Monitoring Policy Making at the United Nations |
| ||||||||||||
The Give and Take of Foreign Aid - Social and Economic Policy - Global Policy Forum The Give and Take of Foreign Aid
Radio Netherlands
November 14, 2002
Foreign Aid, charity, development assistance…whatever you call it, it has become a global activity. The assistance is delivered by various means: government-to-government, pooled multilaterally or channelled through non-governmental organisations of all sizes. Actually, the bulk of foreign aid is funnelled through international financial institutions like the World Bank, which gives grants, loans and advice, and the International Monetary Fund (IMF) which gives loans with strict requirements.
David Sogge is an independent aid analyst and consultant based in The Netherlands. In his book Give and Take: What's the Matter with Foreign Aid? he suggests that even compassionate forms of aid like feeding the hungry can have dramatic and sometimes negative effects on those it seeks to help.
Changing Habits
"Clearly food aid has helped people in situations of great distress survive. But I think we have to look at food aid's original purposes. Why was it launched in the first place? Clearly one major reason has been surplus production in North America and Western Europe - wheat, maize and other grains and milk and butter."
David Sogge argues that food aid changed Africa's diets and created a dependency on an expensive, foreign commodity: bread. "Wheat is grown in only a few corners of Africa and at greater cost than it is grown in Western Europe or North America. So those countries are sometimes paying substantial parts of their foreign exchange earnings to buy wheat from Canada, the US, from Europe to make the bread in the bakeries to feed people who have these new eating habits.
A Trickle Too Little
Whether America intentionally used food aid to turn Africans into consumers of wheat, and especially American wheat, is debatable. But David Sogge suggests that the political and economic interests of donor or lender countries usually influence who gets foreign aid and how. Relieving poverty has only relatively recently become a fundamental criterion for assessing aid's success.
"Until about three or four years ago," explains Sogge, "aid did not particularly take poverty into account. Poverty would be something that would be resolved once the benefits of broad development would trickle down to poorer people."
Delivery Problems
This trickle down theory, which says if you improve things at the top they will eventually improve things at the bottom, has not worked. In his book, David Sogge cites numerous studies that show how aid programmes have had a negative impact on economic growth and have usually created greater income inequalities. But can we place most of the blame on the givers of aid? Problems do occur once the money and materials arrive in the country of destination.
"Corruption and malpractice is an old one and it cuts across many systems of public assistance. Clearly this has occurred with foreign aid. One of the aid industry's most successful rip off artists, the President of the now People's Democratic republic of the Congo Mr Mobutu, took his money out of his foreign bank accounts that were regularly monitored by the Washington DC foreign aid institutions. Similar cases have occurred in Indonesia where the World Bank apparently knew of the disappearance of something like 20% of all rural bank loans to Indonesia during the Suharto administration.
More Say
Despite this gloomy picture, there are a few reasons to be optimistic about the future. Protests like those in Argentina earlier this year are having an impact. And democratising aid - giving citizens, especially those from countries receiving aid, the opportunity to say and even decide how aid should be used - is a concept that gives David Sogge hope.
"In Northern Mozambique a group of Mozambican and Danish development workers have devised a program based on a local development fund. And that's in a part of Africa that has no history of public participation in determining how public money will be used."
Letting policy makers and citizens decide together how best they can improve their lives is the simple yet much neglected message David Sogge offers us. Even the sceptics of aid say it should continue despite its flaws, few people are willing to suggest that it should stop. Whether at its best or at its worst, foreign aid is here to stay.
based on a report by Kim Brice, October 24, 2002
More Information on International Aid
FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
