The Aid Business is Broken Beyond Repair

Introduction

Foreign aid, also referred to as overseas aid, development assistance or development aid, is monetary assistance given to struggling nations to support social, environmental, political, environmental and cultural developments. As opposed to humanitarian aid, which is a short term response following natural or artificial disasters, development aid aims at alleviating poverty in the long run.

The concept of aid goes back to the colonial era, but modern aid started after the World War II. As recorded Guess’s book, “launched as a large-scale aid program by the United States in 1948, the European Recovery Program, or Marshall Plan was concerned with strengthening the ties to the West European states to contain the influence of the USSR (21)”. The initial intentions by the United States government included providing equipment and military advice to other nations to improve global security and peace. The other intention was to use their advanced industrial progress to improve growth in countries whose economies were “primitive and stagnant” (Guess 21).

The Truman Doctrine, which documents the political rationale by the United States to embark on development aid program indicates that the country believed they possessed the knowledge and skill to end or minimize suffering of people handicapped by poverty in different parts of the world due to lack of food and medical care.

Other countries came on board to support and be part of these initiatives. In 1970, according to Canadian Center for Policy Alternatives, “the world’s rich countries agreed to give 0.7% of their Gross National Income (GNI) as official international development aid, annually, but since that time, despite billions given each year, rich nations have rarely met their actual promised targets” (10). The United States, who initiated the program, has been among the lowest among the nations that have kept this pledge.

Arguments against Foreign Aid

The argument that the aid business is broken beyond repair is one that has been gathering global momentum in the last couple of years. Dambisa Moyo, in her highly debated book “Dead Aid” argues that in the last 50 years, over $1 trillion in aid has been transferred to African. The author argues that this has not helped the recipients in any way. To quote his words “In fact, across the continent, the recipients of this aid are not better off as a result of it, but worse – much worse” (Moyo 13). Opponents of development aid have in the past presented several arguments to support their position.

Aid comes with conditions such as political and economical favors to donor countries. Many recipient countries, for instance, have been forced to use over-priced products from the donor country, which negates the economic benefits. In addition, as argued by Moyo “aid amounts are dwarfed by rich country protectionism that denies market access for poor country products, while rich nations use aid as a lever to open poor country markets to their products” (53). In this regard, the books of benefits versus cost fail to balance at the end of the day with one side always outweighing the other.

Accountability and embezzlement remain some of the biggest concerns for opponents of development aid. Trillions of dollars have been embezzled in massive strategies and grand projects in many developing nations. In 2012, for example, several donor countries suspended aid to Uganda after allegations that up to $ 13 million in aid money was stolen through the prime minister’s office (Akampurira 56). The funds, according to European Union’s ambassador to Uganda, were meant for stabilization and development programming in the Northern part of the country.

In a similar case, there has been much uproar after claims by the Special Inspector General for Afghanistan Reconstruction (SIGAR) claims in a report made public in 2013 that huge amounts of the US aid money in Afghanistan ended up in embezzler’s pockets (Arash 1). The same scenario played in Vietnam where in 2012, Danish aid projects were shut down following a review by review by Price Waterhouse Coopers, which revealed widespread fraud. The projects, which were concerned with climate change research, left 3.3 million kroner unaccounted for (Weaver 1). It is evident that persistent corruption in recipient countries increases the risk of a large wastage of development funds.

Supporters of this debate further argue that most aid does not go to the poorest nations that need it most. Donor nations have been accused of discrimination when choosing which nations to help. They are accused of making that decision based on the economic benefits they gain from the donor-recipient relationship. They are also accused of using aid to manipulate poor nations’ policies, and interfering with their political will and decisions. For example, a decision by various donor countries to stop aid to Rwanda in the recent past has attracted heated debates from both sides of the bench.

The claim that Rwanda supports rebel groups in the Democratic Republic of Congo are viewed by some as an excuse by donor countries who are frustrated by a leader who is allegedly tough and will not allow the foreign nations influence the county’s local affairs. The other side of the debaters argues that countries like Rwanda should own up to their mistakes and not expect support when they do not share a global desire for peace. The two sides of the arguments are proof that donor interference remains a real concern to poor nations that continue to depend on aid.

