Aid Under Pressure

In the current economic crisis, poor countries are experiencing significantly reduced income from trade, remittances and foreign investment. As a result, an additional 90 million people are expected to be living in poverty by the end of 2010, and 400,000 more children are likely to die. Progress towards the Millennium Development Goal of eradicating hunger and extreme poverty has been set back three years. At the G20 summit in London in April, agreement was reached to provide billions of dollars of additional resources for the international financial institutions (IFIs), with the majority going to the International Monetary Fund (IMF). This will provide a much needed boost for balance of payments support, yet it remains unclear how much of the funding will benefit developing countries. The huge increase in resources for the IFIs needs to be matched by governance reforms and developing countries need to be given a stronger voice on the boards and in the decision-making processes of the multilateral institutions. The recession should not be used as an excuse to reduce aid flows but developing countries must also be assisted to derive the maximum benefit from their own resources. They lose billions of dollars each year to tax evasion by international companies. The UK has a clear responsibility to address enforcement of international tax standards in relation to those British Overseas Territories which are tax havens. More effort is needed towards securing an agreement in the pro-development Doha round of World Trade Organisation negotiations. Finally, DFID must do more to show the public the many and varied positive outcomes of its work in poor countries.

Climate change threatens to destroy gains made in poverty reduction in many developing countries. Substantial funding will be needed to help poor countries tackle climate change. This funding must be additional to pledges already made for development assistance because developing countries are not responsible for the emissions which have caused climate change and the estimated costs cannot be met from existing development assistance or national budgets. The current economic crisis could derail efforts to tackle climate change or it could provide an opportunity to chart a new "greener" growth strategy in developing. Climate change should be central to the Department for International Development's (DFID's) work in developing countries and it needs to start establishing comprehensive climate change programmes. Sustainable management of the natural resource base is vital. DFID has focussed on water resources management and it should now consider the creation of marine and forestry management strategies to ensure that these sectors can continue to contribute to economic growth, in a sustainable manner. Developed countries should ensure that actions taken to reduce emissions do not impact negatively on developing countries. Tourism and export horticulture are important contributors to poverty reduction in many poor countries and these sectors should be supported to increase their pro-poor benefits and reduce their climate change impact. There is a need for more research into low carbon options which are appropriate for poor countries and for mechanisms to facilitate knowledge and technology transfer. The Copenhagen Conference to decide the successor to the Kyoto Agreement must agree stringent emission reduction targets or increase the risk of more severe climate change impacts.

On cover and title page: House, committees of the whole House, general committees and select committees

The Department for International Development's (DFID) objectives continue to focus on achievement of the internationally agreed Millennium Development Goals with the overarching aim of poverty reduction. This focus remains valid. However, on current trends most of the Goals will not be met by the 2015 deadline. The prospects for achieving Millennium Development Goal 2 on universal primary education by 2015 concern the Committee. To meet the target of all children completing primary education by 2015, universal access to schooling will need to be in place by 2010. The necessary schools will therefore have to be built and teachers trained in less than two years. The global economic downturn may exacerbate the risk of failure if development assistance levels are not maintained and donor commitments on aid are allowed to lapse. In straitened economic circumstances it is vital that every pound spent achieves the maximum impact, not least so that public support for aid expenditure can be maintained. The Committee is not convinced that DFID's evaluation processes allow it to make an accurate assessment of what its funding is achieving. The Independent Advisory Committee on Development Impact has begun to improve evaluation within DFID. This process must continue with the full engagement of the Department. DFID's ability to deliver its objectives is beginning to be constrained, despite its rising budget, by the Government-wide requirement to reduce its administrative budget and therefore the number of staff it employs. The Government should urgently reassess whether DFID has sufficient staff in place effectively to deliver the objectives which it has assigned to the Department under its Public Service Agreements.

This is a controversial and comprehensive account of a formative period in French economic history.

Over the past seven years, the Bush administration has launched a revolution in U.S. foreign aid. At no time since the administration of President Kennedy have there been more changes in the volume of aid, in aid's purposes and policies, in its organization, and in its overall status in U.S. foreign relations. George Bush's Foreign Aid: Transformation or Chaos? analyzes in detail the array of recent reforms of U.S. economic assistance and the difficult issues these reforms raise, while placing the changes and the manner of their implementation in a historical and political context. Lancaster draws out the challenges and opportunities this transformation of U.S. aid offer for the next administration to engage the emerging world of the 21st century.