Policy Updates

On June 14, 2024, the second day of the G7 Summit, Canadian Prime Minister Justin Trudeau announced nearly CAD687 million (US$501 million) to strengthen sustainable agricultural, climate resiliency, and foster gender equality in low- and middle-income countries.

Within the funding was CAD200 million (US$146 million) to IFAD, including:

• CAD100 million (US$73 million) to reduce poverty and food insecurity while strengthening climate resilience, with a focus on poor, vulnerable, and rural communities; and
• CAD100 million (US$73 million) as a repayable contribution to IFAD’s Private Sector Financing Programme to support investments in the agricultural sector in low- and middle-income countries, especially in the Americas, Sub-Saharan Africa, and Asia.

Canada also announced new funding for the Indo-Pacific region, which is home to the largest number of climate-vulnerable people in the world. Funding included:

• CAD360 million (US$262 million) in repayable contributions to the ADB to establish the Canadian Climate and Nature Fund for the Private Sector in Asia to mobilize private capital toward inclusive climate change mitigation and adaptation projects; and
• CAD7 million (US$5 million) through the IDRC to build on Canada’s existing partnership with the UK to expand the IDRC’s AI for Development program for responsible AI innovation and capacity building in the Indo-Pacific.

Lastly, Canada announced new funding to advance gender equality and the empowerment of women, girls, and LGBTQI+ people, including:

• CAD100 million (US$73 million) in the International Finance Corporation’s Facility for Gender Equality, Resilience, Opportunity, and Inclusion Worldwide, which is expected to mobilize an estimated CAD470 million (US$342 million) in private capital for investments that empower women and promote gender inclusion; and
• CAD20 million (US$15 million) to TradeMark Africa and the Centre for International Studies and Cooperation to help eliminate the gender-based barriers that prevent women from fully participating in opportunities afforded by the African Continental Free Trade Area.

On June 13, 2024, UK Prime Minister Rishi Sunak, while attending the G7 Leaders’ Summit, announced a total of US$152 million in funding across a suite of climate initiatives.

GBP57 million (US$68 million) is slated for the UK’s Climate Compatible Growth Programme. The program helps to build climate-resilient infrastructure across Sub-Saharan Africa and Asia with expert UK support.

GBP35 million (US$42 million) was announced for the Alliance for Green Infrastructure in Africa, which aims to catalyze greater finance for sustainable infrastructure.

The UK is partnering with the World Bank and the EU to support African regional electricity, providing GBP15 million (US$18 million) to the Zambian side of a Zambia-Tanzania Interconnector that will link the Southern and East African Power Pools.

Finally, Sunak announced a GBP20 million (US$24 million) expansion for the Asia component of the joint donor AI for Development program.

On June 11 and 13, 2024, the UK Conservative and Labour parties released their election manifestos, containing limited references to international development, ahead of the national election on July 4, 2024.

International development did not feature prominently in either manifesto, instead being overshadowed by domestic affairs.

The manifestos showed both stark differences and intriguing similarities on the subject of international development. Both parties committing to maintain the merger of the FCO and former DFID into the FCDO. Labour committed to strengthening the development function within the FCDO. Both parties also committed to a return to providing 0.7% ODA/GNI, but only when the fiscal circumstances allow.

The Conservative Party’s manifesto committed the party to:

• Ensuring all ODA spending is allocated in line with a strict national interest test, notably without a definition of the test;
• Working with partners to deliver the UN SDGs and tackling poverty;
• Maintaining a focus on fragile states;
• Ensuring that MDBs deliver more funds to partners in need and work to deliver debt relief;
• Expanding international campaigns on girls’ education, women’s rights and reproductive health and standing up to those persecuted for their faith;
• Scaling-up high-impact, cost-effective global health interventions, including MNCH services, nutrition, and AMR while continuing support for Gavi and the Global Fund; and
• Maintaining climate leadership while retaining the current government’s international climate finance commitments.

