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To Aid or not to aid

Apr 26, 2012

As a concept, Development aid has always had a murky past and now, an unsure future. With the financial crisis cutting back on the general feeling of 'giving' in the North; it remains to be seen where aid goes from here. Is the golden age of Aid and the 'good feeling' truly over yet?

Buzzword or a buzz kill, Aid is certainly on everyone’s mind and agenda now a days. The recent brouhaha was about the cuts in aid money according to the 2011 OECD report. According to the report, aid from rich countries was $133bn in 2011; a fall of $3.4bn. While aid as a share of national income fell from 0.32 per cent to 0.31 per cent, leaving the target of the promised 0.7 per cent of national income as aid off the mark. Of the 17 countries who give aid, only five have reached the target in 2011: Sweden, Norway, Luxembourg, Denmark and the Netherlands.

As the debate swirled further, the question of 'to aid or not to aid' preoccupied news space and development circles again. On one side, optimists tag Aid as the goodwill of nations, while on the other hand sceptics dismiss it as a play of politics that is better avoided.

Jayati Ghosh, leading economist and a member of the National Knowledge Commission, India; in her interview with the Guardian newspaper, was rather vocal on what side of the debate she is at. Ghosh called India’s development problem as one of political economy. Attacking Britain’s attitude towards aid, she accused Britain of not being serious, and that if it was serious, it should go ahead through a change in their trade, investment, and intellectual property rules.

On one side, optimists tag Aid as the goodwill of nations, while on the other hand sceptics dismiss it as a play of politics that is better avoided.

In many ways, Ghosh’s logic does make sense. For the longest time, giving away cash was seen as the way to help nations in the global South to prosper. Concepts of self-sustenance are late entrants into the development agenda of nations. Ghosh’s assessment of the situation is a product of the historical tracing of the politics of Aid, and draws on the oft-referred to controversial American coercion through a variety of ways, like patent policy for instance. Though the Obama administration has changed its Patent bill to the chagrin of many, it remains to be seen what effects of this change would be. These kinds of 'systems' of aid are in tune with the views of Milton Friedman, Peter Bauer who called aid as a way of perpetuating dependence and just benefiting the rich of the recipient countries. On the other hand, many believe that the ‘bad name’ aid has is surprising; as  J. John, director of the NGO Centre for Education and Communication puts it, ‘Increasing national security concerns seem to define aid now, which is affecting the way Aid is seen.’ This to and fro between opinions often, puts the need for a re-negotiation of aspects like transparency, accountability and intent in the limelight.

With the recent aid cut, most nations used the pretext of dire economic conditions. The OECD Secretary-General Angel Gurria censured this by saying, ‘The crisis should not be used as an excuse to reduce development cooperation contributions’. What was more interesting was the resurgence of the ‘North in the South’ and the ‘South in the North’ debate. The power of balance shifting to the BRICS and the worsening conditions of social security and the not-so-privileged in the North has brought on a kind indignation about aid policy as a whole. More and more, the sentiment of why to give aid to nations who have strong GDPs seems to be on the rise. This of course, gives the whole discourse of development a new light. For surely, in nations like India and China, it is just a handful that enjoy the domino effects of these strong GDPs and the majority still survive on less than 1.25 $ a day: a clear signal of the expected trickle-down effect not taking place.

Of course, the intent of the donor nations is often questioned, and more often than not for good reasons. The recent repeal of US food aid for North Korea was a glaring example of how development aid is often used as a subtle coercion tactic and is not as innocent as it is made out to be. Though the US rejected North Korea’s nuclear aspirations as being the reason, it’s a no-brainer. In this sense, denial of aid being used as a tool to influence foreign policy or arm-twist becomes a farce. In February this year, Egypt’s ties with its strongest ally, the US got strained when it confidently refused to back down on investigations of suspected foreign funding for  NGOs and pro-democracy groups. The extensive aid China has extended and invested throughout Africa, has been also questioned time and again especially due to the lack of transparency about official aid and its pattern of investment. Even the recent aircraft deal between India's choice of French or British fighter jets did not escape the aid argument.   

On the other hand, the attitude of nation’s themselves is undergoing a change, and more and more countries of the South are looking at reversing the debate by aiming more at self-sustenance. Liberia’s president Ellen Johnson Sirleaf wants to see her country free of aid dependence within the next ten years. Such a proposition is easier for middle income countries (MICS) like India and China, as it all boils down to effective handling of their political economies and having an efficient system of social protection that perpetuates well-being to its citizens. Many have tried solving the schism between aid and its intent and effects; by classifying aid and advising a re-calculation of Aid itself if any actual work has to be seen. And this brings back the whole argument of the time for developing economies to look for other ways to solve their socio-economic problems.


The way to go?

Aid remains a fairly thorny problem; and current state of economic affairs has complicated matters further. This leads to aid enthusiasm lagging. Many see the golden age of Aid over and recall the enthusiasm of Jubilee 2000 and the immense philanthropy that took place in the beginning of the 21st century.

Despite all the debate, the thing about aid is that perhaps we’re asking the wrong questions. Whether or not countries in the South need aid, is a somewhat redundant question; especially if traditional markers of the ‘need’ are seen. What countries like India, China, Brazil face despite the galloping GDPs and trade, is a massive inequality conundrum.

The question to be asked should be what is being made of this Aid and how effective is its implementation. In 2009, the Bill Gates and Melinda Foundation pulled out of the HIV/AIDS program in India, on the pretext of passing control to local actors. But there are serious doubts on how much the aid money was used in carrying out the purpose. Perhaps the solution does lie in new actors coming to the forefront where Aid is concerned; especially local actors but with checks and balances in place.

Despite all the debate, the thing about aid is that perhaps we’re asking the wrong questions. Whether or not countries in the South need aid, is a somewhat redundant question; especially if traditional markers of the ‘need’ are seen. What countries like India, China, Brazil face despite the galloping GDPs and trade, is a massive inequality conundrum.

The point of local and ‘independent’ actors takes on two aspects. First, creating self-sustaining systems of aid, which would imply roping in the people who constitute the North in the South. Second, while politicisation of aid especially by the donor-recipient relationship is inevitable. There is a need to remove aid from other kinds of politicisation too. As John put it, there is a need for ‘locally generated resources’ and ‘develop a culture where aid is removed from religious or caste-based orientation’. This immediately removes the dependence issue as well as decreases the North-South politics part of things. In this sense, China, India, and Brazil had moved into donor territory long back especially as a part of South-South alliance in lieu of the Bandung Conference. Of course, increased transparency will ensure aid moves away from dubious objectives and claims, and shows how it was used. 

If one has to indulge in a lessons-learnt session; Haiti serves as a good example of how aid has been misplaced and misused. Let the debate swirl, but what must be the focus is a re-take of what Aid is supposed to be and create systems that keep a better check of the channels and implementation. And with that, try and usher in a second coming of the golden age of Aid perhaps.

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