Strategy for International Development

Liam Byrne Excerpts

Wednesday 6th July 2022 Commons Chamber

[Sarah Champion (Rotherham) (Lab)]

Thank you, Madam Deputy Speaker. It is always a pleasure to serve under your guidance. I also wish to thank the Backbench Business Committee for granting this debate on the spending of the Foreign, Commonwealth and Development Office on the strategy for international development.

A year ago, I stood in this Chamber to open an estimates day debate on the FCDO’s main estimate. At that point, the Department had recently changed the format of its spending plans, which made scrutiny incredibly difficult. I wish to take this opportunity to thank FCDO officials who have worked with House of Commons staff over the past year to restore and improve the quality of information available in the estimate, allowing my Committee and Members to fulfil their crucial role in holding the Government to account for how they spend their aid.

Much has changed since I made that speech last year, but one in 10 people around the world are still living in extreme poverty. That simply cannot be right. Today, I wish to reflect on the enormous potential that lies within the poorest communities in the world and on how the UK Government’s aid spending should seek to develop that potential, transforming lives and creating a fairer, more inclusive world for all.

In the past few weeks, we have finally seen the Government release their new international development strategy. Combined with this main estimate, the approach signals a new era in how the UK spends its development funding, but I am simply not convinced that this approach will help the very poorest people in the world. It is clear that the Government’s priorities are increasingly about trade, security and creating British jobs, but the legally mandated objective of UK aid spending is to reduce poverty. That must remain front and centre.

The Government’s plans described a more hard-nosed, investment-driven approach to UK official development assistance. Capital investment expenditure—spending that is used, for example, on infrastructure projects—has increased by 49% compared with the last financial year, but relative day-to-day spending, from which traditional aid programmes would typically be funded, has increased by only 8.5%.

Investment partnerships are becoming a more dominant feature of UK aid. British International Investment will receive a further £200 million in capital from the FCDO, and the amount of funding channelled through BII is set to increase dramatically over the next two years. Economic and investment-led development certainly has a place in any coherent development strategy, but it tends to benefit those who are engaged, or are able to engage, with the formal labour market. I am not convinced that this approach will help the poorest and most marginalised groups around the world. I am just not convinced that it will help them to achieve their potential or create long-lasting development in their communities.

Putting all of the UK’s development eggs in the economic basket will mean that swathes of people are left behind: disabled people, minorities, and women and girls. How does the FCDO’s approach help them to reach their potential and enrich their communities? I have no doubt that UK investments can fund and support some truly transformative projects. However, we need to get the basics right first, otherwise how will those projects succeed?

Investing in new roads does not help a girl who cannot access clean water. A new telecoms network is not much use to a boy who cannot get vital vaccines. We need basic support in place first, before those investments can succeed. Get the foundations right, and then development will flourish. Under DFID, it was clear how UK aid was working towards the attainment of the UN sustainable development goals—the map to lifting people out of poverty and keeping them out of it—but this strategy barely refers to the SDGs.

It is hard to know whether we are on the right path to development without the map that the SDGs provide. With the integration of development and wider foreign policy objectives, helping the poor increasingly seems to be seen as a by-product of British foreign policy, rather than an end in itself. In fact, this Government strategy has no qualms about UK aid being “overtly geopolitical”. The strategy seeks to actively draw lower income countries away from the influence of authoritarian regimes, and to promote freedom and democracy around the world.

However, what about the communities living in countries that are not a pressing priority for achieving a foreign policy aim, or whose Governments do not share UK objectives? Are we leaving those communities behind? What happens to their potential? In my Committee’s work, we have heard that different types of development problems require different approaches. Sometimes spending through bilateral programmes is effective, and sometimes putting funds through multilaterals—such as Gavi, the Vaccine Alliance, or the World Food Programme—is more effective. We need to use the right tools for the job.

