Double whammy hits UK aid budget

Ogichoya Kimogol, 20, has survived as a single mother in the Rendille tribe of northern Kenya for the past three years [Georgina Cranston]

Research from CAFOD shows the economic and financial crisis is set to wipe up to $41billion from the UK aid budget for developing countries over the next seven years

A double whammy of shrinking GDP and a weak exchange rate are combining to impact on the UK’s aid budget.

And that’s if we assume the UK will stick to its goal of increasing aid from its 2007 level of £5 billion (0.35 per cent of GDP) to reach the United Nations target of 0.7 per cent of GDP in 2014.

This shortfall will hit the poorest in the developing world at a time when they are most in need of aid, leaving them fighting for survival.

The fall in the value of sterling has already cut the value of UK aid by at least 25 per cent. New calculations made by CAFOD show the toll that the recession will take.

Huge sums

CAFOD’s senior policy adviser, George Gelber, said; “These are huge sums and the impact will be all the more devastating because developing countries are being hit hard.

"The poorest people and the poorest countries are going to feel the hardest edges of the financial crisis because they have less to cushion them from the crisis and they are most dependent on the resources and trade of richer countries.”

The domino effect of the recession is now reaching developing countries. They have been providing the raw materials to fuel the awesome Chinese manufacturing machine churning out goods for spendthrift consumers in the developed western economies.

"As a consequence, countries are now exporting less for lower prices.

The powerhouses of the developing world have slammed on the brakes: China's year-on-year imports fell by 17.9 percent in November; Chile's - by 14 percent; Korea's - by 14.6 percent; Taiwan's - by 11.3 percent; Vietnam's - by 7.8 percent.

With copper just one-third of the price that it was six months ago, copper mines are closing and workers are being laid off all over Africa.

Zambia, where copper accounts for 80 per cent of export earnings, will be hard hit – and the poorest Zambians will be hardest hit of all.

This scenario with different metals and different exports is being played out across Africa and the rest of the developing world. And when poor people in developing countries need help most, aid budgets from the UK and elsewhere are shrinking fast.

CAFOD is beginning to receive reports from partners on the impacts of the global financial crisis as it reaches down into the poorest communities.

This year's Harvest Fast Day (October 2) focuses on the impact of the financial crisis on families in Kenya.

In the slums of Nairobi poor families already have to survive on an income that provides less than half the basic necessities required by an average household.

Now family budgets are being stretched even further as they are paying twenty per cent more for their maize flour. CAFOD partner the Jesuit-run Hakimani Centre, who carried out the cost of living surveys says this is pushing families into even deeper poverty.

“Bearing in mind 0.7 per cent in 2014 will be worth £1.5billion less than it would have been without a recession," said George Gelber, “the very least the government must do is to reaffirm its commitment to the 0.7% aid target and set binding year by year milestones until it is achieved in 2014. “

“In a period of economic and financial turbulence, this is the best way to support poor countries in the implementation of their anti-poverty plans.

“Now, even more than before, they need predictable and reliable aid which will deliver for poor people.”

“It’s hard to ask for more aid when people in the UK are losing their jobs, but we need to think about the people for whom the global downturn will literally be a matter of life or death.”

Media: For further information or interview requests for George Gelber please contact: Nana Anto-Awuakye on 020 7095-5560 or 07799 477 541 or email: nanto-awuakye@cafod.org.uk

(Left to right) Richard Cockle, John Corney, Lizzie Cranfield, and Gavin Baxter celebrate together after finishing the Great North Run 2005 [CAFOD]

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Published on 03/02/2009, last updated on 21/09/2009

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CAFOD is the official Catholic aid agency for England and Wales

Double whammy hits UK aid budget

Huge sums