The century-old system of “foreign aid”, whereby wealthy countries provide support to poorer ones, is collapsing around us. Most people don’t seem to care. Isn’t it a waste of money? And why should the taxpayers in one country pay to help people somewhere far away? Isn’t foreign aid just a patronising white-saviour rehash of colonialism?
The collapse of foreign aid is a tragedy, not just for the world’s poor, but also for the countries making the cuts. Here’s why.
Historic numbers
Start with the numbers. On his first day in office, US President Donald Trump put an immediate freeze on all US foreign aid, and it is now being reported that less than 10 percent of spending will survive the freeze. This has kicked off a domino effect. The Netherlands was next, announcing 30 percent cuts. Now, the UK has announced cuts of a further 40 percent, leaving UK aid at less than half of 2020 levels. These three actions alone will wipe out over a quarter of global aid.
It is unlikely to stop there. Germany and Japan are now the largest remaining donors, but politicians there are already calling for cuts.
It’s not hard to see why the cuts are being made. Rich countries have plenty of debt, and problems of their own. Their voters are increasingly electing leaders who want to put their country first. They see foreign aid at best as an act of charity that doesn’t help them, and at worst as waste and corruption.
Foreign aid is not perfect, but it can be hugely beneficial both to the countries that receive it, and the donors themselves. It’s time to take on the lazy myths.
Seventeen million reasons
There’s no question that some foreign aid is wasted. That is most often when it is used to play politics rather than really help people, for example bribing Rwanda to house unwanted refugees. But there are a number of uses for foreign aid that have been proven to work, with extraordinary impact.
Gavi is a joint donor fund that many countries pay into, which provides vaccines for countries that struggle to afford them. It has been shown through rigorous academic research to have saved over seventeen million children’s lives over the last two decades. That’s more than the total number of deaths in World War I, at a cost of just a thousand dollars for every life saved.
But why should taxpayers in the UK or Japan pay for it?
Well, firstly, because as hard as life can feel for people in rich countries, we still live in an extraordinarily unequal world. Over a billion people live in countries where the entire annual healthcare spend per person is less than $100. That’s not enough for one doctor’s appointment in Europe, let alone treatments for complex diseases.
Although foreign aid is less than one percent of the budgets of most donor countries, it provides the majority of the entire health spending in several African countries.
The return on investment to donors
But saving all those lives is also a smart investment for the donor. It can help with all three of the biggest challenges that rich countries are grappling with: conflict, irregular migration and economic growth.
First, take conflict. The CIA funded a massive cross-country historical analysis to understand the causes of civil wars. They did not do this out of altruism. It was about American national security. They found that the most important social factor in predicting state collapse was the number of children dying of disease before their fifth birthday — precisely those deaths that Gavi is working on preventing. Multiple studies have also shown that foreign aid can reduce the risk of conflict recurring after ceasefires are agreed.
What about migration? Economists at the Kiel Institute, analysing migration intentions in a large sample across Africa, have found that the two biggest drivers of people’s desire to migrate are conflict, and the lack of basic amenities such as healthcare. See the trend? Improve healthcare, save lives, prevent conflict, reduce people’s desire to migrate.
The third benefit is economic growth. Donors like Germany and Japan are massive exporters of cars, technology and other goods, but their growth has been sluggish. New markets for their products would help. But many countries in Africa are caught in a poverty trap. Guess what one of the biggest causes of the poverty trap is, according to hundreds of academic studies? You guessed it. Precisely the infectious diseases that Gavi and other foreign aid-funded programs are working to eliminate.
Solidarity, not saviourism
And what about the accusation that foreign aid is a new white-saviour colonialism? It can be, but doesn’t have to be.
South Korea has gone from a desperately poor, colonised country, to a rich one. And it is now a major donor, because Koreans value the aid that they received from the US and others during their development journey. Their aid is based on solidarity, not superiority.
Middle Eastern countries like Türkiye, Saudi Arabia, UAE and Qatar have also become major donors, both out of solidarity with their neighbours, but also to boost their influence and alliances.
These non-European donors have always approached foreign aid as a relationship of peers, where the wealthier country has no in-built moral superiority. And Europeans have slowly come around to this approach, in part because countries in the Global South will no longer tolerate anything else. That is why EU President Ursula von der Leyen repeatedly refers to the EU-Africa Partnership as a “partnership of equals”.
Foreign aid is still flawed. It is still tainted by colonial legacies. And it is not the solution to every problem. It will not stop all wars, end all irregular migration or allow Swaziland to have the economy of Switzerland. But it can help with the three biggest concerns of rich countries, while saving the lives of the most vulnerable people. There are worse uses of government money.