The UK is stepping back from its commitment to multilateral co-operation and placing more emphasis on bilateral spending. The Foreign Secretary told my Committee that, in 2022-23, £3.7 billion of UK aid funding will be spent through multilaterals. By 2024-25, it will be £2.4 billion—a 35% reduction in just two years. The UK’s contribution to major multilateral institutions means that we generate goodwill and we also have a huge influence over the way global institutions spend tens of billions of dollars each year.

Our multilateral investments are also a lever in investments from elsewhere, meaning that they have a multiplier effect, but the UK will be reducing its contribution to the World Bank by an astonishing 54%. If the UK is looking to increase its influence on the global stage, it seems counter-intuitive to step away from that leadership role.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I am grateful to the Chair of the Select Committee, who is making a brilliant speech. Does she agree that it is in Britain’s interests to use multilateral institutions, rather than to simply donate bilaterally, because that multiplies the impact that we can have?

[Sarah Champion]

My right hon. Friend is absolutely correct. At a time of such international uncertainty, a policy of giving away influence and friendships that have taken decades, if not centuries, to build up seems a very strange way to further the interests of this country, let alone the poorest in the world.

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[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

It is wonderful not to be on a four-minute time limit for a debate as important as this. I draw the House’s attention to my interests as set out in the Register of Members’ Financial Interests.

The Foreign Secretary has inherited a complete mess on development, and I have great sympathy for her in trying to bring some order to things. We are, of course, still spending a very substantial sum on ODA as part of our development budget. However, that sum has reduced from 0.7% to 0.5%, and I want to say a word or two about that.

If someone was looking for the least good time to reduce this expenditure, they would definitely have chosen the date and the day upon which the Prime Minister made that decision. It was in the foothills of Britain chairing the G7 and at the time of an international global pandemic. Development leadership was really needed, and Britain was in a position to provide it. Britain was acknowledged around the world as an international development superpower and was really in a position to move the dial on these things. But what happened? The Prime Minister reduced ODA from 0.7% to 0.5%, at the very time when British leadership was really needed. Of course, the Prime Minister had also dismantled the Department for International Development, and I will come on to that in a moment, but the point I am seeking to make is that, at a time when Britain could have given real leadership—in one of the few areas where it is acknowledged, post empire, that we are a superpower and have real leadership and skills to impart—the money was reduced.

Following the pandemic, we see the scourge of famine affecting parts of our world such as the horn of Africa and all the way down the rest of the eastern side of Africa. The right hon. Member for Leeds Central (Hilary Benn), who is a former Secretary of State for International Development, will remember the acute leadership that DFID gave, leading other countries to stop famines and starvation in the horn of Africa. That skill has never been more needed than it is today, as we stand before a real threat to people’s lives and livelihoods, but Britain is not in a position to give that leadership.

I will make two further points on the money. I do not think I will carry the Chair of the Select Committee with me here, although I pay tribute to her leadership of her Committee and the very good work that the Committee is doing, but my advice to the Foreign Secretary, given the complete mess on Britain’s development policy, was to find the money from the multilateral programmes and not from the bilateral programmes. If she is forced to make that decision, a decision she should never have had to make, it is clearly right to take the money from the multilateral programmes, for the same reason that Bonnie and Clyde robbed banks: that is where the money is.

The big multilateral programmes such as the World Bank are where the money is, and the Foreign Secretary is therefore in my view right to take it from there, but that is not a decision she should have had to make.

[Liam Byrne]

rose—

[Mr Mitchell]

The effects of taking money from the World Bank are very severe, as I suspect my friend the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) is about to make clear.

[Liam Byrne]

I am grateful to the right hon. Gentleman, my neighbour, but I disagree with him on this point. With the International Monetary Fund, for example, where we have collectively issued $650 billion of special drawing rights, it would have been sensible for the UK to have stepped up and provided some leadership, sharing a much bigger fraction of the £19 billion we have been given. That would have encouraged the rest of the G7 to follow suit, and the G7 is about one third of the SDR issuance.

[Mr Mitchell]

On that point I completely agree with the right hon. Gentleman. Although I do not want to put words into the Minister’s mouth, I suspect that the Foreign Office wanted to do precisely as the right hon. Gentleman has described, but the Treasury made it extremely difficult. My point is that the savage cuts made to the bilateral programmes, where food was literally removed from the plates of starving children in Yemen, show why, in the end, if the Foreign Secretary is forced to make such decisions, she is right to take the money out of the multilateral programme.

