The Road to Hell The effectiveness of international aid to Africa and an exploration of alternatives for the future Tami Fawcett 10/8/2012 Global Studies 322 Professor Naseem Badiey
Introduction Over the last sixty years, developed nations have sent approximately $1 trillion in development-related aid to Africa and still over 50% of the population lives on less than a dollar a day. This rate of extreme poverty has nearly doubled over the last twenty years despite an increase in aid sent to Africa to about $50 billion a year.[1] If so much aid money has been sent to Africa over the last six decades, then why haven t the African people seen the benefits of such and been lifted out of poverty? An even more troubling question: why have poverty rates doubled in the last two decades for an additional quarter of the population? The answers to these worrisome questions lie in the ineffectiveness of international aid. You don t need to be an economist to figure out that the current model of aid for Africa is clearly not working to reach its goal of lifting Africans out of poverty. This is a classic case of good intentions paving the road to Hell. Despite claims by many non-governmental organizations and international institutions, such as the World Bank and the International Monetary fund, that aid to Africa is working and need only be increased to have the desired effect of actually reducing poverty, I am inclined to believe the body of convincing evidence that suggests the current model of international aid has not only been ineffective, but that it actually has adverse effects on Africans in many instances. The best route forward for international aid to Africa is a model which evaluates current aid practices, tosses the ineffective practices out the door and replaces them with new poverty fighting strategies that Africans largely develop themselves. It is important to understand that this problem is not as black and white as it may seem and there are certain instances where aid is relatively effective. There are many instances where the idea of international aid is even quite popular by the majority of African citizens in a given country, such as Uganda. Still there are many more examples where aid is destructive and there is at least
one instance where an African country, Rwanda, is moving to reject international aid completely. I will explore such instances in an effort to avoid a reductionist presentation of the issues and to provide an ideal framework for the international aid model in the future. Effective Aid One of the most compelling arguments for international aid is one that economist Jeff Sachs espouses and unabashedly proselytizes around the globe. Simply, international aid saves lives. For instance, a 2012 study by The World Bank concluded that Kenya s infant mortality rate fell by 7.6 percent per year, and the post-neonatal rate fell by more than half over five years, dropping from 47 to 22 per 1,000 live births from 2003 to 2008. The cause of this drop, according to the World Bank, is linked to increased ownership of pesticide treated mosquito nets. According to this same study, Kenya is not alone. Infant and under-5 mortality rates have declined significantly in sub-saharan Africa over the last twenty years.[2] However, upon further investigation into this report, the researchers add that other broad institutional changes in these sub-saharan African countries over the past 5 years also play a role in the decrease in infant and child mortality rates. It is difficult to determine exactly how each change correlates to the decrease in rates, which is an example of how difficult it is to actually measure the effectiveness of aid. Sachs concludes that it is an increase in international aid from donor countries after the proposal of the Millennium Development Goals in 2000 that has significantly reduced the spread of AIDS, malaria and tuberculosis in Africa.[3] In addition, simple vaccines have saved at least $5.4 million children, according to GAVI.[4] Sachs goes on to explain that it was the sharp increase in aid (from $7.9 billion in 1995 to $26.9 billion for 2012) that allowed donor countries,
non-governmental organizations and multilateral organizations, such as the UN, to develop programs to address the healthcare crises in Africa. He proposes that another $10 - $15 billion in aid would enable even greater progress toward the goals of eradicating treatable and curable diseases in Africa, as well as infant and mother mortality rates during childbirth. There is no dispute that international aid has made progress in disease prevention, treatment and eradication over the last few decades in Africa, as well as in other areas of healthcare. However, the amount of progress that has been made is hard to quantify. While aid for healthcare seems to be generally effective, we must define what effective means and what we are comparing it to. For instance, if we are comparing the effectiveness of aid going towards healthcare in Africa to other policies that might also help save lives, then is aid actually the most effective route? While 5.4 million children saved in 2010 seems like a significant number, we must understand the context of it in the broader sense. If 7.6 million children a year are still dying of preventable and treatable diseases, then has the aid going towards healthcare really been that effective? The answers to these questions are not easy, but they serve as an example of just how complicated it is to determine the effectiveness of aid. It is difficult to come up with legitimate data that actually quantifies international aid s effectiveness to the people of Africa, or any other developing nation. It also makes it easier for proponents of international aid to be impressed by the large numbers to which they ascribe a certain level of triumph and then trumpet as the cold, hard facts that aid works. Ineffective Aid For all of the effective aid that goes into Africa and other developing countries, there is a
