What are the biggest reported flows between the UK and developing countries?

Development Monitor has crunched public data on trade, aid, remittances and investment to investigate which developing countries send and receive the most from the UK.  

Here is a taste of what our new dashboard can tell us about the UK’s interactions with low-income countries in 2017.

The World Bank classified 34 countries as ‘low-income’ in 2017.[i]  They are around 50 times poorer than the UK, with per capita incomes averaging around £1.60 per day in 2017. [ii] Many low-income countries are in sub Saharan Africa but also include Afghanistan, Nepal and Yemen.

For these low-income countries:

  • Their biggest reported outflows to the UK are payments for UK services. Seven low income countries spend 1-2% of their GDP on services from the UK, such as management consulting, financial services, engineering services. They are: Zimbabwe, Sierra Leone, Afghanistan, Liberia, Senegal, Mozambique, The Gambia. As noted in our earlier article, these payments are sometimes worth much more than the bilateral aid they receive from the UK, e.g. Zimbabwe (£279m versus £93m), Senegal (£160m v £1.4m).
  • Remittances are more significant than aid for some countries. UK remittances are estimated to be a bigger inflow than UK bilateral aid to Uganda (£289m v £140m), The Gambia (£28m v £15m) and Nepal (£111m v £100m). UK remittances to Uganda are estimated to be larger than bilateral aid flows to any low-income country other than Ethiopia.
  • Ethiopia has top spot (though it depends how you look at it). UK bilateral aid to Ethiopia was £326m, exports to the UK were worth £350m, bigger than other reported flows between the UK and low-income countries. Ethiopia was also the largest importer of goods from the UK (£220m). But Ethiopia is the biggest low-income country, by population and by GDP, so we get a different picture taking that into account. UK bilateral aid as a percentage of GDP is lower for Ethiopia (0.5%) than for many other low-income countries, for example UK bilateral aid to Somalia is worth 4.9% of its GDP.

Top reported financial flows between the UK and Low-income countries (2017)

Ranked by % of developing country GDP

Try out the dashboard to see all the data and investigate trends for other income groups, Least Developed Countries and Commonwealth countries.

[i] World Bank threshold for low income countries was $995 or less GNI per capita  (Atlas method) in 2017 https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups Comoros, Senegal and Zimbabwe were classified as low income in 2017, but moved to low-middle income in 2018.

[ii] Average GNI per capita in low income countries in 2017 was $752; UK $40,580 GNI per capita; Atlas method (current US$) https://data.worldbank.org/indicator/NY.GNP.PCAP.Cd?end=2017&start=2016  USD-GBP exchange rate in 2017 = 1.29 https://www.ofx.com/en-gb/forex-news/historical-exchange-rates/yearly-average-rates/

Continue reading

World’s poorest countries spent £2.5 billion on UK services in 2017

Analysis by Development Monitor shows that the UK exported £2.5 billion of services – such as management consulting and financial services – to Least Developed Countries (LDCs) in 2017, up from £2.0 billion in 2016. The UN defines LDCs as low-income countries that face severe impediments to sustainable development. The UK also imported £0.7bn worth of services from these countries in 2017, unchanged from 2016.

The value of UK services provided to LDCs was almost as much as the UK’s bilateral, country-specific aid spending on those countries, which amounted to £2.6bn in 2017.

Several LDCs spent more on UK services in 2017 than they received in UK bilateral aid, including:

  • Afghanistan: UK service exports £241m, UK bilateral aid £227m
  • Bangladesh: UK service exports £352m, UK bilateral aid £176m
  • Mozambique: UK service exports £114m, UK bilateral aid £58m
  • Zambia: UK service exports £72m, UK bilateral aid £53m.

The Solomon Islands spent the highest proportion of its income on UK services, worth 4.74% of their GDP in 2017, and equivalent to around half their spending on education.

On average LDCs spent a greater proportion of their national income on UK services than richer developing countries. In 2017, imports of UK services exports were on average worth:

  • 0.31% of GDP for Least Developed Countries
  • 0.12% of GDP for Upper Middle Income countries (such as Brazil and China)

More trends and analysis can be found on Development Monitor’s financial flows dashboard.

Continue reading

Explore UK trade relations with developing countries

Development Monitor has launched a new trade dashboard which explores the UK’s trade with developing countries and shows the importance of this trade for both the UK and people in developing countries.

The dashboard supports Development Monitor’s submission to the All-Party Parliamentary Group (APPG) Trade out of Poverty inquiry on Commonwealth countries and its submission to the International Trade Committee inquiry into trade with developing countries.

The dashboard helps to answer questions like:

  • Which developing countries are most dependent on the UK as an export market?
  • How important is trade with the UK for Commonwealth developing countries?
  • What are the top developing country markets for UK goods and services exports?
  • Do developing countries that have signed up to an Economic Partnership Agreement export more to the UK than those that haven’t?

If you find the dashboard useful, or have suggestions for new features, please get in contact.

Continue reading