Britain’s International Development Policies: A History of by Barrie Ireton (auth.)

By Barrie Ireton (auth.)

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Additional resources for Britain’s International Development Policies: A History of DFID and Overseas Aid

Sample text

Debt servicing as a percentage of exports for developing countries was on average about 15 per cent – a modest level by the standards of the 1980s and 1990s, but at the time seen as serious. But with the increased use of commercial credits, the relatively hard terms of much bilateral aid, and increasing multilateral aid loans a future problem could be foreseen, particularly if standards of economic management declined. As a response to this the Department decided to soften its own terms of aid.

Giving greater weight to political and commercial considerations meant continuing to focus on the Commonwealth; reducing the potential impact on bilateral aid of a cut in the overall aid budget by looking critically at new multilateral aid commitments; and maintaining the real value of the ATP so, as a consequence, it was accepted that its share of total bilateral aid would increase. The statement promised to maintain a substantial aid programme, despite the plans to reduce it. The reaction in Parliament to the statement was expectedly mixed, but Dame Judith Hart suggested that it ‘basically endorses the aid strategy of the Labour Government’ and congratulated the Foreign Secretary and others for ‘their powers of persuasion and influence on their free market, monetarist and anti-aid colleagues at a crucial point’.

Indeed some poor countries which were heavily dependent upon British aid, and which saw the Department as the ‘donor of last resort’ for a range of necessary capital expenditures, pleaded for it not to be so exclusive. The Department’s Mission: 1964–2013 43 The White Paper was also surprisingly cautious in its statements on aid-tying and the provision of aid for local costs, particularly in the context of a rural development initiative. In Chapter III it acknowledged that such programmes involved a high proportion of local costs but in paragraph 9 was only able to say that the Department was ‘ready to consider allowing in exceptional circumstances a limited part of our financial aid to meet local costs of individual projects’.

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