Their concern and noble intentions notwithstanding, a well-rounded view of the situation is needed in which responsibilities should also be assigned proportionately without which more aid may be poured into a country but the issues may linger on year after year after year.
Aid-recipient countries of the various parts of the third world that have been receiving aid for over four decades ought to know better whether poverty can be made history only through aid or through debt-cancellation in case aid is not turned over into development through which debts may be serviced in time before they become onerously burdensome. When the slogan for aid is coupled with debt relief, it shows that past aid did not help turn the wheel of the economy which is why debt relief is sought.
More aid might be counter-productive unless the reasons behind poor utilization of earlier aid are known and remedied. If earlier reasons for failure are not known, aid might again sink into a pit and get lost without achieving the aid objectives. It is because of these kind of unfortunate experiences with aid that terms like aid fatigue, aid weariness, and aid disillusionment were coined. The donor countries experienced “aid weariness” as their staff experienced battle fatigue in aid operations and the recipient countries became “disillusioned” with aid as aid did not help them stand on own feet.
The reasons for the above failure were many. These include, a) insincere governments and corrupt establishments more interested in diverting aid inflows to personal coffers than for the development of the country, b) aid inflows channelized towards some pet projects with low social benefits and high costs due to the collusive network of which the policy-makers too were a part, c) aid inflows came tied with foreign prescriptions vis-à-vis development that did not suit the ground realities or did not generate external economies enough to provide a tractive effort to other economic sectors thus pulling them all up in a well-coordinated development push/thrust—examples may be forced premature industrialization, corporate farming, or emphasis either only on ‘bigness’ or on ‘small size’ without being able to determine a judicious mix of the two, d) aid tied with foreign prescriptions was bought into by local “brains” in the policy corridors that experienced the phenomenon of “internal brain drain,” that is, the local “brain” is not “drained” out to foreign land physically but is mentally and intellectually subservient to policy priorities determined in and dictated by the more developed countries MDCs).
They thus lose capacity or do not possess it from the outset to think indigenously for local issues according to the initial conditions and the prevalent ground realities. Big push to imported “false paradigms” is thus provided by none other than local “brains” who either lack the intellect or the nerve or both to think indigenously and are personally rewarded in the process which provides them with an additional reason to toe the “false paradigm” not likely to initiate a development process that would turn aid over into ability to service it and to graduate over time from a debtor to a creditor nation, e) the “false paradigm” is further bought into as it promotes the vested interests of a coterie of wealthy elite groups who, in alliance with the policy elite in d) above, further strengthen it irrespective of whether or not the gains are dispersed widely, f) as the wealthy and the policy elite forge a strong alliance, the network is strengthened further with the suppliers of the false paradigm in whose interest it is to promote their view of the economic world which they do with ease as virtually none of those-who-matter challenge them from the third world, g) the upshot is that the third world “grows” in a divided manner with the beneficiary groups of d) and e) gaining in all respects and the poor losing out more because of the “intellectual poverty” within the third world itself due to which there is total ignorance of the fall-out of the zero-sum game the powerful play with the materially deprived constituents of their own society, h) the society then remains weak structurally, institutionally, and attitudinally that development economists lament about without dealing with the causes upfront, i) consequently, “absorptive capacity” for aid remains low or non-existent, j) with aid not utilized for the benefit of all, the ability to service it remains impaired, and k) eventually “debt relief” is sought as aid failed to convert into development and thereby into an inability to service the debt and into a requirement for even more aid..
How does Africa fit into the above convoluted scenario? According to studies done on the subject, aid to Africa increased by 130 per cent after 1981 when the World Bank called for doubling of aid to Africa but incomes fell and poverty increased during a decade called the “lost decade” (Dawn, 25-6-05). The campaigners also called for trade. One, however, needs to know about the extent to which the preferential trading terms have been of benefit to Africa. And, what is the export potential of the African countries at this stage that cannot be developed because of subsidies elsewhere?
With aid comes the savings-investment paradigm and with a huge savings gap in this continent, the gap is likely to be filled with foreign investment. The question is whether foreign investment will be able to close the income gaps in this continent with the labour-saving technology the foreign investors are likely to deploy. Unless employment is created, the economic woes of the multitude are not likely to disappear any time soon.
Due to short memories and recent/partial reading of economic history of late developers who have now made their mark in international trade, the solution appears to be only in investment and trade when the late developers in South East Asia went through a complete government guided economic process that eventually brought them to the stage that everybody now sees as worth emulating. While the late aspirants wish to emulate the visible results of success stories, they do not want to replicate the process that led up to it. As for the process, this must come tied with aid, that is, emphasis on growth with government’s role only in social sectors’ development.
Economic growth and social sectors’ development may not necessarily square unless the underlying situation, discussed earlier in this article, enables a sharing of benefits. This is least likely to happen for as long as the power structures, institutions, and attitudes remain anti-developmental inhibiting the development of capacity to enable growth-with-equity that the much appreciated late developers experienced and turned conventional wisdom of grow-now-distribute-later on the head. In fact, the late developers in East Asia did not just grow with equity by distributing from growth, they distributed assets before growth to enable an equitable sharing of fruits from growth.
We see none of the above happening in Africa currently. When the G 8 countries cancelled the debt of the world’s poorest 18 countries in June 2005, the question arose whether their governments have the capacity to deliver education and health. Such concerns linger on now too that the aid to Africa has been doubled to $50 billion by the G 8 during their meeting early July 2005 in Scotland. The African heads of the government welcomed the decision for reasons of diplomacy and also because the recipient governments’ position is strengthened.
So, even though aid is given many a times to reach the poor and however much the donors may emphasize this goal, governments—desirable or undesirable—get strengthened in the process which, in turn, determines whether or not aid objectives will be achieved. This is a knot that not many have been able to unfold.
So, those who know about the downside of aid may not be too optimistic. Bono, Bob Geldof, and other Live 8 concert players, being not too comprehending on this front, may be disappointed at the amount of aid sanctioned. But why does Jeffrey Sachs, a renowned Harvard economist, want more aid for Africa? Behind the coalition against poverty were scores of NGOs. Does Sachs want development funds to be channelized through NGOs instead of the GOs (government organizations)? Even if this were to be the case, how will the NGOs reach beyond the political leaders and tribal chiefs caught up in an intricate web of power politics in Africa that involves dispensation of precious resources as patronage to just a few with the multitude bypassed.
Is aid then meant only to bandaid the wounds that the system inflicts on the people or to overhaul the system completely without which poverty is likely to remain as current as ever in all those countries where the malaise of poverty may be common but not the solutions that need to be region- and country-specific.