The US government halted USAID funds, impacting thousands of jobs and projects worldwide, especially in Africa.
This has left a void in international development, with the UK now also cutting its aid budget.
Transcript:
Rory Stewart
See me for breakfast completely shattered because uh if we put the clock back 10 days ago the united states government announced that it was stopping all usaid funds worldwide cut all Its contracts and laid off stuff i mean it's not a sort of temporary halt while they look at things what they've actually done and you know i was talking to a lot of USAID staff who'd lost Their jobs. As you pointed out, I think on the show, we've gone from thousands of USAID staff focused on programs in Africa, and it's been reduced to 12 people. And that's just the core of USAID. The entire rest of the American aid infrastructure is collapsing along with it. So a lot of the development aid in the US was delivered by these big partners. It's not relevant for listeners, but people like DAI, Comonix, and thousands of other partners, but also huge numbers of partners on the ground. So there was a big, under Samantha Power, who was the head of USAID, big localization agenda. So there were enormous numbers of local NGOs and people employed on the ground. Also, enormous numbers of people employed in other governments who were funded by American taxpayer money. Now, that all stopped. So that removed about $40 billion overnight from the international development system. But the hope was that Europe and the UK in particular would step up to fill the gap. Because when I was in charge of DFID, which was the UK development thing, we had a budget of about, in US dollar terms, about $20 billion a year. And as the man I had breakfast with this morning pointed out, was the us and the uk if you remove the us and the uk from the international development system there's not a great deal left I mean there are other bits european union does stuff uh japan does stuff germany does technical assistance but as you've often pointed out it was one of the few ways where the UK was really Punching above its weight, where it really was a development superpower. We were the first really big country to make it to 0.7% of our GDP on international aid spend. And we did it cleanly. We didn't do it by re-describing in those days in the way that Germany was doing a lot of internal programs as being external aid. We did it with relatively few staff. Now, I can talk about what that then means, but what we're really talking about is that Keir Starmer, based with the collapse of the old US-based system and all that meant for some of the Poorest countries in the world and what it meant for climate and crisis. Instead of stepping up with European partners to fill that gap, he's decided to cut. And so it looks at the moment on the current figures coming out as though in practice, UK development spend will be less than a third in real terms of what it was when I was running the department As recently as 2019. (Time 0:02:59)
Broken Promises
Keir Starmer's previous support for international aid contradicts the current cuts.
This broken manifesto commitment raises questions about alternative funding sources.
Transcript:
Alastair Campbell
Mean, the other point I'd like to make, and I think it was Politics Joe who I follow, and they did quite an interesting compilation of all the times that Keir Starmer has stood at the dispatch Box and explain why it is a good thing that we the UK invest properly in international aid and development and he did that against successive conservative prime ministers and I actually Think the arguments he was making are still right I think that when he made the case, as Tony Blair and Gordon Brown and others had done before him, that investing properly, investing In international aid and development and some of the poorest and some of the most war-torn and climate hit and all the rest of it, all the problems that these countries are facing, that Our investment in them actually in the long term is good for them, but it's also good for us. And I think that's an argument that we were proud to make for a very, very long time. And so we've now sort of upended that. And also the other thing to say, Roy, is I think I've been quite impressed by the extent to which the government has actually constantly been saying, you know, we don't want to break our Manifesto promises. So that's why we can't think about the customs union. That's why there are certain tax rises we can't make. But this is a manifesto commitment that is fundamentally broken. And I think when people say this is, I saw Caroline Lucas, the former Green Party leader, being interviewed about it, and she said, you know, it's all very well to say this is a tough choice, But actually, of all the choices that you could make to find the additional spending, given the way the debate is in the country right now, maybe it's not that tough a choice. Now, you and I, and lots of other people have been talking to us, and, you know, we mentioned David Miliband yesterday, I hadn't quite realized USAID is going to take hundreds of millions Out of the charity that David runs. That is real money on real projects around the world. And there will be projects around the world that are dependent on UK funding right now that will be, frankly, in a state of complete panic. (Time 0:06:12)
Global Impact of Aid Cuts
The UK's aid cuts, alongside other nations, create a void in international development.
This reduction in aid impacts various areas like humanitarian aid, economic development, and global health.