The issue of over-dependency also comes into play when development aid is discussed. According to Dagnachew, Hilhorst and Van-Uffelen, many poor countries that continuously receive aid easily develop a dependency syndrome (1). To quote the author’s words, “the primary concerns are that beneficiaries will lose the motivation to work to improve their own livelihoods after receiving benefits, or that they will deliberately reduce their work efforts in order to qualify for the transfer”. The question on whether long-term recipients of aid can eventually make people sluggish in sorting out their problems is a point of more debate.

Using Ethiopia as a case study, the country has received massive amounts of resources since the mid 1970s to address food insecurity problems, and also feed a large population that has little access to food. By end of 2012, more than 8 million people were still on dependent on food aid for the basic meals. More than 30 years since the country started receiving food aid, the country has still failed to deal with food insecurity problems successfully, and is still hit by food shortages often. Some districts such as Amhara in the Northern part of the country remain chronically food insecure. While it is arguable that the country has come a long way in addressing food securities, and the face genuine problems caused by recurrent drought, land degradation and poverty, opponents of foreign aid opine that a dependency syndrome is indeed the cause for the government and stakeholders failure to address the root causes of food insecurity in the nation.

Arguments for Aid

It is evident that the between development aid and the economic development of recipient remains controversial. For those who support development aid, the challenges may be many but the end results are worth it. Many economists and financial analysts have lauded development aid’s contribution towards achieving various economic, environmental, social and political goals in different regions of the world. As Wahidi argues “despite the many failures of different aid models to achieve the expected development results, the impact of the Millennium Development Goals (MDGs) despite all the shortcomings is a cause for optimism” (4). The author further explains that the impact, particularly as a solution to poverty eradication, has been and continues to be encouraging.

As the world struggles out of the rent recession, the number of hungry people exceeded the one billion mark for the first time. The scourge of diseases such as malaria and HIV continue to kill people and limited access to education for a majority of children in poor countries denies the younger generation an opportunity to compete, or at least, catch up with the rest of the world. Environmental degradation and global security continue to pose an increasing threat to sustainable development. These are all troubling issues that cause despair, and they cannot be ignored or wished away. They require a long term commitment by countries that have the financial and knowledge capacity to handle them. As a result, proponents of foreign aid argue that aid is a significant part of global development and well-being that cannot be stopped now.

The benefits of aid are well documented by different organizations that audit the success of an extended hand to various parts of the world. The Millennium Development Report for 2011 indicates that the global poverty rate is estimated to decline to 15% by 2015, 8% less of what was forecasted earlier. The report also indicates that child mortality had declined from 12.4 million in 1990 to 8.1 million by 2009. In addition, the number of people who have access to clean water had increased to 1.1 billion and 723 in urban and rural areas, respectively, by the same year. Another milestone, according to the report, has been the decreased number of people infected with HIV between 1997and 2009 by 21% (United Nations report 2011). The progress in various aspects of different countries and communities has been attributed to continued support through multilateral and bilateral aid from various donor countries.

Such reports according to Suzman dismiss a stunningly increasing attack on aid and its benefits. He opines that “while the problems associated with aid distribution and use remain urgent, the world has witnessed greater absolute improvements in health, wealth, and education, especially in the last decade” (1). Even though economic growth has been biggest in countries such as India and China, it is important to note that real progress has happened all over the globe.

In addition to registered improvements in various areas of concern such as health and education globally, an increased focus on accountability and results also point to the fact that overall aid spending is becoming focused and accurate, consequently becoming effective. The number of unearthened aid scandals in the last years is proof that donor countries are more watchful and vigilant on how their money is spent. Taxpayers’ money, therefore, is being spent on proven interventions and the intention of improving the quality of life for more people in the globe is being achieved.

Using Africa as a case study, many countries such as Mozambique, Rwanda, Tanzania, and Ghana have all doubled their per capita income since the 1990. Countries like Malawi and Niger have been able to decrease their child mortality rate by 50% and 42%, respectively, since 1990. Guinea and Tanzania have seen their school enrollment rates rise from 36% to 71% and 43% to 71%, respectively, since 1999 (). Over 72% of Burkina Faso’s population today has access to clean water, compared to 36% in 1990. Such statistics, combined by what the milestones reported by the MDG secretariat reflect positive overall economic gains. The fact that these achievements have been registered despite the continued rise in population in these countries also proves that foreign aid is having a positive impact in poor countries globally.

