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Conservatives rebels have been among those calling on the government to reverse its plan to cut foreign aid.

Since 2015, it has been enshrined in UK law for the country to give at least 0.7% of Gross National Income (GNI) to lower and middle-income countries to aid their development.

The plan to reduce the UK’s contribution to foreign aid to 0.5% of GNI – despite a United Nations target of 0.7% – has been met with widespread domestic and international criticism.

Here, we look at how much the UK gives in comparison to other countries.

Who gives foreign aid?

Most richer countries give aid, including some that are classed as middle or lower-income.

But the 0.7% target applies to countries that are on the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD DAC).

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These 30 countries are made up of many in the European Union, the UK, US, and other highly developed nations like Australia and New Zealand.

A couple of other countries are participants on the DAC, such as Saudi Arabia, the UAE, Bulgaria and Romania.

Last year, the UK was one of only seven countries reporting to the OECD that met the 0.7% target, giving the equivalent to $17.4bn – exactly 0.7% GNI. Out of European countries, only Germany spent more than the UK on aid in absolute terms ($27.5 billion or 0.73% of GNI). But several OECD countries gave more as a percentage of GNI.

In 2020, the proportion of GNI given by countries varied significantly from country to country, despite the UN’s target.

What is the money spent on?

The aid from DAC countries is called Official Development Assistance (ODA), which is intended to promote the economic development and welfare of developing countries, according to the OECD.

In 2020, the last year for which net flows of aid were reported, member countries sent $161bn to those developing countries, an increase of 7% in real terms compared to 2019. About three-quarters of that came from G7 countries.

Broadly, this falls into one of four categories: 1. Bilateral projects, programmes and technical assistance, which represent just over half of total net ODA; 2. Contributions to multilateral organisations (about a third of total ODA); 3. Humanitarian aid; and 4. Debt relief.

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This can include grants that fund improvements to the health of people in developing countries, such as vaccination programmes, but it can also include programmes that can benefit donor countries, such as infrastructure projects that allow greater levels of trade and investment.

Many countries, such as Japan, offer a sizable proportion of their aid in the form of loans.

How has the UK been doing up until now?

In 2013, the UK achieved the 0.7% target for the first time.

It came about after the Conservative Party committed to the target in its 2010 manifesto, when it also proposed setting up a dedicated department for international development to help achieve its aim.

It has maintained the commitment in subsequent manifestos, including in 2019 when it pledged to maintain the proportion of spending.

In 2010, then leader David Cameron defended the move, telling business leaders at the Lord Mayor’s banquet in London’s Guildhall that it saved lives, prevented conflict and was the “most visible example of Britain’s global reach” for millions of people.

Since 2015, the Government has also been under a statutory duty to meet the 0.7% target, as a result of the International Development (Official Development Assistance Target) Act.

But, in the wake of the impact of the pandemic, ministers want to slash the proportion to 0.5% saying that, while it is only a temporary measure until the nation’s finances are repaired, it will save £4bn.

If the UK had spent 0.5% of GNI in 2020, as it plans to in 2021, it would have ranked 10th in the world for its aid spending as a proportion of GNI, instead of seventh, according to the House of Commons Library.

How did the 0.7% target come about?

A target for international aid was originally proposed as far back as 1958 – at first by the Central Committee of the World Council of Churches, which suggested a 1% of GDP figure would be appropriate, and the idea was then circulated to all United Nations delegations at the 1960 General Assembly.

The 0.7% target was first agreed by the DAC in 1970 and it has repeatedly been international endorsed.

Among the key moments at which the 0.7% figure has been backed are the 15 countries that were members of the European Union by 2004 agreeing the following year to reach the target by 2015 and the 0.7% target serving as a reference for 2005 political commitments to increase ODA at the G8 Gleneagles Summit and the UN World Summit.

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In 2017, the UK government said it wanted to modernise the ODA rules to include some peacekeeping-related spending.

Currently, spending on military equipment or activity, including peacekeeping expenditure and anti-terrorism operations, are excluded, apart from the distribution of humanitarian aid.

Aid that relates to nuclear energy can be included as long as it is provided for civilian purposes.

Do countries outside the OECD provide international aid?

OECD countries are not the only ones that provide foreign aid, in its widest definition.

Evidence has been presented that China, India and Russia – which are classed as middle and upper-middle income countries – provide aid that would qualify under the ODA rules, but the amount they provide is not subject to the degree of transparency of DAC aid budgets.

US research group Aid Data has examined the Chinese loans paid to developing countries for a wide range of projects and businesses, with tens of billions in ODA payments given to lower or middle-income nations.

The vaccine diplomacy engaged in by Russia and India illustrates how two other countries outside the OECD offer one form of help.

