By Lin Taylor

LONDON, Nov 23 (Thomson Reuters Foundation) — Britain is set to suspend its target of spending 0.7% of gross national income on development aid in a spending review on Wednesday.

A temporary reduction in the UK’s overseas aid budget to 0.5% of GDP could save about £4 billion ($5.34 billion) annually.

Hundreds of charities have warned the cuts will harm poor communities already reeling from COVID-19 and could also hamper efforts to curb climate change, with Britain set to host UN climate talks in 2021.

Why is Britain committed to spending money on aid?

In 1970, Britain pledged to spend 0.7% of its national income on aid as part of a United Nations pact.

It is among 30 wealthy countries including Germany and Japan that have vowed to meet this commitment each year and, in 2015, Britain enshrined in law that 0.7% of its income must be spent on aid.

"Investing less than one percent of our national income in aid is creating a safer, wealthier, and more secure world," reads a government website explaining why it spends money on overseas aid.

Last year, Britain spent £15 billion ($19 billion) on aid, an increase of £645 million compared to 2018, which met the 0.7% UN target.

Do other countries make the same 0.7% commitment?

Yes, and in fact, several countries have exceeded the UN aid target, including Denmark (0.71%), Luxembourg (1.05%), Norway (1.02%), and Sweden (0.99%), according to 2019 data by the Organisation for Economic Co-operation and Development (OECD).

In terms of overall spend, the United States is the biggest aid donor, spending $34.6 billion in 2019, followed by Germany ($23.8 billion), Britain ($19 billion), Japan ($15.5 billion), and France ($12.2 billion).

Where does UK aid money go?

The top five countries receiving UK aid in 2019 were Pakistan, Ethiopia, Afghanistan, Yemen, and Nigeria, with almost all the money going to countries in Africa and Asia, according to official data published in September.

Britain spent £1.5 billion on humanitarian assistance mostly in Yemen, Syria, and Bangladesh, government statistics showed.

The UN describes Yemen, a poor country before an almost six year civil war, as the world's biggest humanitarian crisis, with 80% of the population reliant on aid.

This year the coronavirus pandemic, economic decline, floods, escalating armed conflict, and a severe aid funding shortage have again raised the possibility of famine in Yemen.

Britain also spent around £1.4 billion ($1.87 billion), on health projects including medical research, family planning, and infectious disease control globally.

How could recipients of UK aid be impacted?

Aid groups say that reducing the aid budget would harm the world's poorest, hinder climate action, and damage Britain's reputation as a leader in international development.

"The UK faces real financial challenges but cutting aid would do huge harm to the world's vulnerable people while making little difference to the government's budget overall," said Kevin Watkins, head of Save the Children, in a statement.

The World Bank said in October that the coronavirus pandemic could push as many as 150 million people into extreme poverty by the end of 2021, wiping out more than three years of progress in poverty reduction.

With Britain set to host next year's UN climate summit, Greenpeace chief John Sauven said aid cuts would "sour" diplomatic relations when it comes to tackling climate change.

"This proposal would directly hinder developing countries' ability to tackle and adapt to the climate emergency. But it would also sour the UK's diplomatic relationships in the run-up to the summit," said Sauven.

Why does Britain's government say it is changing the way aid money is spent?

Britain is currently reviewing foreign, defence, and security policy, seeking to define a new role for itself in the world after leaving the European Union.

In June, it merged its diplomatic and aid departments to form the Foreign, Commonwealth, and Development Office.

Charities said scrapping its development office, DfID, risked money being diverted to address foreign policy interests rather than alleviating poverty which itself fuels migration and insecurity.

But Britain's foreign minister, Dominic Raab, said the pandemic had shown how security, prosperity, development, and foreign policy were inextricably interlinked.

"These changes mean the UK will be best placed to lead the international effort on COVID recovery and renewal," he tweeted in June. 

(Reporting by Lin Taylor @linnytayls, Editing by Tom Finn. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly.  Visit http://news.trust.org to see more stories.)