DfID’s New Strategy Champions Aid for Trade

This week DfID launched its new ‘Economic development strategy – prosperity, poverty and meeting global challenges’. The heavy focus on trade, job creation and the expansion of local industry in developing countries was unsurprising given Secretary of State Priti Patel’s statements since her appointment. It nevertheless underscores the strength of her Department’s commitment in following this direction.

 

The release was timed with her visit to Ethiopia, enabling Patel to begin to push back against the wave of media criticism over DfID’s use of the £12 billion aid budget in recent weeks.

 

The message emanating from both Patel’s trip and the strategy document itself was loud and clear: DfID is now squarely focused on driving economic development, not only to ensure jobs and livelihoods are created for the millions of young people growing up in fragile and developing countries, but also so the UK can benefit. While Trump is far from alone in fuelling sentiment that globalisation has not benefitted the majority and espousing scepticism regarding international trade deals, here Britain is saying that free trade remains the fundamental answer to poverty and that globalisation can be made to work for all and even achieve the Sustainable Development Goals.

 

The strategy reiterates the close relationship that is intended between the Department and Fox’s Department for International Trade, particularly as the UK looks to pave the way to secure new trade deals post-Brexit. It also stresses the importance of the role of private investment, something which has attracted increased criticism since the funding ceiling for CDC was increased last year. The Department argues that CDC’s investments have delivered, creating over a million jobs in Africa and South Asia in 2015 and its investee companies paying out more than US$2.6 billion in taxes locally.

 

Having often shied away from talking explicitly about the national benefits derived from aid spending in the past, under Patel the Department is shifting tack and making the link much clearer. Beyond any question of moral obligation, references have been made to security, reducing migratory pressures and the benefit to British businesses as a result of increased trade with our aid partners.

 

While there are those that would characterise this a significant shift, in reality UK support for Aid for Trade is nothing new and has been growing gradually over the years. It has also become a mainstay among European donors including Sweden, Finland, Belgium and the Netherlands.


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