lion s share of ineffective aid. According to The Journal of Developing Studies report on foreign aid and human development factors, Sub-Saharan African countries have the lowest GDP growth amongst developing countries, despite receiving the most amount of aid, comparably.[5] Another troubling indicator of a lack of effectiveness is seen in the Human Development Index (HDI) for Sub-Saharan countries. Out of 18 countries that saw backwards reversals in their HDI between 1990 and 2003, 12 were Sub-Saharan African countries. For the amount of money that is poured into these countries, this just simply should not be. Specifically, bilateral aid, which is aid received from donor countries and goes directly to developing countries governments, is the least effective, according to The Journal of Developing Studies report. One theory behind this, and one that is supported by Dambisa Moyo, is that this type of aid causes the governments to become dependent and complacent with their budgeting. It creates a governmental climate in which creativity and innovation to tackle budget and social welfare issues is not practiced. It also weighs these countries down with large debt and high inflation rates, which only serves to slow their growth further. In addition to the slow growth, revenue generated by these countries is then used to pay down debts rather than used to invest in the social welfare and development of their people. Another consideration in the ineffectiveness of aid is that the agencies and organizations that rely on aid as an industry to sustain their organizations have an incentive not to distribute aid in a way that is completely, or even significantly, effective because it will mean the end for their organization once the need for aid is no longer present. Couple this with the fact that there is no central body of regulations and oversight on the aid industry and it makes for a number of projects and operations that are not running effectively to aid the African people. A key flaw of aid s effectiveness is often that it is delivered based on the interests of the
donor and not the needs of the recipients. For example, the Peace Corps, and other organizations go into a village and survey the area. Then, from a Western perspective, that organization determines what is needed for that village, often without actually consulting the people of the village. In one research paper entitled A Helping Hand, the author remarks that the people in a rural village in the Dominican Republic were more concerned about a school being built to educate their people and yet the Peace Corps went in and built a water pipe, instead.[6] The villagers were quite dismayed by this and it is easy to see in this example how aid can work as a form of imperialism and cause resentment amongst the population. The type of government that is receiving the aid, when aid goes directly to a government, may also play a large role in to whom and how that aid is distributed. Many autocratic regimes use foreign aid as leverage against their own population as a way to wield even more power over their citizens. International aid has long been used by corrupt or failing governments to solidify their power over the various peoples by rewarding those who are loyal with aid and withholding aid from those who would seek to speak against the government. Though there are often certain conditions placed on governments when accepting aid, particularly with bilateral types of aid, there is still a historic record of the West choosing the wrong side of history and propping up autocratic and non-democratic regimes with donor money and assistance. This is why we often see political instability, famine and internally displaced persons or refugees in developing countries. Aid is not only ineffective in this instance, but it is used as a strategic weapon to siphon power from one group and give it to another if it is placed in the wrong hands. Alternatives for the Future Now that I have discussed the main points of both sides of the debate on international aid,
