UK told decision to cut foreign aid spending will cost lives in places such as Yemen. AFP
UK told decision to cut foreign aid spending will cost lives in places such as Yemen. AFP
UK told decision to cut foreign aid spending will cost lives in places such as Yemen. AFP
UK told decision to cut foreign aid spending will cost lives in places such as Yemen. AFP

UK’s foreign aid cut ‘a failure of kindness and compassion’


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A senior UN diplomat said the UK’s decision to slash its foreign aid budget is a “failure of kindness and compassion” that risks undermining its reputation abroad.

Charities including Oxfam and ActionAid UK also said the spending cut had caused "devastation" and tarnished Britain's credibility ahead of the G7 summit in Cornwall next week.

Britain is the only G7 country winding back its support for international development programmes, with the foreign aid budget slashed from 0.7 per cent of national income to 0.5 per cent.

A group of 30 rebel Conservative Party MPs, including former prime minister Theresa May, will attempt to reverse the decision on Monday in a potential vote in the House of Commons.

The group has proposed amending legislation related to a new scientific research agency to make up any shortfall from the 0.7 per cent target next year.

The Speaker of the House of Commons, Sir Lindsay Hoyle, will decide whether to allow the vote to proceed.

Ahead of the potential vote, the UN’s under-secretary-general for humanitarian affairs, Mark Lowcock, urged the government to back the MPs.

He said he was concerned the cut was undermining Britain’s trustworthiness at a crucial moment when the world is grappling with the Covid-19 pandemic.

“It is a failure of kindness and empathy. It’s a breach of a promise,” he told Times Radio.

“I’m afraid there’s no question that that costs lives. If you slash aid to starving Yemeni children, you know, they die. Likewise, in Syria.”

Mr Lowcock, who is a former head of Britain’s Department of International Development, said the UK stood alone among major economies in using the pandemic to slash aid spending.

“Every other G7 country in the world has all of these economic problems because of the pandemic,” he said.

“And nobody else is slashing their aid budget.”

Ministers have said the funding cut is needed to help improve the deteriorating budget position, with the government borrowing record amounts to respond to the pandemic.

Prime Minister Boris Johnson has promised to restore the foreign aid budget when the country’s financial situation improves but has not said when that is likely to happen.

Meanwhile, a group of charities including Oxfam, WWF UK and Save the Children warned the cuts were a “double blow to the world’s poorest communities”.

“While other G7 countries have stepped up their aid budget, the UK is the only one to have rowed back on its commitments,” the charities said.

“As a result, families are going hungry, girls are not going to school, women’s rights are being side-lined, persons with disabilities are being further left behind, vaccines are expiring on shelves, and diseases are being allowed to spread and we are reneging on our commitment to lead from the front on tackling climate change.”

Tom Tugendhat, chairman of the Commons Foreign Affairs Committee, said he was “cautiously optimistic” that MPs could defeat the government on the cuts.

“We’re trying to make sure Britain’s foreign footprint - Global Britain - really means something,” he told Sky News.

“The reality is that Britain has a huge opportunity to shape the world in extraordinary flux. This, along with our defence, diplomatic and trade capabilities, is part of that.”

Health Secretary Matt Hancock told the BBC on Sunday that the “temporary” spending cut was "entirely reasonable", given that the pandemic had caused a "once-in-300-year economic interruption".

UN Secretary- General Antonio Guterres previously described the cuts as a "death sentence".

The reduction in spending led to UK aid to Yemen being cut from £197m pledged in 2020 to £87m this year.

Funding for the Global Polio Eradication Initiative was reduced from £100m to £5m, while education funding for girls was cut by 40 per cent on average from the previous four years.

The UN Population Fund said the UK planned to cut family planning aid from £154 million to £23m this year.

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Maratha Arabians 138-2

C Lynn 91*, A Lyth 20, B Laughlin 1-15

Team Abu Dhabi 114-3

L Wright 40*, L Malinga 0-13, M McClenaghan 1-17

Maratha Arabians won by 24 runs

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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