The Labour Party focused on modernizing UK development assistance and committed to:

• Rebuilding Britain’s reputation in international development to ensure leadership;
• Taking a new approach to partnerships with the 'global South' based on mutual interest and genuine respect;
• Ensuring UK ODA is focused on a new mission to eliminating poverty and promoting sustainable lifestyles;
• Renewing expertise and focus on key areas, including supporting economic transformation, tackling unsustainable debt, empowering women and girls, supporting conflict prevention, and unlocking climate finance;
• Driving climate leadership, both domestically and abroad, and creating a new Clean Power Alliance to lead on climate action; and
• Improving the accountability and transparency of ODA spending by working closely with the ICAI to ensure the highest standards are applied to UK ODA spending regarding ODA effectiveness, transparency, and scrutiny.

On June 7, 2024, an analysis by Carbon Brief, based on data provided by the UK government via freedom-of-information, revealed that the UK government spent GBP1.8 billion (US$2.2 billion) on ICF during FY2023/24, marking the largest yearly ICF spend since 2011.

The amount represents an increase of GBP192 million (US$230 million) over FY2022/23. Despite the record funding, the UK will need to more than double its ICF spend in FY2024/25 and FY2025/2026 to meet the UK government’s commitment of disbursing GBP11.6 billion (US$14 billion) in ICF between FYs 2021/22 and 2025/26.

Funding classified as ICF in 2023-24 was used to support the reconstruction of low-carbon power supplies in Ukraine, assist humanitarian victims in Pakistan and Ethiopia, and to fund multilateral contributions, including support to the GCF.

According to Carbon Brief, 11% of the funding, or GBP199 million (US$238 million), resulted from the UK government expanding its definition of climate finance in 2023. Experts believe this figure to be an underestimate, as Carbon Brief was not able to include all reclassified humanitarian funding in their calculations.

On May 23-25, 2024, the G7 Ministers of Finance met at a summit in Stresa, Italy, where the ministers voiced support for contributions to the IDA, WHO, Gavi, and the Global Fund in the resulting communiqué.

The G7 ministers supported efforts towards a successful 21^st replenishment of the IDA by the end of 2024 through an ambitious policy and financing package. Notably, they did not give a concrete signal that the critical US$100 billion threshold requested by the World Bank will be crossed, nor any indication of the US$120 billion expected by African leaders.

The ministers reaffirmed their dedication to strengthening the governance and finance of the global health architecture and voiced support for refinancing processes of several GHIs, such as Gavi, the Vaccine Alliance, the WHO, and the Global Fund, and expressed support for the Pandemic Fund. The communiqué called on the donor community to coordinate efforts and increase investments in global health in line with their capacities to ensure sustainable funding and maximize the impact of available resources.

Following the summit, the C7 pointed out the G7's lack of ambition and financial commitment to international development, including climate adaptation. International civil society organizations criticized the lack of any reference to allocating SDRs to global solidarity.

On May 16, 2024, international NGO Christian Aid released a new report, titled Between Life and Debt, that outlined the devastating debt crisis engulfing Africa and calling on the UK government to address the crisis through legal intervention.

The report, which draws on testimonies from Christian Aid partners in Ethiopia, Kenya, Malawi, Nigeria and Zambia, revealed that:

• Total external debt service by all African countries was US$85 billion in 2023 and US$104 billion in 2024;
• In 2023, African countries spent over 50 times more on external debt than they received in aid from the UK (and 50% more than total assistance to the region);
• 25 African countries spend more on debt than education; and
• 32 African countries spend more on debt than healthcare.

The report asserted that the debt problem is largely due to Western private lenders, who have lent to Africa at extremely high interest rates, far higher than other sovereign lenders like China. Total external debt service by all African countries to private creditors was US$39 billion in 2023 and US$47 billion in 2024, and that private creditors charge the highest interest rates of 6.2%.

Christian Aid argued that the UK government has the unique power to help remedy the crisis, given that most private creditors, due to colonial history, are governed by British law. The organization called on the UK to step up and take action to change UK law to compel private creditors to cancel debts and stop the crisis.

On May 14-15, 2024, the C7 summit was held at the UN FAO headquarters in Rome, Italy, organized by the Italian Civil Society Coalition that led, coordinated, and moderated the C7 2024 process.

