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Britain votes to leave the European Union - what now for development cooperation?

Posted: 14 Jul 2016
On June 23rd Britain voted to leave the European Union. The subsequent multi-layered political and economic consequences of this decision will play out over the next months and years.

Here we highlight a small selection of commentaries on what the result of the “Brexit” vote might mean for development aid, trade and Britain’s role within the development community.

The most immediate effect was that in just one night, the value of British foreign aid fell by more than $1.4 billion. But the longer term impacts for both the value and effectiveness of the UK and Eurpoean aid budgets has also been the topic of some discussion. In early June Kevin Watkins, executive director of ODI argued that a key impact of Brexit would be its effect on the ability of Britain to play a leadership role in global efforts to achieve the Sustainable Development Goals. The major European economies, he points out, have so far failed to match the U.K.’s achievement of the 0.7 percent aid-to-Gross National Income (GNI) target, whilst “the Department for International Development has a well-developed agenda for combating poverty and gender inequality, and for supporting growth. Viewed through the other end of the telescope, leveraging EU aid would dramatically enhance DfID’s objectives…..(but) if Britain wants to leverage the assets of the EU development club it needs to retain club membership”. 

In the aftermath of the UK’s decision to leave, his colleagues at ODI have since expressed mixed opinions on how to Brexit without harming economic development, possibilities for new UK trade policy, and the potential macroeconomic impacts on developing countries.

Another expert who discusses a selection of threats and opportunities is Owen Barder at the Center for Global Development,  Overall, he suggests, the list of threats seems greater than the opportunities, warning that the UK’s commitment to spending 0.7 percent on aid may be abandoned if the fiscal position deteriorates and the government has to find further spending reductions.

Duncan Green at Oxfam also looks for any opportunities amid the gloom. He argues that UK aid currently goes through the EU, would become bilateral UK aid after Brexit, “that could give opportunities for DFID to do more in the way of innovation and accountability (although on the other hand, if DFID chooses to do bad or dumb stuff, it will have more money to do it with…” He ends with a suggestion that “maybe UK NGOs should shift their emphasis to the countries that matter more, helping build citizenship and voice in the emerging powers”.  You can find more views from NGO leaders in this Thompson Reuters article on 'Brexit might affect aid agencies and charities.

Ian Scoones from the Institute of Development Studies, writing about Zimbabwe in particular, argues that without the support of the EU, the colonial baggage of the UK in Africa will manifest itself in continued failures in British diplomacy. With the pound collapsing, remittances to Zimbabwe, (and not just Zimbabwe), will be more expensive for the diaspora, and the prospects of investment will decline. Writing before the new Foreign Minister was announced, he was calling for caution about who the next leader of the Conservative party would be....

If the EU was seen as providing the diplomatic bridge into Zimbabwe, conversely China Daily argues that Britain is seen as the bridgehead into European trade for some other global economies, “partners such as China, with whom Britain is currently enjoying a "golden age,” according to President Xi Jinping, must be wondering what comes next”.

Finally, over at the International Institute for Environment and Development (IIED), Andrew Norton, director, states that “losing membership of the European Union must not mean that the UK withdraws from the great global challenges of our time. The values behind the SDGs and the Paris Agreement – equity, sustainability and universality – are more important than ever, and the UK's continued engagement is vital”.

We’ll be updating this blog as new commentary emerges in the coming weeks. If you have a view to share or would like to highlight other resources please use the comments section below.