On the hunger front, there is a lot to celebrate according to Suzman. A spike in foods prices in 2008, followed by a recession in 2009, left over 100 million in desperate need for food. The world, led by the G20 responded by committing to give over $22 billion to in a period of three years to establish long-term solutions to food insecurities. The funds were aimed at increasing food yields in some of the poorest countries by 25% in a duration of ten years, and progress is evident according to Suzman (1). There seems to be a clear route of the final destination and evidence of success that has been achieved so far.

Conclusion

Looking at the aid mechanism, it is evident that the mechanisms through which it is distributed and used are lacking. The instruments to measure who deserves what, if they get it, how they get it and how it is spent, are blunt and allow for many loopholes. According to Pomerantz “sharper, more precise actions with leverage potential are more likely to succeed in the huge task of societal transformation needed for development” (3).

In order to make aid effective, there is need to acknowledge that if the only drive for donors is their political and strategic national interests, their donations will not lead to the expected global development. For example, foreign aid given to Israel from the American government will not positively impact global poverty because poverty eradication objectives are not the primary target of the USA in this particular case. On the contrary, if the money was directed at developing schools and roads in a third world country, the impact of development will no doubt be positive.

In addition, the process of setting development goals plays a role on how much development aid achieves. It has been argued that those involved only focus on those projects whose goals can be easily measured. The results have been a reduced interest in projects that foster other important development goals such as good governance, democracy human rights, gender violence and children protection. Therefore, when measuring the success of foreign aid, goals should be set based on their overall impact in a country and not whether it meets the goals that are easily measured.

There is also need for collaborative partnership between donors and recipients. Organizations such as the World Health Organizations use the term development corporation to express the idea that aid should not a situation dominated by specialized knowledge and wealth of one side, but rather, it should be a partnership between the recipient and the donor for the long term good of both partners (Akampurira 73). Contrary to the common notion that only western rich and industrialized nations give aid, poorer countries also contribute aid. Therefore, aid should be viewed as a tool to improve global conditions rather than a superiority affair or a plan by the rich nations to control more aspects of global development, and only a healthy relationship between donors and recipients will build such as attitude.

Putting into consideration both sides of the argument, it is fair to say that aid is not inherently ineffective. It is also inaccurate to conclude that the aid business is broken beyond repair. Whether bilateral or multilateral, there is need for intensive stock-taking and analysis of what aid has achieved in the past. Only then can an accurate decision be reached on whether aid is working or not. The measure of success or failure must also put into consideration the perspectives of every stakeholder, including those whose taxes pay for the aid and ordinary citizens in countries that have benefited from aid.

Works cited

Akampurira Abraham. Monetary Policy and Public Finance: Aspect of Development. GRIN Verlag, 2013. Print.

Arash Sayed Azem. SIGAR Worried About Embezzlement of US Aid, September 2013. Web. 04 Nov. 2013.

Canadian Center for Policy Alternatives. Minority Report: A Report Card on the 2004-05 Minority Government: Alternative Federal Budget 2006. Ottawa, Ont: Canadian Centre for Policy Alternatives, 2006. Internet resource.

Dagnachew, Aschale, Hilhorst Dorothea and Van-Uffelen Gerrit. Food Aid Dependency Syndrome in Ethiopia: Local Perceptions, November 27, 2012. Web. 04 Nov. 2013.

Dambisa Moyo. Dead Aid: Why Aid Is Not Working And How There Is Another Way For Africa. Penguin Books Limited, 2011. Print.

Guess, George. The Politics of United States Foreign Aid. New York: Routledge, 2010. Print.

Pomerantz, Phyllis R. Aid Effectiveness in Africa: Developing Trust between Donors and Governments. Lanham, Md. [u.a.: Lexington Books, 2004. Print.

Suzman Mark. Development Aid is Working, 2013. Web. 04 Nov. 2013.

Wahidi Haris Mohammad. Is Aid an Effective Tool for Development?, January 2013. Web. 04

Weaver Ray. Aid Projects Shut Down After Reports Of Frau, May 2012. Web. O4 Nov. 2013.

United Nations. The Millennium Development Goals Report 2011, 2011. Web. 04 Nov. 2013.