There is no doubt that the international development scene has experienced a series of unprecedented events. Brexit already put the whole development community on high alert due to the reduced budget available to spend by European Institutions and the uncertainty surrounding the United Kingdom’s (UK) development priorities. COVID-19 pandemic exacerbated this situation, with traditional providers of Overseas Development Assistance (ODA) slashing their development budgets to tackle the rising costs at home linked to the pandemic. Meanwhile the developing world itself was ill equipped with the ensuing health crisis, with a limited access to financial markets, and uncertainty facing its services and goods markets.
It is in this context that the UK is in the process of defining its new International Development Strategy, as announced in the Integrated Review of Security, Defence, Development and Foreign Policy. The UK is the third largest provider of ODA amongst the members of the Development Assistance Committee (DAC), having disbursed, in 2019, over USD 19 billion in ODA, after the United States (US) and Germany, which disbursed nearly USD 33 billion and USD 24 billion, respectively. In this context, policymakers should make sure that this new strategy takes into account the current trends affecting international development. This does not refer only to the change in priorities brought by COVID-19, but also the rise of non-traditional international development partners and the technological advantages allowing developing countries to leapfrog.
The rise of China and India as one of the most relevant players in the international arena has brought to light the increasing role of South-South development cooperation as a way to strengthen the ties between developing players. As highlighted by UN (2020), South-South cooperation expands beyond the traditional support linked to financial and technical cooperation, and it continues to influence the wider development landscape, with nearly 70 percent of developing countries being involved in South-South cooperation or other peer-to-peer exchange platforms.[1] Linked to the above, Venkateswaran (2020) highlights that China has used its Belt and Road Initiative to restrengthen its presence across Africa, having invested in 52 out of the 54 African countries.[2]
Additionally, and in the area of trade, the emergence of digital trade has the potential to promote the emergence of new industrial organisations, enabling countries to leapfrog certain technological barriers, and re-balance the power relations in the supply chain between producers, consumers and business partners. Technologies in the digitalisation of trade processes, Internet of Things (IOT), 3D printing, Artificial Intelligence (AI), and blockchain solutions, as deployed in transportation, logistics, trade finance and other areas of trade are lowering the barriers to entry to trade for MSMEs, raising transparency and increasing efficiency. Distributed ledger technologies and crypto currencies are changing payment systems, transparency in Aid for Trade and providing new opportunities for raising development financing.
The UK must step up and put in place an International Development Strategy that addresses the challenges faced by the poorest amongst us and leaves no one behind. Moving forward, the UK should adopt and implement a comprehensive International Cooperation Strategy that takes into consideration the changing nature of ODA, and Aid-for-Trade (A4T) particularly. Whilst the recent merger of the UK’s Department for International Development (DfID) and the Foreign and Commonwealth Office (FCO) was largely overshadowed by the scale of the cuts to UK aid and the lack of transparency and consultation around government decisions,[3] the UK has now the opportunity to present a detailed action plan that addresses some of the criticisms highlighted in the past and works towards the achievement of the 2030 Sustainable Development Goals.[4]
The UK should avoid grandiloquent statements and be clear on its way forward. One of the most efficient ways through which the Government can set the course to achieve the objectives of the Integrated Review is to provide, in the upcoming Strategy, as much detail as possible. A Theory of Change approach is recommended to be adopted to track and identify the possible pathways of change that will lead to the achievement of such objectives. But putting in place a strong monitoring and review framework will be crucial for the Government. New Zealand adopted a similar framework when it commissioned an M&E framework with theory of change, for its key development instrument in the Pacific: the PACER Plus agreement. On the policy front, developing a comprehensive all-government appropriation of the Strategy will also be crucial to the achievement of the objectives set in the Integrated Review. This is in line, as well, with the use of the UK’s soft power. As highlighted by Gordon (2020), a “coherent approach is needed to ensure that all aid, economic and development policies, trade policies and our global consumption and trade footprint do not result in any further loss of carbon-rich, biodiversity-rich ecosystems. UK government domestic and international commitments such as to the Paris Climate Change Agreement, to net zero and to the SDGs need to be the overarching framework for all government decisions.”[5]
At International Economics Consulting Ltd (IEC), we are experienced international development experts, having implemented several aid for trade solutions, including in the area of regional digital connectivity, e-payments, distributive ledger technology for sustainable financing, digital trade and e-commerce and trade policy/trade negotiation support, with a wide range of partners, such as the UK’s FCDO, DIT, the European Commission, Asian Development Bank, UN agencies, the World Bank, and G7 and G20 Governments. IEC has a partnership with Microsoft which has led to a number of analytical tools for the public. Do not hesitate to reach out if you want to explore possible collaboration opportunities.
Paul Baker is the founder and CEO of IEC. He is a consultant for various governments in developed and developing countries, an adviser on global corporate strategies to multinationals, and a Visiting Professor at the College of Europe. Paul is an expert in the Working Group of the World Economic Forum’s (WEF) Digital Flows Initiatives, an Expert in the WEF/WTO’s TradeTech Working Group on AI, IOT, Blockchain and Digital Identities for trade, and is on the Board of the United Nations Economic and Social Commission for Asia Pacific’s Trade Intelligence tools. He is also a member of the UK’s All Party Parliamentary Committee on Trade.
References:
[1] UNESC (2020). Trends and Progress in International Development Cooperation. United Nations Economic and Social Council, E/2020/10.
[2] Venkateswaran, L. (2020). China’s belt and road initiative: Implications in Africa. ORF Issue Brief No. 395, August 2020, Observer Research Foundation.
[3] Starling, S. (2021). Opinion: The UK is undoing its good work on international development. Devex, March 18. Available from: https://www.devex.com/news/opinion-the-uk-is-undoing-its-good-work-on-international-development-99385
[4] Baldoumas, A. (2021). The UK needs to urgently set a new course in its development strategy. Bond, July 20. Available from: https://www.bond.org.uk/news/2021/07/the-uk-needs-to-urgently-set-a-new-course-in-its-development-strategy
[5] Gordon, G. (2020). Submission of Evidence to the IDC Enquiry on the Effectiveness of UK Aid – April 2020. CAFOD (Catholic Agency for Overseas Development), RSPB (The Royal Society for the Protection of Birds), Christian Aid, WWF-UK, Oxfam GB and The International Institute for Environment and Development (IIED). Available from: https://committees.parliament.uk/writtenevidence/3576/html/