I will discuss my recommendations for the future of the aid industry. Firstly, it is important for all aid agencies, whether multilateral organizations or small NGOs, to listen to the local population. It is imperative to gain the trust and respect of the local population, and no one knows better what is needed than the people themselves. According to Asiama and Quartey, effective aid projects tackle specific issues within local communities and programs and show the greatest effect on human development factors But, even this strategy, coupled with publicprivate partnerships, should be used only in the sectors where it has the greatest effects. These alternatives are not a one size fits all solution for Africa. Next, I will propose an idea that is regarded as radical, and perhaps even unfeasible, by most accounts. However, in researching the issues with aid effectiveness, I found that one of the greatest challenges, particularly in bilateral aid, which accounts for the largest portion of aid to developing countries, is that the actual citizens on the ground are often the ones who suffer through the high interest rates of loans, the liberalization of the economy through SAPs, and the subsequent reduction in social services and infrastructure that is so desperately needed by an impoverished population. The cycle of debt and servicing of debt fees only continues to feed poverty in the global South and keeps the people there at the mercy of the local elites and the global North. The global North has spent centuries plundering the resources from Africa and the rest of the global South, so in the eyes of some, the global South has repaid the North many times over. If the North would only forgive the debts of the last 4 or 5 decades, the South could use the revenue that is freed up to invest more in their own social welfare programs, research and development and infrastructure. As people gain more economic investment in their country, they also gain more political agency and power. This is essential in producing governments that are
reflective of the population and not governments that are simply friendly or subservient to the West. Another component of effective aid for the future would be to raise the trade barriers that the global North imposes on developing countries. Enact true free trade policies that do not simply favor developed countries and instead create a level playing field for all countries and international industries. This will enable African business to enjoy the same freedom as Western businesses in the international market. It will also help make African countries more attractive to foreign investment in the long run, which will, in turn, stimulate the local economies. Conclusion In conclusion, I would like to highlight the importance of treating Africans like partners and not like victims. Any form of aid reform that empowers the local population and creates a sense of pride and ownership within the people is going to be more effective in the long run than a project that is imposed from above by Western aid organizations or governments. It is important to not only provide temporary solutions, when necessary and where such strategies are effective, but to look forward to the future to find ways to increase the efficiency and effectiveness of the aid system through a weaning process. Ultimately, this will lead to stronger global economic partners (and consumers) in Africa, as they innovate and create their own solutions, all while helping to lift themselves out of poverty.
Bibliography Asiama J.P., Quartey P. Foreign aid and the human development indicators in Sub-Saharan Africa (2009) Journal of Developing Societies, 25 (1), pp. 57-83. Demombynes, Gabriel and Trommlerova, Sofia Karina. What Has Driven the Decline of Infant Mortality in Kenya? May 1, 2012. World Bank Policy Research Working Paper No. 6057, http://ssrn.com/abstract=2050847. "GAVI's Impact." GAVI Alliance. http://www.gavialliance.org/about/mission/impact/. Gulrajani, Nilima. Transcending the great foreign aid debate: managerialism, radicalism and the search for aid effectiveness (2011) Third World quarterly, 32 (2). pp. 199-216. Lal, Erika. "A Helping Hand: Alternative Strategies to Foreign Aid." July 28, 2011, http://www.academia.edu/1315436/a_helping_hand_alternative_strategies_to_foreign _Aid. Mitlin, Diana and David Satterthwaite. Strategies for grassroots control of international aid, Environment and Urbanization Vol 19, No 2, October 2007, pages 483 500. Moyo, Dambisa. "Why Foreign Aid Is Hurting Africa. Wall Street Journal, March 21, 2009, Africa News section, http://online.wsj.com/article/sb123758895999200083.html. Moyo, Dambisa. Dead Aid: Why aid is not working and how there is a better way for Africa. New York, 2009: Farrar, Straus and Giroux. Sachs, Jeffrey. "Foreign aid works it saves lives." The Guardian, May 30, 2012, Business section, http://www.guardian.co.uk/business/economics-blog/2012/may/30/foreign-aidworks-saves-lives.
[1] Moyo, Dambisa. "Why Foreign Aid Is Hurting Africa. Wall Street Journal, March 21, 2009, Africa News section, http://online.wsj.com/article/sb123758895999200083.html. [2] Demombynes, Gabriel and Trommlerova, Sofia Karina, What Has Driven the Decline of Infant Mortality in Kenya? May 1, 2012. World Bank Policy Research Working Paper No. 6057, http://ssrn.com/abstract=2050847. [3] Sachs, Jeffrey. "Foreign aid works it saves lives." The Guardian, May 30, 2012, Business section, http://www.guardian.co.uk/business/economics-blog/2012/may/30/foreign-aid-works-saves-lives. [4] "GAVI's Impact." GAVI Alliance. http://www.gavialliance.org/about/mission/impact/. [5] Asiama J.P., Quartey P., Foreign aid and the human development indicators in Sub-Saharan Africa (2009) Journal of Developing Societies, 25 (1), pp. 57-83. [6] Lal, Erika. "A Helping Hand: Alternative Strategies to Foreign Aid.", July 28, 2011, http://www.academia.edu/1315436/a_helping_hand_alternative_strategies_to_foreign_aid.