How the UK’s spending on foreign aid compares to other countries’

Published

4 years ago

June 7, 2021

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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).

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.

Politics

SEC and Gemini ask to pause lawsuit to explore ‘potential resolution’

Published

43 mins ago

April 2, 2025

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SEC and Gemini ask to pause lawsuit to explore ‘potential resolution’

The US Securities and Exchange Commission and crypto exchange Gemini have asked to pause the regulator’s suit over the exchange’s Gemini Earn program, saying they want to discuss a potential resolution.

In an April 1 letter to New York federal court judge Edgardo Ramos, lawyers representing the SEC and Genesis requested a 60-day hold on the case and that all deadlines be pulled “to allow the parties to explore a potential resolution.”

“In this case, the parties submit that it is in each of their interests to stay this matter while they consider a potential resolution and agree that no party or non-party would be prejudiced by a stay,” the letter states.

The lawyers added that a stay was in the court’s interest as “a resolution would conserve judicial resources” and proposed that a joint status report be submitted within 60 days after the entry of the stay.

The SEC sued Gemini and crypto lending firm Genesis Global Capital in January 2023, alleging they offered unregistered securities through the Gemini Earn program.

In March 2024, Genesis agreed to pay $21 million to settle charges related to the lending program, but the enforcement case against Gemini remains outstanding.

The letter did not specify what a possible resolution would entail, but the SEC has dropped several lawsuits it launched against crypto companies under the Biden administration, including against Coinbase, Ripple and Kraken.

In February, Gemini said the SEC closed a separate investigation into the firm as the regulator winds back its crypto enforcement under President Donald Trump.

“The SEC cost us tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation. Of course, Gemini is not alone,” Gemini co-founder Cameron Winklevoss said at the time.

OpenSea, Crypto.com and Uniswap, among others, have also recently reported that the SEC had closed similar probes into their companies that were investigating alleged breaches of securities laws.

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Politics

Crypto PAC-backed Republicans win US House seats in Florida special elections

Published

58 mins ago

April 2, 2025

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Crypto PAC-backed Republicans win US House seats in Florida special elections

Two Republicans who received a combined $1.5 million from the crypto-backed political action committee (PAC) Fairshake will enter the US House after winning special elections in Florida.

Republican Jimmy Patronis won the vacant seat in Florida’s 1st Congressional District to replace Matt Gaetz, taking 57% of the vote to defeat Democrat Gay Valimont, according to AP News data.

Randy Fine also took Florida’s 6th Congressional District with 56.7% of the vote to beat his Democratic rival, public school teacher Josh Weil, and fill a seat left vacant by Mike Waltz, who took a job as White House national security adviser.

Florida’s 1st and 6th Congressional Districts — located in Florida’s western panhandle and along the state’s northeast coast — have been controlled by Republicans for roughly 30 years, but their lead has narrowed in recent years.

Fairshake, a PAC backed by crypto industry giants including Coinbase, Ripple and Andreessen Horowitz, gave Fine around $1.16 million in advertising spending and funneled $347,000 to Patronis to support his campaign.

Both Republicans have expressed support for the crypto industry, with Fine stating in a Jan. 14 X post that “Floridians want crypto innovation!”

Fairshake and its affiliates poured around $170 million into the 2024 US presidential and congressional elections to back candidates who committed to supporting the crypto industry.

The wins by Patronis and Fine increased Republican representation in the House to 220 seats, with the Democrats holding 213 seats.

There are two vacant seats to be filled after Texas and Arizona Democrats Sylvester Turner and Raúl Grijalva died on March 5 and March 13, respectively.

Florida can expect to see a crypto-friendly regulatory environment

The victories for Patronis and Fine likely mean that crypto legislation will continue to see support in the US capital.

The Republican Party would have maintained its House majority even if it lost both seats in Florida, but it would have made it more difficult for some of the recently introduced Republican-backed crypto bills to pass through the House and Senate.

At the Digital Assets Summit on March 18, Democratic Congressman Ro Khanna said he believes Congress “should be able to get” both a stablecoin and crypto market structure bill done this year.

Bills that could eventually make their way to the House include the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which passed the Senate Banking Committee in an 18-6 vote on March 13.

Senator Cynthia Lummis also reintroduced a Bitcoin reserve bill about a week after the Trump administration announced the establishment of a Strategic Bitcoin Reserve on March 6, with the legislation referred to the Senate Banking Committee on March 11.

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Politics

UK trade bodies ask government to make crypto a ‘strategic priority’

Published

3 hours ago

April 2, 2025

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UK trade bodies ask government to make crypto a ‘strategic priority’

Several British trade associations have asked Prime Minister Keir Starmer’s office to appoint a special envoy dedicated to crypto and for a dedicated action plan for digital assets and blockchain technology.

In a March 31 letter, the coalition of six UK digital economy trade bodies urged Starmer’s special adviser on business and investment, Varun Chandra, for a “greater strategic focus and alignment to deliver investment, growth and jobs” for the crypto industry.

The group, which consisted of the UK Cryptoasset Business Council, Global Digital Finance, The Payments Association, Digital Currencies Governance Group, the Crypto Council for Innovation and techUK, noted the US policy shift on crypto under President Donald Trump and his appointment of a crypto czar.

Britain’s commitment to an economic trade deal focused on technological cooperation with the US “presents a significant opportunity to mirror the United States’ ambition in fostering leadership in blockchain, digital assets, and other emerging financial technologies,” the letter stated.

The group recommended that the UK appoint a blockchain special envoy, similar to the US, to coordinate policy, foster innovation, and position the country competitively in global markets.

The trade bodies also called for the development of a dedicated government action plan for crypto and blockchain technology, including a concierge service to attract high-potential firms.

They added that the government should acknowledge and leverage the commonalities between blockchain, quantum computing and artificial intelligence technologies, including potential applications for government services.

Another recommendation was to create a high-level industry-government-regulator engagement forum to ensure informed decision-making and cross-sector collaboration.

“With deep pools of talent, access to capital, world-class academic institutions, and sophisticated regulators, the UK provides an environment where digital assets and blockchain innovation can thrive,” they stated.

The coalition argues that crypto and blockchain technology could boost the UK economy by 57 billion British pounds ($73.6 billion) over the next decade, with the sector potentially increasing global gross domestic product by 1.39 trillion pounds ($1.8 trillion) by 2030.

Tom Griffiths, the co-founder and managing partner of crypto compliance advisory firm BitCompli, said in response to the letter on LinkedIn that the Financial Conduct Authority “has a lot of talent and a good sight of future plans, but the UK is definitely losing pace with Dubai, Singapore, and other EU jurisdictions.”

“Now is the time for the FCA to act, or the UK will lose out on this huge opportunity, which is digital assets and all the benefits this sector can bring, not only now but over the next 20 years,” he added.

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