The Growing Opposition to Foreign Aid

Aid is universally measured as ‘Official Development Assistance’; the quantity of financial assistance, loans, grants and relief1.

The paradigm of the 20th century was foreign aid being the most efficient action available to the G20; international intervention serving as the enabler of development, free from external dependence (although this the more disputed). This thought has been a kingpin in every plan and most policies on this issue, notably The Millennium Development Goals and the various charities. With approximately $120billion per year1 transferred from developed to the less developed, and aid representing a stratospheric 70% of total government receipts across Africa2 (!), the ‘beggar thy neighbour’ is massive. It is a very important issue of debate, and thus deserves a high degree of attention; surely all this is benevolent?

Aid, like First World Plans are a source of debate. The MDG’s cite to 2015 as the deadline, but are behind schedule. Critics point to the non-responsibility of such idealism as a flaw.

The benefits of aid, be it through loan or grant appear logically correct. When giving the recipient is able to build schools; develop infrastructure; buy mosquito nets and the like to set the country in motion. In fact, it is instinctive of the more developed to play the ‘knight in shining armour’ and encourage donation, a moral duty which is illustrated in the attitudes of many.

A Growing Opposition

Opinions on aid are polarized, gaining momentum the opposing arguments to aid, possibly the most poignant being that of Dambisa Moyo and Bill Easterly. Following from the shockingly high % of government revenues being assistance, Moyo stresses in ‘Dead Aid’ that governments neglect developing their own economy if they are receiving ‘free money’ from the first world, being more concerned with their relations with donors2 then their own citizens wellbeing. With empiricism, we can certainly look at the corruption of Eritrea and Sierra Leone, economies with aid accounting just shy of 30% GDP3!

A more sinister argument and sadly, reality, is the retention of aid by the government for their own pleasures, a stomach wrenching crime for which Mobutu or Zaire among others was capable2. The quantity of aid is measurable, but what about the accountability? The question is whether aid is necessary, even when no regard to the above conditions is given; the phenomenal 9% average growth of Botswana from 1966-99 accompanied falling aid per capita, loans for industrialisation actually created a ‘lost decade’ for Latin America in the 1980’s.

A proponent of aid, Jeffrey Sachs, uses the counteragurment of the Global Fund to Fight Aids  to advocate a private sector, investment driven approach to aid where results are more accountable4. This shall possibly precede an approach to charity of a competitive pitch to investors, results driven, instead of government bilateral aid which has been the target of the opposition.

Aid as beneficial is culturally instilled, and we feel good about ourselves when we ring up Children in Need to donate a tenner or so. It is interesting to observe a growing opposition to this given assumption.

  1. Composition:http://www.un.org/millenniumgoals/pdf/MDG%20Report%202010%20En%20r15%20-low%20res%2020100615%20-.pdf#page=69
  2. Dambisa Moyo Wall St Journal: http://online.wsj.com/article/SB123758895999200083.html
  3. Statistics: http://www.nationmaster.com/graph/eco_aid_as_of_gdp-economy-aid-as-of-gdp
  4. Jeffrey Sachs: http://www.ft.com/cms/s/0/4c510f34-c4fb-11df-9134-00144feab49a.html#axzz1iL6IRod9
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