Summary
The global development landscape is changing fast. In 2015, a new global development agenda was launched through the Global Goals, alongside international commitments on development finance and climate change. In the UK, the government has set out a strategy for UK aid for the next five years.
In this paper, we explore the changing context for UK aid and the implications for ICAI's mandate to provide independent scrutiny of the aid programme. We look at global trends in international development, and at ongoing and likely challenges for UK aid. Our goal is not to make judgments, either on UK government policy or DFID's implementation of it, but rather to explore some of the choices that lie ahead for the aid programme. We then reflect on how this analysis has helped us shape our review programme and our approach to our mandate.
A changing global development landscape
At the end of the Millennium Development Goals period, the standout achievement has been a dramatic fall in global income poverty. Yet uneven progress around the world has led to rapid changes in the geography of global poverty. Most of the world's poorest people now live in just two regions — South Asia and sub-Saharan Africa — and, within a few years, a large majority will live in Africa. They will be concentrated in countries affected by conflict and fragility. With Africa's population doubling over the next three decades, poverty will have an increasingly youthful face. It will also have a more urban profile, with as many as a billion people living in slum conditions. Both climate change and shifting patterns of global conflict further complicate the picture, threatening past development gains.
In recent years, conflict and insecurity have surged in both scale and complexity, with mortality rates not seen in twenty years and unprecedented levels of humanitarian need. The nature of conflict has also changed, creating complex new security threats that are beyond the capacity of any single country to manage.
In the face of these challenges, the nature of development assistance itself is changing. While aid is at record levels, its role is increasingly about leveraging other types of development finance, including private investment and tax revenues. The international architecture for development cooperation is growing more elaborate, as new mechanisms emerge in response to particular global threats. In this increasingly complex system, development cooperation is becoming as much about knowledge exchange and partnerships as delivering goods and services.
Emerging challenges for UK aid
The UK aid programme is evolving in response to this changing global picture. In the coming years, the aid budget will continue to grow, giving the UK greater resources to devote to global development challenges. More of the aid budget will be spent by departments other than DFID, including through large, cross-government mechanisms such as the International Climate Fund, the Conflict, Stability and Security Fund and a new Prosperity Fund. The rebalancing towards economic growth will continue, with increased use of development capital. There will be more focus on tackling the root causes of global insecurity, particularly in the Middle East, and increased spending on climate change.