While I am on the subject, Britain has had a leadership role within the Global Fund, along with the Americans. After 2010, we made a number of substantive changes to make the Global Fund better. It is extremely good spending, for reasons that the Minister will be well aware of, and I urge the Government to ensure that we are as generous as possible on the replenishment of the fund, not least because the Americans have made it clear that they will be even more generous than they are already being if other countries put their money where their mouth is. There is a real incentive of getting far more bang for the British taxpayer’s buck in helping with the replenishment of the Global Fund.

My other point about the money, and again I hope the Chair of the Select Committee will forgive me for making it, is that I do not believe it is sensible to go in one year from 0.5% to 0.7%. The Chancellor has already committed to bringing back the 0.7% in two years’ time. The year before that, he should go to 0.6%. I say that for two reasons.

There is quite a lot of money involved, and although there is no doubt we could spend it well through the multilateral system, I do not think the British taxpayer would believe that such a big uplift in one year could guarantee that the money was really well spent, and I do not want to test their patience on this. I want to make sure that we can look the British taxpayer in the eye and say that, for every pound of their hard-earned money that we spend on international development, we are delivering 100p of value on the ground. I urge Treasury Ministers to consider bringing back the 0.6% next year and the 0.7% the year after, and not doing it in one lump, which I believe is the current plan.

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[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Let me declare my interest, at the outset of this debate, as the chair of the international parliamentary network on the World Bank and the International Monetary Fund. I congratulate the Chair of the Select Committee, my hon. Friend the Member for Rotherham (Sarah Champion), on bringing this debate to the House. Her timing, as ever, is impeccable. All of us here in this Chamber are watching the disintegration of the Government in real time, so in a way this debate is important because it is taking place at a hyphen moment between an Administration that are biting the dust and the construction of the new Administration that will no doubt take shape over the days and weeks to come. Like everyone who has spoken in this debate, I very much hope that the new Administration will look hard at the arguments we have made today and seek to reverse the appalling policy, the appalling cut and the appalling breach of trust represented by the slash in our aid budget.

I want to supply three thoughts for today’s debate. The first is that at the heart of it is the simple truth that when the world needed us to step up, we stepped back. We stepped away from our obligations, we stepped away from our duties and we stepped away from our promises. Those promises were enshrined when we signed up to SDG2 and made a commitment to end hunger. Not only has breaking our promise to help to supply the finance for that destroyed trust in our country around the world, but people will die this year as a result of that broken promise.

Many people here today have said that that decision could not have come at a worse time. The right hon. Member for Sutton Coldfield (Mr Mitchell) was among those who made that point, and he is absolutely right. We now have a crisis of food, fragility and finance that means that 200 million people around the world are facing a food emergency. We know that 60% of workers are still not earning what they did before the covid crisis, but we now have millions of people living almost in famine conditions and 200 million people who will face famine later this year unless things change. Things will change over the course of this year, but they will change for the worse.

Just a week or two ago, I was with the Foreign Affairs Committee in New York and we were privileged to see the NATO Secretary-General. He is fighting tooth and nail for the deal to try to get tens of millions of tonnes of grain out of Ukraine and Russia and, crucially, tens of millions of tonnes of fertiliser out of Russia. If we fail in that task, the spike in food prices that we have seen over the last year will get worse. Even more seriously, if we do not get the fertiliser out in the next few months, we will jeopardise not just the wheat harvest for next year but the rice harvest for next year. We will begin to see up to 1 billion people face a food crisis if we do not make progress on that deal. People were already in a bad position because of covid, and they are in a bad position because of inflation, but it has now deteriorated substantially because of the crisis in Ukraine.

