UK Aid Policy: Global Funding Trends
Debate between James Naish and Noah Law(3 weeks, 5 days ago)
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Noah Law
I agree that alongside the shift to more risk capital, which will also support that goal, and more upstream project development with local partners, there needs to be a focus on the world’s very poorest, and on getting capital into markets that do not currently have the capacity to support it. We have to move on each of these fronts: on global debt reform, on engagement with the multilateral development banks and our own development finance institutions, and on the private sector. Only by getting the capacity right, and by getting the work that the MDBs and the DFIs do right, will we be able to mobilise capital at scale. In my experience, WASH in particular suffers from being uninvestable for development finance, partly because the ability of DFIs to provide support at the municipal level and for city regions is underdeveloped. I urge the Minister to work with, for example, Urban 20 colleagues to address the issue.
James Naish
My hon. Friend mentioned multilaterals. I wanted to put on the record my concern, shared by a number of IDC members, that it will be much harder for us to influence the multilaterals when most of our money is going there, rather than to bilateral aid. Does my hon. Friend share my concern that we need to resource appropriately to achieve maximum leverage within the multilateral system?
Noah Law
I do share my hon. Friend’s concern. In a time of constrained resources, there is a bit of a knee-jerk reaction to move everything into the multilateral space to get more bang for our buck but, as we have seen, it is not as simple as that. One does have to be wary when trying to make that money go further. I am glad that there are examples, particularly on the climate finance front, of where our Government have stepped up to ensure we maintain the agenda of the multilateral development banks.
To sum up, we need to be serious about the potential need for a statutory footing for some of the reforms to the global debt system, which the UK is uniquely well placed to address. We need to push our multilateral development banks and development finance institutions to go further, to take more risk and do that upstream development work. In doing so, we need to mobilise the private capital that at the minute is unable to get to the world’s poorest countries.