Transcript:
Rory Stewart
To the big picture. It's very, very important to understand that as the UK is doing it, other countries are doing it too. So the Netherlands has just announced a radical cut in its own development aid. Sweden has been reducing its development aid. France, having been on a path towards 0.7, came away from it. More and more of the money that's spent by partners is spent on internal stuff. So we are really talking about something that's really difficult to imagine. Yesterday, we were talking about trying to imagine what Europe and Russia would be like without American security guarantees. I don't really know what that's like. It's very difficult to think because it's been 80 years. This thing is equally completely uncharted. Nobody's run the experiment before of what happens if you suddenly stop the two major international development funders in the world from operating. But let me try to sketch out the different things that these agencies do. So, and maybe one way to do it is just to think through the different departments that I had when I was running DFID. The first obvious one is humanitarian. So a lot of this money went quite literally to deal with starving people. So I stood in Somaliland, I watched mothers carrying babies for two weeks across the desert and arriving with one baby dead and the other one alive. And that's a lot of what, you know, we talk about David Miliband losing three, 400 million out of the International Rescue Committee. And of course, Musk will say it was a grift and somehow suggests that was his own personal money. No, what IRC was doing was providing plumpy nut, which is a type of nutritional supplement to keep babies alive. So that's the first thing that will happen. When there is a humanitarian catastrophe, and they happen quite a lot, let's say there's a tsunami or there's an extended drought, and hundreds of millions of people are on the edge Of famine, And the UN go and make an appeal and say, we need the money. You know, this often happened. Someone would land on my desk. There's a big one and a half billion pound appeal for a crisis in Somalia. And I was able to say, OK, Britain will contribute. You know, and often we were able to put in, let's say, a couple of hundred million, and the US would put in a couple of hundred million. So that's one thing. I'll accelerate. I got too deep into that one. Second thing we did is a lot of economic development with countries, including trade development. So we worked on getting the borders and the customs sorted out between East African countries to create a free trade zone. We provided technical assistance to their governments on finance and taxation, which was often revolutionary. I mean, a very small amount of money we spent in Myanmar completely transformed the taxation revenue of the government. So the government ended up getting about 30 times as much money as we'd put in and became more self-reliant. Civil war. A lot of the money we put in is helping very fragile poor governments deliver services. And when that money is whipped away, those governments come very close to collapse. And we've seen this across the Sahel. Migration. What were we doing with the money? Well, lot of the money was making sure that five million of the people who left syria didn't come to europe because we funded jordan lebanon and turkey to host them and you saw those camps In lebanon when we when we crossed that border and finally global health um a lot of the stuff that i was doing was around global health and so when ebola takes off in um congo or on the Uganda Border, it was the US and the UK who were funding the surveillance systems, which picked up early signs of it spreading. And what does the surveillance system mean? It means people. It means thousands of Congolese and Ugandan health workers tied into quite complex systems, which ultimately help protect the world from the development of these pandemics. (Time 0:08:20)
Alternative Funding
Labour's tax strategy limited its options for funding increased defense spending.
A wealth tax could have been a viable alternative to cutting aid.
Transcript:
Rory Stewart
Yeah. And, you know, we've often said that it was regrettable that Labour tied its hand on taxes before the election and then forced Rachel Reeves to raise employers' national insurance, Which was probably the worst kind of tax she could raise. When in fact, the big taxes, VAT, corporation tax, income tax were the ones where she should have been working. And this could have been an opportunity to do that. We could do wealth tax. And I think I agree with you. There's a big argument for targeted wealth taxes. This also would be a very straightforward argument for saying to the British people, the world's changed. We're in a much more dangerous world. And there are other forms of taxes we put up. I think the other thing that we're missing here is that development is not totally separate from defense and security. (Time 0:14:55)
Geopolitical Implications
Reduced UK and US aid creates opportunities for China and Russia in Africa and other developing regions.
This shift in influence affects key resources and geopolitical alliances.