Governments around the world are out of headroom on taking the fiscal measures needed to alleviate this coming crisis. More and more developing countries now denominate their debt in dollars rather than domestic currency, which means they are super-exposed to rising interest rates in the United States. Average interest rates on lower-income debt are up by about 77 basis points this year, and we now know that something like 12 countries around the world are already on the brink of debt distress. We already see unrest in some countries in Africa, and we see the consequences of the debt crisis in Sri Lanka. Things will become far worse this year unless we get our act together.

Of course, the problem is most acute in countries that are fragile and where there is violence. Frankly, countries and agencies such as Russia and the Wagner Group are already perpetrating barbaric human rights abuses in Mali, Libya, Syria and another 18 countries around the world. This crisis of food fragility and finance will not sort itself out, which is precisely why this is such an appalling time for the Government to make their aid cut.

My second point is a particular interest of mine, which is that the Government’s negligence is all the worse because they are not using the new tools they have been given. Last year, under Kristalina Georgieva’s leadership of the International Monetary Fund, the global community took the collective decision to mint $650 billion-worth of special drawing rights. Overwhelmingly because of the quota system, those special drawing rights go to richer countries like us. In fact, the special drawing rights coming to G7 countries total about $196 billion, which is about a third of the special drawing rights that have been issued.

Where are those special drawing rights? Where is the deployment of that resource to tackle this crisis of food fragility and finance? Right now, those SDRs are gathering dust in the vaults of central banks and treasuries around the world. They are just sitting there. We have failed to mobilise that resource in the way we promised when we signed off on the commitment to issue the special drawing rights in the first place.

The UK is a big shareholder that helped to found the International Monetary Fund, so we have been given £19 billion of special drawing rights. We have made commitments to share back about 20%. Why is 20% the magic number? We have just been given £19 billion. This is a slightly technical issue, but our SDRs go into something called the exchange equalisation account, which was set up in 1979 and underpins currency stability in this country. It has been restocked with £74 billion over the last 10 years to a level that the Treasury deems to be capital adequate, about £154 billion or $185 billion in total.

We have restocked the exchange equalisation account and then, from left field, comes another £19 billion that we did not forecast and that we do not need because we have already restocked the account. Why have we suddenly decided to share just 20% of it? There is no logic for that percentage.

The Government have so much grip on this topic that, when I asked the Foreign Secretary at last week’s Foreign Affairs Committee how much had actually come in through the special drawing rights, she did not know. She literally did not know that Her Majesty’s Government had just been handed £19 billion, which is twice the aid budget. I then prosecuted the argument and asked, “What is your target for sharing? How much are we supposed to share back?” She answered, “I don’t know.” I asked the Prime Minister the same question this week, and he did not know either. They could perhaps be forgiven if the numbers were not so big and if the crisis were not so serious, but this is absolutely crazy. We have a global crisis and the Government are simply not in control. They do not have a grip on sharing back and rechannelling some of the biggest assets and resources available to us.

The point about multilateralism, which my right hon. Friend the Member for Leeds Central (Hilary Benn) and my hon. Friend the Member for Rotherham (Sarah Champion) mentioned, is fundamental. Last week’s G7 communiqué made a very clear statement that G7 leaders want to step up the mobilisation of $100 billion, but the truth is that, of the G7 countries, we have made a commitment, Japan has made a commitment and the French have made a commitment. Congress has blocked the President of the United States sharing $21 billion, and we do not yet have information from the IMF on the others—I checked yesterday. So we are miles away from mobilising the $100 billion that was promised at the G7, and people are going to starve this year unless we get a grip. So my call on the Government today is to give us a good explanation for why we should not be sharing three quarters of the special drawing rights we have been given; why we are not leading a global effort to get to that $100 billion target; and why we are not insisting on more flexibility, such as giving the SDRs to multilateral development banks, such as the African Development Bank, which could be making such an impact on the ground. We need to be saying to the IMF that countries do not need to participate in a conditionality programme with the IMF in order to receive some of this money. I discussed that with the Secretary-General of the UN and we both agree on it. We are not going to lead the mobilisation of this effort if the politicians in charge at the helm are, frankly, in such a shambolic state. So my message to the Minister and the new Administration is: please get a grip of this enormous new resource that we have been given.

