Facts and fiction about development aid & what it means for China Arjan de Haan Senior Lecturer Social Policy Institute of Social Studies
development drama (or a missing dimension in China) Footnote: aid is not the same as development
Foreign Aid Does More Harm Than Good
Development Diva "Stop all development aid to African governments. A trillion dollars have not helped. Aid has only corrupted Africa and made it inert." "I stand by everything I have written in Dead Aid. Western countries have had their chance in Africa. It is time for different solutions." And Moyo presents China as alternative!
... knee-jerk reaction Karimi (Oxfam Novib) compares Moyo to Ayaan Hirsi Ali, the Somali-Dutch anti-islamcrusader. "In the end, what has Hirsi Ali really accomplished with her harsh criticism of Islam? She offered few solutions for the integration issue, and she polarised people. Who still talks about her now?" Tony Dietz compares Moyo with Dutch antiimmigrant politician Geert Wilders (PVV). "The same professionalism, the same extreme simplification of the message, the same lack of serious alternatives."
controversy elsewhere World Bank loans India $1bn for Ganges river clean up To exclude and hurt the majority of Indian citizens in the name of development and poverty alleviation is not merely callous, it verges on a social crime.
The supporters
Boston Review: Development in Dangerous Places Paul Collier: If richer states provide security, the poorest can finally grow. The world's poorest countries have diverged from the rest of mankind. They will never tap their vast reservoir of frustrated human potential unless the international community provides basic public goods that go beyond the typical aid agenda. Willem Easterly: Collier wants to de facto recolonise the bottom billion
the entire development discourse is Western created... [and] causes the problems it supposedly seeks to solve International aid is one of the most powerful weapons in the war against poverty. Today, that weapon is underused and badly targeted. There is too little aid and too much of what is provided is weakly linked to human development. Fixing the international aid system is one of the most urgent priorities facing governments at the start of the 10-year countdown to 2015. HDR 2005 (and HDR 2010 will revisit)
Aid Industry: 7 key characteristics 1) Motives: 1/3 historical, 1/3 political 1/3 poverty 2) Evolves rapidly (buzz-words) while structure similar 3) How much money? - ODA: US $ 100 billion + = fairly stagnant - Other: 50 billiion
Aid in perspective 11
Aid in perspective 12
0.7 % in perspective (against Dutch average income) 35,000 30,000 25,000 20,000 15,000 10,000 5,000-1970 2010 0.7%' 99.3%'
Net private capital flows to developing countries $ billions 700 600 Percent of GDP (right axis) $647 billion in 2006 (left axis) Percent 6 5 500 4 400 300 3 200 2 100 1 0 Source: World Bank. 1990 1992 1994 1996 1998 2000 2002 2004 2006 0
Remittance flows continue to expand Migrant remittance flows Migrant remittance flows / GDP $ billions $206 billion 200 Middle-income countries Low-income countries Percent 4 150 3 Low-income countries 100 2 50 1 Middle-income countries 0 2000 2001 2002 2003 2004 2005 2006 0 2000 2001 2002 2003 2004 2005 2006 Source: World Bank
4) Organisations 21 multilaterals different models 40 large bilaterals 20,000 international NGOs New actors Development studies Large and growing numbers of organisations = fragmentation
5) New challenges 7 6 5 4 3 2 1 0-1 -2-3 5.4 1.9 5.1 Developing countries 6.6 6.1 6.1 5.6 5.5 4.3 4.1 4.7 4.5 3.8 4.0 2.9 1.6-1.2-2.2 Africa East Asia South Asia Western Asia Latin America 2008 2009 2010
6) Effectiveness agenda Partly driven by external critique Partly driven by modern public sector management to show results (politically importance) Distortive effects and conflict ownership (social sector emphasis) Coherence: trade, global public goods
7) Ownership agenda From projects to programmes to budget support ( conditionalities ) From structural adjustment to PRSPs Paris Agenda: Recipients development priorities Donor coordination But: how much progress?
Some ideas about differences and similarities wrong reasons for concern about China China is a new colonial power China keeps development cooperation secret China gives help with preconditions China plunders Africa China doesn t separate aid from commerce good reasons for concern How can contributions and lessons international community be protected Donor coordination is critical Aid should not increase unsustainable debt and postpone necessary reforms Money in wrong places can do serious damage
The intellectual challenge...