Approximately 400 global representatives took part in the event, as well as international decision-makers, including FAO Director-General Qu Dongyu, Italian G7 sherpa Ambassador Elisabetta Belloni, Cardinal, President of the Italian Episcopal Conference, Pope’s envoy for the Russian-Ukrainian conflict Matteo Maria Zuppi, and Director of the UN SDG Action Campaign Marina Ponti.

The official C7 communiqué that listed the international civil society recommendation to the G7’s Leaders around seven key issues was released at the event, which included:

• Economic justice and transformation;
• Climate, energy transformation, and environmental justice;
• Global health;
• Principled humanitarian assistance;
• Peace, common security, and nuclear disarmament;
• Human mobility and migration; and
• Food justice and food systems transformation.

On May 14, 2024, Chatham House released a report outlining key foreign policy priorities for the future UK government, to be voted upon on July 4, 2024, advocating to strengthen the UK's role in international development.

The report outlined three foreign policy priorities facing a new government:

• Navigating unpredictable great power dynamic;
• Improving the UK’s relations with Europe; and
• Strengthening the UK’s role in global governance and international development.

The report underscored the strategic advantage of the UK’s membership in multilateral institutions. The authors asserted that this provides the UK with foreign policy leverage and diplomatic benefits, which is particularly important given the UK's status as a mid-sized power.

The report argued that the UK should focus on issues where it has credibility, such as international development, climate change, arms control and technology governance. It also noted that the next UK government will have to confront a more assertive development partners and global landscape. To effectively address this, the authors emphasized the need to build alliances with diverse global partners. They called on the UK to establish shared goals with partner countries, including the pursuit of genuine reform of multilateral and international financial institutions to empower development partners.

Chatham House underlined the crucial role of the UK in global development and advocated for the UK to ideally return to delivering 0.7% ODA/GNI on international development. The report described the commitment not only as a moral imperative, but also a strategic necessity for the UK to strengthen its global role.

The report suggested that the UK should, at minimum, introduce more predictability into its development spending and more clarity around the purpose of ODA spending, particularly as much of the UK foreign assistance budget is spent on IDRCs.

On May 9, 2024, UK Foreign Minister David Cameron spoke on UK foreign policy at the National Cyber Security Unit, where he highlighted that UK foreign policy is linked with ensuring the domestic prosperity and security and the UK's place in the world, noting that the UK is both large enough to make a significant impact but small enough to act nimbly and quickly when needed.

Cameron noted that the top priority for the UK is ensuring both British and global security, reiterating the UK government’s commitment to spend 2.5% of GDP on defense by 2030 and committing 5% of the spending to defense R&D.

Cameron went on to note that a close second priority was standing up for British values of freedom, human dignity and human rights and supporting the multilateral system that upholds these values. He highlighted how much more funding the UK provides to tackling malaria via the Global Fund than Iran, and how much more the UK spends than Russia on funding the UN Central Emergency Fund for humanitarian disasters. Cameron also emphasized the UK's generosity as a donor to the GCF to support oceans and biodiversity.

Cameron expressed pride in the UK’s recent International White Paper and its drive to support the UN SDGs, reform MDBs, and enhance cooperation with the private sector.

On May 2, 2024, the UK government responded to the ICAI, the UK’s aid watchdog, recommendations for tackling fraud in UK ODA funding.

The FCDO thanked ICAI for reviewing the UK's approach to combating fraud in ODA funding released earlier in 2024. The FCDO partially accepted ICAI’s first recommendation to take a more robust and proactive approach to anticipating fraud. The FCDO noted that it was actively exploring the cost-effectiveness of creating an FCDO Fraud Intelligence Unit and was expanding its Fraud Liaison Officers’ Network to strengthen oversight.

The FCDO also partially accepted the second recommendation to strengthen its fraud in its top 20 ODA recipient countries, noting that it will reinforce the mandatory annual assurance assessment across control and risk areas and expand its Fraud Liaison Officer's network.

The FCDO fully accepted the final two recommendations, which called for new fraud management guidance to be written for capital investments and to increase the Head of Mission’s oversight and accountability for fraud risks relating to centrally managed and other government programs.