- Restrictions to Britain’s aid support to countries affected
by crises and natural disasters that severely impact their
economy are lifted, under changes to international rules brought
about with the help of UK leadership.
- The Organisation for Economic Co-operation and Development's
Development Assistance Committee (OECD’s DAC) has announced a new
‘reverse-graduation’ mechanism, which would allow such countries
to apply for aid, to help with long-term economic recovery and
reconstruction.
- The rule change would mean countries which currently do not
qualify for aid or ODA (Official Development Assistance), could
be eligible for it in future if their economies fall below the
World Bank High Income threshold.
The UK has secured a significant change to the international aid
rules which would allow high income countries, which experience
economic shocks, caused by crises and natural disasters, to apply
to receive ODA.
It comes after the UK was the driving force for change when many
Caribbean islands, including some British Overseas Territories,
were left devastated by two category five hurricanes in autumn
2017, Irma and Maria.
At the time, there was no system in place for such countries to
automatically requalify for aid if their economies were badly hit
in such circumstances. Countries would only requalify for
aid if their economies were so badly hit, their economies dipped
under the World Bank High Income threshold.
Because of the UK’s campaign for change, the Development
Assistance Committee (DAC), which is made up of 30 leading donor
nations, has agreed a new ‘reverse-graduation’ mechanism.
This means countries that have graduated from being eligible for
aid will now be able to receive assistance if their economies
worsen and fall below the World Bank threshold.
Such countries would be eligible for aid related to long-term
economic recovery and reconstruction, rather than humanitarian
assistance.
International Development Secretary said:
“The British public are strong supporters of providing help in
the wake of disasters, including long-term reconstruction. They
want to help people, especially when they are from nations we
have close ties to
“Not being able to pay for that help from the aid budget, because
a nation’s economy was doing well, before a hurricane, earthquake
or other disaster hit, was illogical and had to change.
“Britain has never fallen short in our support of countries in
need – either through sending aid, our Armed Forces or
reconstruction support. This significant rule change means that
in future we may be able to use our aid budget to pay for that
longer term, reconstruction support
“This gives the UK more options in how it can help a nation
recover and become more resilient to shocks. I think the public
would agree that is what our aid budget should be used for.
“This is a major victory for the UK which has led the charge in
securing this change. We will continue to press for further
reforms to these important rules to ensure we are able to use the
aid budget in the most sensible way.”
Once a country reaches the World Bank’s High-Income threshold for
three consecutive years, under the OECD DAC rules they are not
considered ODA-eligible.
The new ‘reverse-graduation’ mechanism means that British
Overseas Territories and other Caribbean islands badly damaged by
hurricanes could requalify for aid in the future if their economy
is sufficiently badly affected. The rule change could benefit the
UK when it assists with the economic recovery and reconstruction
of nations hit by natural disasters.
The UK government has always been clear that in times of crisis,
nothing will hold us back from helping the British territories.
The ODA rules have not and will not hamper the UK’s response to
humanitarian crises. The new mechanism could help protect a
country’s hard-fought development gains and prevent it from
slipping into long-term economic decline due to severe natural
disasters in the future.