My final point is, in part, inspired by what my neighbour the right hon. Member for Sutton Coldfield (Mr Mitchell) said about China. For some years now, we have been having a debate in this country and among our allies about the influence of China and this vexed, significant issue of debt diplomacy. If we look at the countries that did not support the UN resolution on Russia, we see that, on average, they owe five times more debt to China than the countries that supported the resolution. As for whether that is a coincidence, you be the judge. The point is that the debt in many of these countries is about to fall over and the G20 common framework process, which we have held up as the great saviour of debt sustainability, has been so successful that precisely zero countries have engaged in it. So it ain’t working and we need a different approach. We could be restructuring developing country debt using IMF and World Bank resources. The World Bank has just committed $170 billion to an emergency programme that we could be using to restructure the debt of vulnerable countries around the world—right now we are simply not doing that. If we do not want to live in a world where China is the lender of last resort to countries around the world, let us use the Bretton Woods institutions that we set up in 1944 to avoid that dilemma.

In the midst of a big war, in 1941, the Atlantic charter was signed, and its story is extraordinary. Our Prime Minister at the time, Mr Churchill, was on the other side of the Atlantic with President Roosevelt and the draft of the charter was sent to Downing Street. Clement Attlee was in the Chair and he convened the Cabinet at two o’clock in the morning in order to review the draft and make one vital change. He added article 5, which said that one of our war aims would be that the victors would

“desire to bring about the fullest collaboration between all nations in the economic field with the object of securing, for all, improved labor standards, economic advancement, and social security”.

Three years later, at Bretton Woods, President Roosevelt, welcomed delegates from 44 countries from around the world with these words:

“the economic health of every country is a proper matter of concern to all its neighbors, near and distant.”

As we begin to think about what the new world looks like, those are wise words to guide us.

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[Vicky Ford]

I will try to address some of the comments. I will come to global health budgets, which my right hon. Friend raised.

The global pandemic was in nobody’s manifesto. We faced the worst economic contraction for more than 300 years. Our borrowing in 2021 was the highest that it has ever been outside wartime. It was a really difficult decision to reduce the ODA spend from 0.7% to 0.5%, but it is a temporary reduction and we are still the third-largest donor in the G7 as a percentage of GNI that we spend. We are committed to returning to 0.7% as soon as the fiscal situation allows, and we have set out the way in which that will be measured.

Looking at the next decade and beyond, the international development strategy recognises that the evolving development landscape is characterised by many major global challenges and shifting geopolitics. For many years, increasing openness, free markets, free trade and shared technology have helped to underpin global development progress, and that is important in being able to make sure that those in the developing world can try to access some of the opportunities we have. However, that whole era of progress has been completely challenged and set back by the new geopolitical context demonstrated by Putin’s illegal, unjustifiable and brutal invasion of Ukraine, which is causing these huge spirals in fertiliser, food and fuel prices.

My hon. Friend the Member for West Worcestershire (Harriett Baldwin) was absolutely spot-on when she spoke about Russian misinformation. It is really important to remind ourselves as well as others that the UK sanctions in place are not preventing exports of Russian grain and fertiliser to third countries. It is Russia’s illegal blockade that is preventing Ukrainian grain from leaving the country, and that is what is hurting global supplies. The economic pain hitting the world’s poorest most acutely is being caused by Putin’s aggression.

The new hon. Member for Tiverton and Honiton (Richard Foord), in his maiden speech, quite rightly spoke about reminding everybody of the importance of the Budapest convention, when Ukraine gave up what I believe was the world’s largest collection of nuclear weapons in return for the promise that Russia, as well as others, would respect its territorial integrity. We absolutely stand by the people of Ukraine in many ways. We are one of the leading bilateral donors. We have committed about £400 million in economic and humanitarian grant support, which is in addition to about £800 million in guarantees on World Bank lending to Ukraine. We are using a lot of guarantees to increase the amount of funding we can make available.

