Wednesday, February 16, 2011

Selling Foreign Aid

In the midst of austerity measures and looming deep cuts from the "donors" budgets. An interesting read to sell foreign aid to the skeptic masses.

So perhaps the public does not need to be persuaded that development matters, but needs instead to be convinced that aid makes a difference. Even so, it seems reasonable to say that we should use every argument at our disposal for aid: we should appeal to the public’s self-interest as well as their moral values, and we should at the same time set out the evidence that aid works.

The most popular critique of aid in recent years, Dead Aid by Dambisa Moyo, does not challenge aid on the grounds that the plight of the poor is not our concern. It is a poorly argued book in many other respects, but it would be wrong to accuse Dr Moyo of callous indifference. Indeed, all the famous aid sceptics, from P. T. Bauer to Bill Easterly, explicitly accept development as the objective: they simply question whether foreign aid is a good way to achieve it.

The aid that was used to prop up Mobutu in Zaire during the Cold War may have served a foreign policy interest, but it did little or nothing to reduce poverty and raise living standards in that country. Money used today to buy food aid may be a convenient subsidy for American and European farmers but if we bought the food locally we could feed twice as many people with the same money and at the same time support the growth of sustainable agriculture in developing countries. The more we use aid to support our strategic and commercial interests, the less effective that aid is likely to be in the fight against global poverty, in which we have an important long-term interest.

The above paragraph demonstrate what is really wrong with the current aid structure. Not only the WFP food, the same system is applied in PEPFAR/Global Fund drugs. Effectively (with TRIPs) destroying South's capacity in pharmaceutical industries. Yes, South needs aid, but it shouldn't be used as North's corporates welfare.

The rest of the article.


Anonymous said...

if you beg you can not choose. We will continue to be corporate welfare or in other words basket case until we figure out how to develop without begging. The worst case is we are told to follow particular standards in order to succeed for example MDGs. But are those standards really for us? or are we really repeating mistakes?

for example MDG 2 which is for education talks only about quantity and not quality- lo and behold we followed it, with a lot of aid money. We built "kata" schools all over the country that we can not support. Only to win the MDG award. So the result is 50% of our students fail our own standards. The ones that passed (see stats in Nathan's entry below) are close to 40,000 students. Similar amount to 1980s. Mzee Mwinyi had told us in the 1986 speeches that we can not continue to get service for free, especially education and health, and expect sustainability and elevation of quality. We didn't listen.

The result is that schools are becoming the machine which produces semi literates. Too educated to use the hand hoe in the village but not skilled enough to form part of the knowledge base economy - which we are importing still.

So aid with the aid based standards are creating a semi literate nation which will continue beg, because not skilled enough to produce anything valuable. It is time to focus on what we really need - Economic Growth through infrastructure investment. It is time to push the donors (we addicts, too soon to tell off the pusher) that we need infrastructure and not more schools or hospitals. It is time for electricity build up - Stiler's Gorge anybody?? how about bringing our 18th century railway line to the 21st century? connecting it to ports from Indian Ocean to the inland lakes? transit trade?? why should we still import meat? or juice (Ceres/Del Monte?) while we drink Azam powder crap, while our lushoto fruits are rotting away! I didn't touch the minerals?, tourism? manufacturing? technology?

The day that we will stop thinking that donors drive our show, and even if using aid, but start telling them that we want Economic Growth instead of Human Development. That is the day we will start seeing the light. Because the paradigm is actually up side down, we need a stronger economy in order to have the capacity to deliver the Human Development services.

If we continue on this trajectory of investing in the so called basic human needs so we can have a fair shared society, all what we are sharing really is poverty and ignorance.

Its time to wake up! it can be done!

Thuwein said...

I couldn't agree more with anony hapo juu. There is a stat that many finance ministers in LIC spend most of their time jockeying with donor requirements instead of crafting proper monetary/budget policies. But, we are in a situation where ~40% of our budget is from donors (with string attached) and swali la msingi ni how do we get out of this mess? With huge debt burden as well. Can we default? Like Argentines did it in 90s. How do we improve our local manufacture so as we can compete in WTOs? How do we improve our human capital to become competitive? and most importantly where will our energy come from?

I think those are really tough questions but they have to be addressed by our leadership if we have a chance at prosperity.