AFRO-NETS> World Bank: Global Campaign to Halve Extreme Poverty... (3)

[Claudio Schuftan <aviva@netnam.vn>]

World Bank: Global Campaign to Halve Extreme Poverty... (3)
-----------------------------------------------------------

Mr Wolfensohn is still optimistic that lenders and donors will help 
us get there....But:

1. Foreign aid is rightly accused of many things: being based on a 
false logic: doing more harm than good; maintaining (and protecting) 
the status quo in Third World countries; undermining food autonomy; 
being a political weapon of the rich countries; perpetuating underde-
velopment. There is no indication that policies regarding this aid - 
both in donor and recipient countries - are changing drastically de-
spite mounting evidence for the above claims.

2. Short of a call for an overall discontinuation of all aid, foreign 
aid can play a role in fostering development, but not just any kind 
of aid. In this context, it is important to determine which kind of 
aid would be needed, for whom and under what circumstances.

3. But foreign aid has its own politics. Simply denouncing its dele-
terious effects is not enough. Some political actions need to be 
taken.

4. The mere thought that foreign aid can automatically bring mutual 
benefits is simply a political fiction. Moreover, the assumption that 
this aid can be neutral is as shaky as the now-discredited notion of 
a value-free education. Present day aid policy makers, therefore, 
have to be confronted with the pressing questions regarding the rele-
vance of their own work. Development assistance cannot automatically 
be considered as well-suited to developing countries. In the interna-
tional development community, it has actually gotten a rather bad im-
age as a resource that has been poorly used. Mostly, the way it has 
been used is what has given it its bad reputation.

5. The fact that most formulas for using aid moneys were actually de-
veloped to expedite rapid disposal with minimal financial and politi-
cal costs has conditioned the current drawbacks that have been 
pointed out. The result is that there are serious deficiencies in the 
operation and theoretical foundation of Northern foreign aid pro-
jects. These projects are often not implemented as planned and ulti-
mate impacts remain unrealized.

6. Aid is extremely vulnerable to political pressures and is an area 
in which 'politics literally stands directly between life and death'.

7. Some seem to believe that without foreign aid, the present devel-
opment crises would be even worse. If this view were correct, there 
would be no reason to alter present development strategies and one 
should simply spend a great deal more money on them. The basic prob-
lem, however, is that these present strategies do not adequately ad-
dress the issue of Human Rights violations, the issue of redistribu-
tion of assets and income, the issue of income generation for the 
poor and of expenditures for public services for the poor.

8. Therefore, for alternative development strategies to become a cor-
nerstone of genuine development (such as the Human Rights-based ap-
proach), policy cannot be usefully discussed outside a broader geo-
political and socio-economic framework. Much more far-reaching steps 
must be taken to avoid the catastrophic failures of the past.

9. Moreover, the sad reality is that aid given with one hand is actu-
ally being taken away with the other. The debt trap in which many a 
developing country is caught makes it necessary to service the debt 
in hard currency, this directly undermining the whole idea of foreign 
aid.

10. Another valid criticism voiced about aid is that it gets too in-
volved in looking at improving the system's management, ignoring the 
need for the system's reform. Donor agencies somehow avoid raising 
the issues of structural changes, because of the conflict of inter-
ests this inherently raises for them. For many, aid is actually still 
coupled with a strong belief in the (discredited) trickle-down proc-
ess despite the evidence that the actual value of the net transfers 
from most foreign-funded development projects is often less than 30% 
of the budgeted funds; a big proportion of it, donors spend at home 
in procuring goods and expensive consulting services (often far re-
moved from the realities in the South).

11. Further, there has also been a trend away from aid to the lower-
income countries. The concentration of US aid on only a few coun-
tries, for example, shows that its objectives are strategic rather 
than humanitarian. But the US is not alone in this.

12. On another political note, donors actually agree that aid can 
discourage local production, increase dependency, alter people's hab-
its, encourage corruption, and not reach the more needy. Neverthe-
less, they contend that none of these problems need happen under 
'proper' safeguards. They genuinely seem to believe that aid, when 
used for 'strict' developmental purposes, can be made to have none of 
the above drawbacks. How this is going to come about is seldom elabo-
rated upon.

13. In addition, the same aid often causes severe budgetary and lo-
gistic problems to the recipient countries since donors often pay for 
only some (or none) of the local recurrent costs.

14. According to Susan George, the following postulates are generally 
true for most countries receiving foreign aid: - A strategy that 
benefits the least well-off groups will not be acceptable to the 
dominant groups unless their own interests are also substantially 
served. - A strategy that benefits only poor classes will be ignored, 
sabotaged, or otherwise suppressed by the powerful, insofar as possi-
ble. - A strategy that serves the interests of elites, while doing 
positive harm to the poor, will still be put into practice and, if 
necessary, maintained by violence so long as no change occurs in the 
balance of social and political forces.

15. To be more effective, foreign aid should:

- generate a multiplier effect on the amount of resources allocated 
for other anti-poverty programs in the recipient country; 
- primarily meet the transitional needs and costs of such anti-
poverty policy adjustments, acting mainly as a catalyst; aid is good 
only when used as a vehicle of transition; 
- in some way help increase the bargaining power of the poor and the 
politically marginalized. For this to occur, peasants must be helped 
to form or strengthen their own representative associations.

16. If a recipient government cannot agree to these basic conditions 
- which will necessarily alter the internal balance of power - the 
syllogism would indicate that it would be better for the donor to 
withhold aid.

17. But perhaps aid needs to be rethought and restructured, not nec-
essarily withdrawn. That will require fostering the political and 
economic changes necessary to make it possible for aid to really make 
a difference in the recipient country. The risk is for the latter ef-
fort to become another area for the donors being (rightly or wrongly) 
accused of neo-colonial interference.

18. The real commitment to the eradication of Human Right violations 
such as hunger, malnutrition, ill-health and all the other implies a 
massive assault on the roots of underdevelopment and poverty. Foreign 
aid thus only adds false hopes to the prospects of poverty allevia-
tion. At best, food aid treats the symptoms of poverty, not its 
causes.

Anybody moved to react?

Claudio Schuftan
Hanoi, Vietnam
mailto:aviva@netnam.vn

--
Send mail for the `AFRO-NETS' conference to `<afro-nets@usa.healthnet.org>'.
Mail administrative requests to `<majordomo@usa.healthnet.org>'.
For additional assistance, send mail to:  `<owner-afro-nets@usa.healthnet.org>'.