Brexit – the campaign for Britain’s exit from the EU - took centre stage in political and economic discussions the world over. On June 23, 2016, in a historic referendum, a majority of 51.89% voted to leave the EU. The final exit is likely to take at least two years and will see several rounds of negotiations between Brussels (the headquarters for EU) and London.
However, since the decision, UK has been rocked by a leadership crisis – PM David Cameron resigned, and for a period of almost three weeks there was no replacement for him in place, until Theresa May won the Conservative leadership contest to become the PM on July 12, 2016. Leaders of the ‘Leave’ camp Boris Johnson (Conservative) and Nigel Farage (UK Independence Party) made hasty retreats, and opposition leader Jeremy Corbyn has narrowly escaped an internal coup by fellow Labour members.
Economically too, the pound plunged to a 31-year low and British banks took a hit of $ 130 billion (June 24). Now there is an impending threat from the Scots, 62% of whom wanted to remain with the EU, that they might consider another referendum to secede from UK.
Political leaders and economists here in India assure that India will not be significantly affected by Brexit.
But what about international aid in India and the world over?
First let’s take the larger picture of international aid and Britain’s role in it.
No mention of the impact on international aid was made during the Brexit debate, either by the Leave or the Remain camps who resorted to everything from fear-mongering to hysterics to persuade voters. Even the murder of British MP Jo Cox could not shift the focus on aid. In favour of Remain, Cox was a former Oxfam staff, and a campaigner for humanitarian services.
However, leading UK based charities, including Oxfam, Action Aid, Save the Children, Christian Aid, and World Wildlife Fund signed a letter in their private capacities, making an appeal to the millions who supported Britain’s leadership role on aid to support continued EU membership.1
Britain’s ability to play leadership role in global efforts to achieve the Sustainable Development Goals (SDGs) will be affected by its decision to Leave. Bexit’s impact on humanitarian funding and international development is going to be significant, in terms of not only re-writing EU’s priorities, but also redirecting billions of dollars in aid.
The EU and its institutions, particularly EU’s Department of Humanitarian Aid and Civil Protection (ECHO), are important and consistent contributors of international humanitarian assistance. In 2015, EU institutions disbursed US$2.0 billion in humanitarian assistance2 . UK has consistently been amongst the top five contributors to EU budget, contributing 0.7% of its gross national income (GNI) to EU. The United Kingdom (UK) contributed 27% of the European regional total.
This has allowed Britain to play a more influencing role in EU’s aid priorities, particularly pushing for a greater presence in conflict and post-conflict areas in recent years. This larger pool of money in EU delivers better lives for the poorest people. It also helps tackle problems in areas where the UK has no large presence, for example in parts of West Africa. EU aid complements activities that other aid agencies cannot undertake, like police and security missions in fragile hotspots.
Brexit would mean, Britain’s interest would no longer be at the top of EU’s agenda. Though Britain’s divorce from EU is still, at least, two years away, it puts into limbo development and humanitarian aid decisions.
The European Commission (EC), EU’s administrative arm, applies different rules of eligibility for its various funding. Most are decided on the nationality of applicant organisations. ECHO, for example, awards Financial Partnership Agreements (FPA) to only those organisations located in EU, or the European Economic Area (such as Norway and Iceland). Currently, 42 agencies in the UK hold the FPA with ECHO. The ability of charities, registered in Britain, to access future humanitarian funding from the EC pool will be dependent upon the agreements reached regarding the UK’s exit out of the EU, and the nature of the relationship with the EU.
India though heralded as ‘super power’, continues to be a significant aid recipient. It continues to battle one of the worst poverty rates and human development indicators. Humanitarian aid to India however, has been fairly low compared to overall aid profile of the country (at 4% between 2001 and 2009), with contributions peaking during the Gujarat and Kashmir earthquakes in 2001 and 2005, respectively. UK was the second largest humanitarian aid donor, giving 89.5 million USD between 2000 and 2009 (as per Global Humanitarian Assistance Report 2012).
Though it will be a wait and watch to see the actual impact of Brexit on humanitarian aid in India, our ‘likely-impact-due-to-Brexit’ moment came a few years ago. UK government’s Department for International Development (DfID) reduced its humanitarian and development assistance resulting in a bitter spat between India and UK on the ‘peanuts’ given by the latter and the many ‘strings’ attached to it. Owing to the India-UK aid spat, sources suggest that it would now take a rare and significant humanitarian event for DfID to get directly involved in India.
Funding trends in India are changing. More private individuals, corporates and foundations have started donating more and they are now preferred due to the fewer ‘strings’ attached to reporting and spending on humanitarian agencies. But these donations are easier to come by in case of a major natural disaster like Uttarakhand floods, Jammu & Kashmir floods, and Nepal Earthquake in the recent years.
However, for conflict response, and smaller more localised disasters, humanitarian agencies in India continue to rely on bi-lateral and multi-lateral funds, such as ECHO. This share, too, has been shrinking since 2015, as aid and assistance from both UK and EU are being diverted to the protracted crisis in Syria, Yemen and South Sudan instead.
So in a nutshell, India is prepped, by the circumstances in the last few years, for a further shrink in the donor base and Brexit, as we see today, is unlikely to have a significant impact on humanitarian assistance by EU and UK immediately.
Written by: Prerna, Programme Coordinator- New Business, Institutional Fundraising & Partnerships, Oxfam India
1http://www.theguardian.com/politics/2016/feb/24/brexit-would-harm-efforts-to-tackle-global-poverty-uk-aid-figures-warn (written on Feb 24, 2016 and viewed on July 5, 2016)
2Development Initiatives (2014) Global Humanitarian Assistance Report 2014