Development aid

Development aid:Altruism or Self-Interest?: 

Development aid: Altruism or Self-Interest? October 29, 2007

2 different perspectives:: 

2 different perspectives: We the peoples of the United Nations, determined to save succeeding generations from the scourge of war…reaffirm our faith in fundamental human rights… and for these ends agree to employ international machinery for the promotion of the economic and social advancement of all peoples. UN Charter, 1945 The main purpose of American aid is not to help other nations but to help ourselves Richard Nixon President of the United States

The players: 

The players Governments of wealthy nations (“Bilateral” aid accounts for 70% of all aid) Multilateral agencies (World Bank, UN agencies: UNDP, WHO, FAO etc.) Non Government Organisations Service, research and advocacy organizations Philanthropic foundations: Kellogg, Ford, Rockefeller, Bill and Melinda Gates, George Soros etc. Corporate philanthropy

Origins: 

Origins Bi-lateral aid after colonial period Seamless transition from colonial to post colonial budgetary support Multilateral aid after the establishment of Bretton Woods Institutions in the 1940s: Aid for post war reconstruction in Europe (Marshall Plan) …followed by loans to Latin America, Asia, Africa Post war climate of commitment to peace and prosperity for all (UN charter) Non Government Organisations began as relief organisations helping victims of war and conflict: Red Cross (1863); Save the Children (1919) – helping child victims of WW1; Plan International (1937) – helping child victims from the Spanish Civil War Oxfam (1942) –famine relief to the Greeks during WW2 CARE (1946) – food parcels from USA to Europe during WW2 World Vision -- Korean war relief

Purpose of Aid: 

Purpose of Aid To win allies in the Cold War (OECD countries and USA v. Soviet Union and its satellite states): To stimulate economic growth of national economies (enabling development to “take-off” and increase consumer demand – a “win-win” result) To promote commercial objectives -- e.g sale of technology, grain surplus, and expertise from donor country (e.g. Until 2005, 90% of Canadian food aid was tied to Canadian purchases.) To realise humanitarian, altruistic goals – to eliminate poverty

0.7% of GNP target: 

0.7% of GNP target Only five donor countries have reached or exceeded the UN target of 0.7% of GNI:  Sweden (1.03%), Luxembourg (0.89%), Norway (0.89%), the Netherlands (0.81%), and Denmark (0.8%) (2006 ))  Another 11 DAC member countries – all also members of the European Union – have made firm commitments to reach the 0.7% benchmark by 2015, the target date for many of the Millennium Development Goals.  The remaining 6 of the 22 DAC member countries – Australia, Canada, Japan, New Zealand, Switzerland, and the United States – have not set a timetable for increasing their ODA to 0.7% of GNI During the 1990s, Canada’s aid program absorbed large successive cuts.  The percentage of GNI spent on ODA dropped below 0.3%, and Canada’s ranking among 22 OECD donor countries fell from 6th in 1995 to 17th in 2000.

Some key phases: 

Some key phases Post WW II: ODA inspired by success of Marshall Plan in Europe. Cold War period when aid was influenced by strategic interests of the superpowers 1970s Oil prices went up – Saudi Arabia became a major aid donor. 1980s: “The Lost Decade”. Recession in wealthy countries, indebtedness in poor countries, structural adjustment policies imposed to ensure survival of global economy. Loans through WB and IMF required countries to cut back public services, depress wages, and devalue currencies UNICEF promoted universal childhood immunization and promotion of child rights NGOs increased in importance (filling the gap left by government cutbacks) and building Civil Society End of Cold War: No peace dividend, but aid budgets were cut to an all time low in 1997 UN Millennium summit in 2000: Millennium Development Goals set, but few donors commit more than 10% of aid budgets to basic health and education expenditures Post 9/11/01: “To speak of development is to speak also of a strong and determined fight against terrorism”. Two strategies: Pay greater attention to poverty reduction to stave off discontent Reorient aid (e.g. to Iraq and Afghanistan. Afghanistan received virtually nothing before 2001, and now it is the single largest recipient of Canadian aid)

Trends in giving: 

Trends in giving Since the 1960s, public support has been weakening – “donor fatigue”. Keeping pressure on are celebrities or charismatic influential thinkers such as Clinton, Stephen Lewis MDGs are “soft” targets requiring national commitment and donor financing but so far less than 10% of donor aid budgets are directed towards these goals Since 9/11 security objectives and the promotion of liberal democracies are the order of the day. On-going NGO assistance by local and international NGOs to Provide humanitarian assistance, social and economic programs especially to the poorest groups excluded from the mainstream Build Civil Society as an effective advocate to challenge national governments and the multilateral fora (WB/IMF; World Economic Forum, G8 meetings)

Notable achievements: 

Notable achievements Transfer of agriculture technology that brought about the “Green Revolution” (although this has been a mixed blessing) Advances in public health – small-pox eradication, polio eradication (almost), and primary health care leading to reductions in mortality and morbidity Promotion of micro-finance and micro-credit, pioneered by Mohammed Yunus of the Grameen Bank

Aid ≠ Development ≠ Poverty Reduction: 

Aid ≠ Development ≠ Poverty Reduction Throwing money at a problem does not fix it. Larger aid flows are not necessarily the answer Some see aid as a humiliating feature of North-South relations Aid can also result in “hand out mentality” at the community level YET: Well directed aid is needed, desperately

State, Market, Civil Society: 

State, Market, Civil Society Over the last 50 years neo-liberal policies have seen the relative roles of the State, the Market, and Civil Society change Development Aid has also changed in parallel: bi-lateral and multi-lateral aid in decline more involvement of the private sector in development assistance Continued expansion of local and international NGOs in service delivery and advocacy roles, though their contribution in absolute terms remains small