The right hon. Member for Leeds Central (Hilary Benn) asked whether we are adhering to international laws and what constitutes ODA, and I am very pleased to say that we are. The rules are set out by the OECD’s development assistance committee, and the DAC definition of ODA makes it very clear that no military equipment or services are reportable as ODA, so I hope that answers his question.

My hon. Friend the Member for West Worcestershire mentioned the importance of making sure that UK branding is included in what we are doing, so that while we are supporting developing countries, people know that the UK is standing beside them. I absolutely agree with that, and I would also say to Members in this House who care so passionately about international development that it is important that they remind people what good work is done with the money the UK taxpayer spends there.

I have attended the World Bank meeting—we do attend these meetings, and I regularly attend international meetings—and encouraged the World Bank to be giving a clearer message about the support it is giving and reminding those in donor countries how important this is.

[Liam Byrne]

The World Bank has just mobilised $170 billion of emergency response to the current crisis, but the first question everybody I have spoken to in the World Bank over the last year is: why on earth has the UK cut its commitment to the World Bank when we could be using that to mobilise more money in the future?

[Vicky Ford]

I am so glad that the right hon. Member has raised this point because the UK remains one of the top six largest shareholders of the World Bank. We are one of only six countries in the world that has its own voice at the World Bank spring and autumn meetings, and we use that very powerfully. We remain the third largest donor to IDA20 and we remain the fifth largest shareholder. We reduced our donations to IDA, bringing them in line with what we are doing elsewhere in the world through the international development strategy, but we remained the third largest donor. Indeed, the World Bank announced that it would release $170 billion at the spring meetings partly because the UK worked with our partners to say to the World Bank, “We are in unprecedented times and we need an unprecedented package.”

My right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) raised in his excellent remarks the situation in the horn of Africa, which is absolutely dire. The UK was one of the first to step up. In January, I was in the horn of Africa and announced additional money, which was, as the hon. Member for Dundee West said, especially to help babies, children and feeding mothers. Since then, we have helped to convene an international conference and worked with the UN to have a roundtable that raised another $400 million. We will be putting more than £150 million of humanitarian aid into east Africa this year. To follow up the question from the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) about the World Bank, we have been encouraging it to put some of that $170 billion urgently into the horn of Africa.

[Liam Byrne]

rose—

[Vicky Ford]

I will make some more progress, because I want to answer many other questions.

Major global challenges are threatening the progress made over previous years. We had seen progress, especially in the last decade, but that has reversed in the last two years, which is partly to do with covid and partly to do with climate change. In that context, it is really important that our international development strategy provides a clear framework to enable people and countries to take control of the future.

Yes, a priority of the strategy is to deliver reliable investments through British investment partnerships, building on the UK’s financial expertise and the strength of the City of London. That is a way in which we can help, using Government—taxpayers’— money to bring more money into developing countries. That must be done in a way that also delivers on green priorities and supports countries to grow their economies sustainably. A key aspect of that is helping countries with the lowest incomes to build their trade capacity and infrastructure. That is not about putting all of our funding in the trade basket; it is about looking at ways in which we can harness investment to make a real difference for countries.

For example, I was in Sierra Leone earlier this year—I have visited 14 African countries since I took on this role, and Sierra Leone is one of those that most needs international development assistance—and one project that I saw was a solar microgrid. We have 95 of them going up across the country, and they are helping more than 300,000 people to get access to electricity. That means that kids can do their school work in the evening, that a sole trader can run her business and get herself an income and livelihood and, most importantly, that local services can get access to electricity. In the same town, I visited the women’s health clinic that we helped set up, where we have worked on training for those delivering babies and on bringing in oxygen services, blood bank services and electricity. That has reduced maternal deaths from one in 25—one in 25 women having a baby was dying—to one in 250. Putting infrastructure investment into that microgrid enabled the oxygen services and blood to be kept in the fridge. That helped to save lives and meant that lights were on when women were delivering their babies at night. As all of us who are mothers know, many women choose to have their babies at night—I have gone slightly off my speech.