And the World Bank reported that Russia’s ODA was $1.2bn in 2017, the last year for which figures were available, and India’s Ministry of External Affairs says it has offered “lines of credit” to 64 countries, worth $30.6bn.

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Millionaire former Tory donor defects to Reform

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Millionaire former Tory donor defects to Reform

Millionaire Tory donor Malcolm Offord has defected to Reform UK, saying he would be campaigning “tirelessly” to “remove this rotten SNP government”.

Nigel Farage announced the former Conservative life peer’s defection during a rally in the Scottish town of Falkirk, where regular anti-immigration protests have taken place outside the Cladhan Hotel – which is being used to house asylum seekers.

Mr Farage, Reform UK’s leader, said he was “delighted” to welcome Greenock-born Lord Offord to Reform, describing his defection as “a brave and historic act”.

He added: “He will take Reform UK Scotland to a new level.”

During a speech, Lord Offord, who previously donated nearly £150,000 to the Tories, said he would be quitting the Conservative Party and giving up his place in the House of Lords as he prepares to campaign for a seat in Holyrood in May.

The 61-year-old said he wanted to restore Scotland to a “prosperous, happy, healthy country”.

“Scotland needs Reform and Reform is coming to Scotland,” he told the rally.

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“Today I can announce that I am resigning from the Conservative Party. Today I am joining Reform UK and today I announce my intention to stand for Reform in the Holyrood election in May next year.

“And that means that from today, for the next five months, day and night, I shall be campaigning with all of you tirelessly for two objectives.

“The first objective is to remove this rotten SNP government after 18 years, and the second is to present a positive vision for Scotland inside the UK, to restore Scotland to being a prosperous, proud, healthy and happy country.”

The latest defection comes as Mr Farage finds himself at the centre of allegations of racism dating back to his time in school.

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Claims made against Nigel Farage

Sky News reported on Saturday that a former schoolfriend of Mr Farage claimed he sang antisemitic songs to Jewish schoolmates – and had a “big issue with anyone called Patel”.

Jean-Pierre Lihou, 61, was initially friends with the Reform UK leader when he arrived at Dulwich College in the 1970s, at the time when Mr Farage is accused of saying antisemitic and other racist remarks by more than a dozen pupils.

Mr Farage has said he “never directly racially abused anybody” at Dulwich and said there is a “strong political element” to the allegations coming out 49 years later.

Reform’s deputy leader Richard Tice has called the ex-classmates “liars”.

A Reform UK spokesman accused Sky News of “scraping the barrel” and being “desperate to stop us winning the next election”.

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‘European SEC’ proposal sparks licensing concerns, institutional ambitions

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‘European SEC’ proposal sparks licensing concerns, institutional ambitions

The European Commission’s proposal to expand the powers of the European Securities and Markets Authority (ESMA) is raising concerns about the centralization of the bloc’s licensing regime, despite signaling deeper institutional ambitions for its capital markets structure.

On Thursday, the Commission published a package proposing to “direct supervisory competences” for key pieces of market infrastructure, including crypto-asset service providers (CASPs), trading venues and central counterparties to ESMA, Cointelegraph reported.

Concerningly, the ESMA’s jurisdiction would extend to both the supervision and licensing of all European crypto and financial technology (fintech) firms, potentially leading to slower licensing regimes and hindering startup development, according to Faustine Fleuret, head of public affairs at decentralized lending protocol Morpho.

“I am even more concerned that the proposal makes ESMA responsible for both the authorisation and the supervision of CASPs, not only the supervision,” she told Cointelegraph.

The proposal still requires approval from the European Parliament and the Council, which are currently under negotiation. 

If adopted, ESMA’s role in overseeing EU capital markets would more closely resemble the centralized framework of the US Securities and Exchange Commission, a concept first proposed by European Central Bank (ECB) President Christine Lagarde in 2023.

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The proposal to “centralize” this oversight under a single regulatory body seeks to address the differences in national supervisory practices and uneven licensing regimes, but risks slowing down overall crypto industry development, Elisenda Fabrega, general counsel at Brickken asset tokenization platform, told Cointelegraph.

“Without adequate resources, this mandate may become unmanageable, leading to delays or overly cautious assessments that could disproportionately affect smaller or innovative firms.”

“Ultimately, the effectiveness of this reform will depend less on its legal form and more on its institutional execution,” including ESMA’s operational capacity, independence and cooperation “channels” with member states, she said.

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Global stock market value by country. Source: Visual Capitalist

The broader package aims to boost wealth creation for EU citizens by making the bloc’s capital markets more competitive with those of the US.

The US stock market is worth approximately $62 trillion, or 48% of the global equity market, while the EU stock market’s cumulative value sits around $11 trillion, representing 9% of the global share, according to data from Visual Capitalist.

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