Britain's aid largesse causes concern at home

Hands seeking help

Kai Ryssdal: The United Nations said today 11 million people in the Horn of Africa are at risk of starvation. The U.N. called the area of Kenya, Somalia and Ethiopia that've been affected by drought "the triangle of death."

Somalia's recent history of terrorism and piracy is scaring away a lot of potential donors -- the British not among them. Britain's now one of the world's most generous sources of international assistance. It gives, as a percentage of GDP, more than double what the United States gives. But the Cameron government's commitment to being an aid superpower comes at a time of deep domestic budget cuts.

Marketplace's Stephen Beard reports from London.


Stephen Beard: British TV news has carried daily reports of drought, famine and death in the Horn of Africa.

TV news: Dadaab is a place where life hangs in the balance every single day.

And these heart-wrenching reports of starving children have reignited a debate in the British Parliament.

Voices in Parliament: Questions to the prime minister. Thank you, Mr. Speaker.

Prime Minister David Cameron has capitalized on the grim images from Africa to justify one of his less popular policies.

David Cameron: I think it once gain demonstrates that we are right to maintain and increase our spending in this area. Difficult as the arguments sometimes are.

In spite of making deep budget cuts at home to reduce the deficit, Cameron has stepped up spending on overseas aid. Over the next three years, the U.K. will splash out an extra $5 billion -- not just on emergency famine relief, but on development: building roads, hospitals and schools in Africa and elsewhere, in order to alleviate poverty.

Helen Mogombo: That aid is really about saving lives.

Helen Mogombo of the British aid agency Oxfam welcomes the Cameron largesse.

Mogombo: Charity should not end at home. I think we should understand that the British government, and other rich governments, have got a responsibility to support the poorest in the world.

But while no one would begrudge emergency humanitarian assistance, many do challenge the plan to pump ever-increasing amounts of taxpayers' cash into overseas development.

Mark Littlewood: I think it's a quite extraordinary decision by the British government.

Mark Littlewood, head of the free market Institute for Economic Affairs.

Littlewood: It may help Britain preen itself on the international stage and give Prime Minister Cameron a warm glow about the good deeds he believes he's doing. But the actual impact on the ground is lamentable.

Aid does not promote growth, he says. Just look at the figures: over the past three decades, Africa received 16 times more aid per head than China. And yet the African economy shrank, while China took off. And then there's the question: who deserves a helping hand?

India has its own space program, it has nuclear weapons and it gives billions of dollars in aid to Africa. And yet India will itself receive more than $1.5 billion in aid from Britain over the next four years. But as the Prime Minister Manmohan Singh told the BBC, he's not complaining.

Manmohan Singh: If some friendly country offers a large amount of money, I don't see reason why we should decline to accept it.

The British government points out that India still has 450 million people living in abject poverty, and that British aid helps alleviate their plight. Mark Littlewood is not persuaded.

Littlewood: The United Kingdom could start saying it's worried about certain U.S. welfare program, and was now going to spend money in Alabama or Texas on Americans that we didn't believe were being satisfactorily looked after by their government.

The British government says its aid plan is not only morally right -- it will create opportunities for British business; it will win friends abroad. But it seems to be losing them at home. According to the latest opinion poll, 57 percent of Brits -- in this time of austerity -- want aid spending cut.

In London, I'm Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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