Another priority is to empower women and girls. We want to tackle the social, economic and political structural barriers that hold them back, and unlock their potential. Indeed, restoring the funding for women and girls has been a key priority for the Foreign Secretary. I cannot put back the money that was not restored last year, so, in answer to the hon. Member for Putney (Fleur Anderson), the funding is being restored going forward, and it does include areas such as sexual and reproductive health and rights. I believe that that is absolutely central to women’s and girls’ fundamental right to have control over their lives and bodies.

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[Vicky Ford]

Let me try to address hon. Members’ questions first, because I have only another few minutes and Members have been sitting here throughout the debate.

I thank my hon. Friend the Member for Mid Derbyshire (Mrs Latham) for her passionate discussion of neglected diseases, including podoconiosis, which she now knows is a new one to me. What she said was very moving, and I will look into it further—what she said was very moving—and I reassure her that we are reviewing the Global Fund seventh replenishment investment case. I hope that that gives her the confidence she needs.

Our development priorities will be achieved by taking a patient approach to development. That means unlocking the power of people, ideas and institutions and tackling the causes of crisis, as that is the basis for delivering lasting growth, stability and poverty reduction. This is about getting the system to work.

Alongside ODA, we harness trade, defence, diplomacy and other UK strengths to work for lasting policy change in partner countries. We spend more of our budget directly. By 2025, the FCDO intends to spend about three quarters of the funding allocated in the current spending review through country programmes. That does not mean turning our back on multilateral partners. We will maintain a wide range of partnerships with multilateral organisations. They remain key partners for achieving shared objectives and tackling global challenges that the UK alone cannot solve. Geographically, we maintain our commitment to Africa, while we continue to focus on the Indo-Pacific, including by expanding the work of British International Investment in the region.

On the commitment to Africa, we are committed to building partnerships with African countries, leading to a freer, safer, more prosperous, healthier and greener continent. We prioritise key strategic partners such as South Africa, Nigeria, Ethiopia, Kenya and Ghana. We will target how we spend resources in fragile states or countries that need extra support, and we partner with the African Union when we see that our interests align and add value.

One of the questions from the Liberal Democrat spokesperson, the hon. Member for Oxford West and Abingdon (Layla Moran), was about Ethiopia. In the last financial year, we spent roughly £240 million of ODA in Ethiopia. That is about 7% of the entire UK spend. Ethiopia is a very important country. It is a very fragile state, particularly with famine in the south and conflict in the north. We have consistently called on all parties to work towards the ceasefire, which remains very fragile. Aid is flowing. It is not enough, but large proportions of the aid that is flowing is going on trucks that have been bought with UK aid, because we are one of the key contributors in that area.

[Liam Byrne]

I hope that the Minister may come on to not just the £10 billion of the aid budget, but the Government’s strategy on the £19 billion of special drawing rights.

[Vicky Ford]

Let me come to the special drawing rights; I was about to go through more of the specific questions that Members asked. We have committed to channelling up to £4 billion of our special drawing rights. The first £1 billion has already been committed as additional funding to the IMF’s poverty reduction and growth trust. In addition, the Chancellor made a commitment in April this year to allocate another £2.5 billion to the new IMF resilience and sustainability trust. That fills a crucial gap in the IMF’s toolkit. It provides affordable financing to low-income and vulnerable middle-income countries to address long-term challenges.

At the African Development Bank meetings that I attended in Ghana this year, I also explained that I was very keen to channel some of our SDRs through the ADB. Technically, the money does not come to us—it remains a shareholding in the bank. We cannot do that by ourselves; we have to do it collectively with some of the other owners of SDRs. I say that just to update the right hon. Gentleman that we are working on the matter. There are some technical issues as well.

[Liam Byrne]

Will the Minister give way?

[Vicky Ford]

No, because I want to get on to some of the right hon. Gentleman’s other points.

On ICAI, the budget is not actually reduced; it was to be a flat budget. In line with the framework agreement, we will consult with the International Development Committee if any changes to ICAI’s budget will have a significant impact on the Committee’s work plan. With ICAI, we will also work through whatever funding gap it may have, to understand what the impact could be.