

 

Concerns have also been raised over the UK government’s priorities and the means by which they will distribute overseas aid. The political climate that surrounded the referendum involved a fair amount of fearmongering that seemed to run contrary to the principles upon which developmental outreach is based upon. This shift in public support could have a knock-on-effect on the UK’s role in global development. For example, although Prime Minister Theresa May assured concerned groups that the annual target of the 0.7 percent on ODA will remain, the PM further stated that this amount would be reviewed so that “we are able to spend that money in the most effective way”. The full implications of this, however are yet to be seen, as development has been pushed down the agenda amongst the fallout after Brexit. However, there has been some indication over what will happen.

 

THE RESPONSE OF THE GOVERNMENT

With its commitment to follow through with the will of the people, the UK government has increasingly promoted Brexit as an opportunity for the UK to take a more central stance on the international stage by increasing its influence, particularly via bilateral aid. Bilateral ODA allows for the donor to have greater control over which specific programs or regions the aid goes through, and is currently how around 63 percent of the UK’s ODA is spent. With the desire to further promote the UK as a world leader, the government may increase that percentage. In 2016, for example, Syria received £352 million via bilateral aid. Alternatively, we could see an increase in the amount of bilateral partnerships with multilateral organisations other than the EU.

 

The government also seems to be attempting to assuage fears of complete break in relations with the European Union. Continued cooperation with the EU, at least during this period of negotiation, has been assured. Sarah Sanyahumbi, the head of Europe for DFID, at a Bond Conference earlier this year confirmed that until at least December 2020 the UK would be able to continue its access to EU development instruments. This would be funded via the multiannual financial framework (MFF), which allows for programs to continue even if the contract extends beyond 2020. These promises echo the guarantees of the Prime Minister made in Munich prior to this event, where she indicated a possibility for continued contribution based upon mutual interests.

 

However, although this may buy some time, a deadline still exists and unless the EU further develops its policy for non-member contributions, UK organisations have a time limit on their EU funded projects. All these assurances have done is somewhat smooth the fear over the transition process.

 

CRITICISMS AND CONCERNS

Despite the UK government’s efforts, concerns over the transition period and the official exit have continued. Although cooperation may continue, the EU has not offered it unconditionally. In January, the Union warned that should progress in projects made by aid organisations be insufficient, a “hard” Brexit would be initiated with funding being cut off as early as March 2019.

 

Although there appears to be agreement that the 0.7 percent target will continue to be perused, ODA allocation may be increasingly based upon national interest in the form of business investment, rather than development via poverty reduction programmes. CSOs and Non-Governmental Organisations (NGOs) are concerned that the trend towards redirecting ODA spending away from DFID, will be accelerated as the UK government seeks to utilise aid to secure trade deals and prioritise improving the business climate in light of Brexit. Whilst this can be a way to help with poverty reduction, it seems to be a method that benefits UK companies and businesses rather than the wider population. A House of Lords Committee on Brexit and ODA feel that this may detract from the fundamentals of humanitarian aid and instead advocate that poverty reduction should “always be the primary purpose of any UK aid spending”. Furthermore, CSOs have also raised concerns over the independent scrutiny that will be put in place to assure that Overseas aid is used appropriately (i.e. not too influenced by national interests). As well as trade-led development, commitments to national security and migration flows may also influence how the UK government handles aid.

 

MOVING FORWARD: SUGGESTIONS BY BOND

In a 2017 report on The impact of Brexit on the UK and EU international development and humanitarian policy,  Bond analysed the potential repercussions of this divorce and gave a set of suggestions that could allow for a smoother transition with as little disruption to international development organisations as possible. The report highlights the particular importance played by the UK in global environmental and climate change policies, stating that the UK’s influence in this field will likely be reduced with Brexit. Considering this potential decrease of influence in environmental and other areas of humanitarian policy, Bond suggests that a revision of co-financing rules in EU aid should also be part of future negotiation. By untying EU aid, non-EU member countries like Norway and post-Brexit UK would be able to co-finance EU development humanitarian programmes. This would provide a basis for a longer-term, joint-partnership in which the longevity and security of development programmes would be assured. Although this may not take place in the midst of Brexit, it is a consideration that should be taken seriously in light of it.

 

Considering some of the rhetoric prominent during the referendum campaign, however, public reactions to this may be negative. Continued financial support to any European Union organisation could be seen as a move contrary the UK’s movement towards ‘independence’. Even if some financial ties were to remain, the amount of ODA in the EU provided by the UK would still undoubtedly drop. Here Bond has suggested that the EU seek additional contributions from other member states, particularly those with smaller contributions to ODA who wish to increase their influence in development policy.

 

CONCLUSIONS

Although it is currently low on the political agenda, the impact of British exit from the European Union should be further examined.  British exit could result in a decrease of EU and British influence in ODA. British organisations, lacking the independent nature that EU standard frameworks provide, could be increasingly influenced by national interests. By doing this the government runs the risk of alienating solutions that could have a greater impact; a primary aim for development work. Meanwhile the EU will face a shortfall in its ODA budget. Though organisations such as Bond hope for continued cooperation, the possibility of a “hard” Brexit seems to continue to loom over this.

 

Whilst mainstream media focus is not on international development, it is an area that many are apprehensive about.  Official development assistance is not only critical for how the UK is perceived overseas, but also holds importance domestically. In 2014, an ODI report showed that in 2014 aid generated an increase in exports, resulting in a further increase in UK jobs. This is especially of importance not only for those already currently involved in the field, but for students seeking to find a future in it. For UK students hoping to find their way onto the international stage Brexit could, if not handled with care, prove to be an inhibitor rather than an enabler. If the UK wishes to ensure its future as an international leader, it needs to secure a deal to ensure younger generations can flourish.

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