Business has a role to play in tackling poverty following the ill-conceived and poorly timed DFID merger
10 July 2020 12:00 AM

Vital role for business following 'ill-conceived' DFID merger

10 July 2020

By Zahid Torres-Rahman

By some estimates, half a billion people globally will be pushed into poverty by COVID-19. For many in the international development community, therefore, the government's decision to merge its Department for International Development (DFID) into the Foreign and Commonwealth Office (FCO) is ill-conceived and poorly timed.

On 19th June, 188 NGOs called on the Prime Minister to reverse the decision. Ten days earlier, the International Development Committee argued for DFID to be retained as a separate ministry with a Cabinet-level Minister.

Nevertheless, the merging of the DFID and FCO – the most significant shake-up in the UK aid architecture for over 20 years – is almost certain to go ahead.

Business now has an even more important role to play in tackling challenges such as inequality and climate change, and there are three main actions all concerned businesses should consider.

1. Advocate to keep the focus on fighting poverty

With the creation of DFID came a laser focus on tackling poverty, as well as a deep understanding of what that entails – from building human capital to promoting good governance; and, on top of that, a shift away from flagship projects to system-level change. Aid focused on poverty reduction, and these underlying drivers, is good for business operations in developing countries and for the resilience of local and global value chains.

In the new architecture, businesses can be an important voice, alongside NGOs, for this focus to be retained: not just in terms of the UK’s commitment to spending 0.7% of Gross National Income (GNI) on aid and what gets counted as aid, but also in terms of retaining the experience of DFID staff, and strengthening public support for international development.

With an integrated Foreign, Commonwealth and Development Office (FCDO), UK businesses have an opportunity to step up their efforts at the country-level to support nationally-defined strategies to deliver the Sustainable Development Goals (SDGs) and Paris Climate Agreement. They should add their voice at the global level to ensure trade and investment policies support low-income countries’ economic progress.

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