Transcript:
Rory Stewart
Mistake also, because what we're doing is we're giving a huge space for China and Russia. So when I was the African minister in 2016, nine years ago, British investment into Africa was still a third higher than Chinese investment into Africa, one very long ago. And US and French investment was ahead. Today, Chinese investment completely dwarfs. We have had a situation where, as we've talked about in Chad, Niger, Mali, Burkina Faso, Gabon, there have been these military coups right the way across the Sahel. And in almost every case, Western allies like the US and France have been driven out and Russian Wagner mercenaries have come in. So the Russians have private security companies now in dozens of countries in Africa, and the Chinese have private security companies in dozens of countries in Africa. China is taking control of lithium, cobalt, nickel, rare earths from places like Congo, which are absolutely vital for the future, energy revolution, for electricity, for the future Of computing. And we are creating a vacuum by the US and the UK leaving. And it's a vacuum that began under Boris Johnson. So we went from, in practice, about £4 billion a year of bilateral aid into Africa, which would mean that in many African countries, we had £100, £150 million to play with when we were Negotiating with those governments, supporting those governments, influencing those governments to work with us on global trade, on Ukraine, on health, towards a world in which We will now have 5, 10 million pounds. And that sounds odd because people listening will be like, wait a sec, they've just cut the budget by you know 75 from 0.7 how come you're talking about a 90 cut this leads to um another Point which i'd like to get onto in a second which is what this means for the united nations what this means for the world bank what means the imf but let me just throw that back to you first This question of creating space for china and russia the way in which actually often this money and i'll give you the final example for it come back to you, Nepal, what happened is that The US government said, don't go with Chinese investment, take $500 million from the US, we will build an electricity line which will connect Nepal into India, it'll be good for climate Because it's going to be hydropower. (Time 0:18:50)
Discrediting Aid
Critics often delegitimize aid advocates by highlighting personal connections to the sector.
They also exploit the complexity of aid programs to discredit them with sensationalized narratives.
Transcript:
Rory Stewart
It's also amazing that I'd like to come back to you on the comms bit. Oh, I've got John Matrix, Rory's wife earns good coin from foreign aid. So there's a lovely comms thing going on here, which is instead of talking seriously about what the international aid system is and what it does, you do various things. One of them on Twitter is you delegitimize whoever's talking so you say you know rory stewart isn't allowed to talk about this subject because his wife runs an ngo that received funding From usa id and therefore i'm sort of conflicted right yeah the reality is it was a very small proportion of the funding of that charity and the charity's fine that's not what i'm wound Up about i'm wound up about the 400 million being removed from major NGOs. I'm wound up about, as we've been talking about on the show, the consequence of the entire international system for the fact that Africa, one in 10 children born in the world will be born In Nigeria by 2050. And if you can imagine what the Syria conflict would have meant in terms of migration, if we hadn't had aid programs in place in Jordan, Lebanon, Turkey. But the second thing that they do is that they rely on the fact that aid programs are complicated things being run at the other end of the world. And therefore the public don't know much about them right if i said uh you know your daughter's school is a pile of junk and a complete waste of money and we should cut all the funding you Would know quite a lot about the school and you'd be able to say well that's rubbish and if i showed you a one minute video of some daft thing that a teacher said and said that's why we should Shut down the school you'd be able to say no no look the school's doing all this other stuff right but with international aid it is because it's happening at the other end of the world because It's um there's no media there to cover it because nobody has the patience to get into the details of it they uh can make the most incredible uh meal out of very very partial sensational The Daily Mail used to specialize in this, but my goodness, Mask and X have taken it to another level. (Time 0:28:38)
The Broad Scope of Aid
Aid encompasses various essential functions, including education, healthcare, and governance.
Its successes, like the transformation of post-war nations, are often overlooked in favor of focusing on failures.
Transcript:
Rory Stewart
Well, can I just reply? Sorry, I'm just getting on. But Richie, aid is not education. Aid is education, right? Aid is 80%, an increase from 40% of women in school to 80% of girls in school across sub-Saharan Africa was aid. Aid is education. Aid is basic healthcare. Aid is children not dying. Aid is government stability. Aid is trade. Aid is support for our allies. Aid is pandemics. Aid is refugees. Aid is all those things. Aid is all the functions that our government does at home, supporting endeavors abroad. And the successes, we don't talk enough about successes, we talk about failure all the time. Japan, Germany, South Korea, Taiwan, These were examples of USAID transforming war-torn, shattered conflict countries, helping to transform them into stable liberal democracies And global success stories. And European Union aid into Central and Eastern Europe, its support for Lithuania, for Romania, is an example of aid and development of European money, transforming other people's Countries, making them better off and making us better off. We mustn't get into a worldview that somehow Musk is right and everything that we do to connect with anyone outside our own country is a waste of time and a waste of money. (Time 0:31:32)
