Leading article: A sensible redirection of effort, but risks lie ahead

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It has been brave of the Coalition Government to stick to its election commitment to ring-fence Britain's £8.4bn overseas aid budget at a time when public spending is being slashed so heavily. We should not balance our books at the expense of the most wretched people on the planet, especially when comparatively small amounts of money can save many lives in the developing world.

To fend off criticism from the Tory right, the International Development Secretary, Andrew Mitchell, has launched a major review of how our money is spent. He clearly hopes that support for aid will be increased by demanding greater value for money, emphasising how aid helps our national interests and by focusing it on states where Britain has an interest in greater stability.

It is sensible of him to end British aid in more than a dozen countries, including China and Russia, which are no longer poor, or in Angola and Cambodia, which remain poor but where Britain is not a lead donor and where co-ordinating aid from many donors is an unnecessary drain on resources. And it is courageous of him to maintain aid to India which, despite being the world's 11th largest economy, with its own space programme, has nearly half a billion desperately poor people – more than in any other country in the world. India has more poor people in three states than there are in the whole of sub-Saharan Africa. And though growth is lifting people out of poverty in China, it isn't in India.

There had been fears that the review would put Britain's security concerns ahead of the fight against global poverty. Certainly more money is now going to Pakistan, Afghanistan, Somalia and other "fragile" states which are potential seedbeds of terrorism. By 2014 almost a third of British aid is expected to go to countries the UK deems a security risk. Aid to Yemen, whose lack of economic development provides a fertile recruiting ground for al-Qa'ida, will double. But most of those countries score high on poverty indices; in Yemen half the children are malnourished. Aid to Iraq is to end, which suggests security is not the top priority, while it continues in Ghana, which is stable, but very poor.

There is logic too in the shift in attitudes to multilateral agencies. Good ones, like the UN children's agency Unicef, and the Global Alliance for Vaccines and Immunisation, will get more money. Poor performers, like Unesco, are threatened with less. But care must be taken. Britain is threatening to switch funds from the UN's lethargic Food and Agriculture Organization to the World Food Programme, which deals effectively with emergency food aid. Yet these two are not alternatives; the FAO deals with strategic issues of long-term global food security; if it is not performing it needs a spur to reform, not cutting adrift.

There are other questionable elements in the review. Making aid to Yemen conditional on macroeconomic reform sound suspiciously like a reversion to the failed economic "adjustment" programmes of the Thatcherite 1980s, with its privatisations and cuts in health and education spending. And though the emphasis on value for money sounds sensible, its "payment by results" approach could result in a focus on easily-measurable targets, like how many wells have been dug, at the risk of more difficult, harder-to-measure, but ultimately more transformative development work like improving the skills of civil servants in the health ministry, to run efficient healthcare.

That shift from the long-term to the short-term carries risks. And a greater focus on security could compromise anti-poverty priorities. Campaigners will need to scrutinise the minutiae of the changes when detailed figures are published in April. But in the meantime, two cheers for Mr Mitchell seem in order.

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