How is UK Development Aid money spent? some useful tracking tools

Even with the recently announced cuts to UK development aid, the United Kingdom will still be spending around £10 billion a year on overseas aid from 2020 onwards.

£10 billion is a lot of money, so it’s fair enough that we should be able to keep track of where our tax money is going!

Thankfully it is relatively easy to keep track of where they money is being spent.

All you need to do is to go to the Foreign and Commonwealth Office’s Development Tracker

This tool provides you with an overview of the countries in which we spend most aid, and the areas of development – so you can see that last year we spent the most aid in Ethiopia and health was the main area of expenditure…

You can then click through to individual countries, and from there to individual projects, for example this link will take you to an overview of ‘solar Nigeria‘ – a project with a 5 year budget of £66 million to provide solar energy to schools and hospitals.

How do we measure the effectiveness of Aid spending?

NB – knowing where our aid money is spent is not the same as evaluating the impact!

To evaluate the impact of any of the projects listed on this site you need click on further tabs to get the the ‘documents’ (here), where you can read about how the project is going.

This should give you an insight into how difficult it is to evaluate the success of aid expenditure: just to keep track of the expenditure year on year is an effort given that there are so many different actors involved with spending the aid money – the FCO (previously DFID) works with projects which are already up and running, which can mean working with different partners.

Then you have to evaluated the impact in the context of the problems faced in local conditions – there are all sorts of issues such as conflict and corruption which may mean aid money not being spent as you’d like!

And this is just one project – out of thousands that UK aid money is currently being used to finance!

Is the UK right to cut Overseas aid to 0.5% of GNI?

The United Kingdom has been a world leader in providing Official Development Aid in recent years. In 2019 the UK was the third largest donor in absolute terms and the 5th largest relative to it’s Gross National Income.

However, that is now set to change as in November 2020 the UK government announced that it would cut UK aid from 0.7% of its GNI to just 0.5% – meaning that it will reduce from around £15 billion per annum to nearer £12 billion.

Arguments for reducing Overseas Development Aid

The main reason for the cut is that we are facing an economic downturn due to Coronavirus, and the Chancellor has said that it’s hard to justify spending money overseas when we are stretched to pay for health, education and benefits at home.

At first glance this relatively small cut to aid expenditure seems justified when the government is looking at a lower income next year due to a decrease in tax returns – because people have been spending and earning less, and because they have had to pay out more to support ‘furloughed’ workers, all of which has been borrowed, and thus increasing the national debt, which will have to be paid off with interest in coming years.

However, there are several arguements against cutting overseas development aid:

Arguments against cutting overseas aid

  • millions of children will go without vaccinations next year, and around 100 000 will die (presumably in 2020) from preventable disease as a result.
  • 2 million people will lose humanitarian support
  • almost 4 million will lost access to clean water.
  • (Source for the above)
  • and without this assistance more children will die.
  • Fewer children will go to school, one million fewer as a result of the 30% cut.
  • Ironically it may hurt economic growth – aid gives us influence in emerging markets which can benefit British businesses (especially as aid is now more targeted towards supporting UK interests).
  • It harms our national reputation as wanting to play a role in global governance, especially post Brexit.
  • It breaks a commitment we made to UN and breaks UK Law – the 0.7% was enshrined in law in 2015.

Find out more…

For more information on this topic, please see the links on my ‘Globalisation and Global Development‘ page.

The Problem of Private Sector Debt and Coronavirus in Developing Countries

This recent report by Global Justice Now highlights the increasing role of private sector companies in providing loans for development to developing countries.

Some of these loans often have quite significant interest rates, as you can see from this chart – the longer the loan term, the higher the interest rate:

NB the institutions holding these bonds (hence giving out loans effectively) are some fairly big name financial institutions, such as Goldman Sachs, Black Rock and HSBC.

There’s nothing particularly unusual about countries taking out loans for development, and the kind of interest rates above are not a problem IF GDP/ GNI can grow at a similar percentage to the loan interest rate – which has been the case in the above countries for the last several years.

The problem now is that with Coronavirus all countries have taken a hit to their GPDs, and growth rates globally have plummeted to around 0% – so now countries such as Kenya are in a situation for at least the next year where they have to pay all of that interest on their debts but without the growth the expected.

The problem with the loans coming from private sector companies is that they are less likely to offer debt relief (like a cut in interest rates) compared to public or aid agencies.

NB – these loan repayments aren not small, Kenya spends a similar amount of its health care system compared to its debt payments.

Relevance to Global Development

This seems to be yet another example of how Coronavirus is going to lead to increasing inequality – the Corporations continue to get their interest payments while the poor countries struggle with a declining GDP.

Please click here to return to the main ReviseSociology home page!

The US-UK Trade Deal: More Neoliberalism?

Brexit hasn’t been in the news much since Covid-19, but we’re still leaving the European Union in January 2020, which means we haven’t got long to get some trade-deals in place with several different countries.

The United States is one of the UK’s largest trade partners, with around $250 of trade between the countries every year.

We’ve actually been in trade negotiations with the United States since we knew there would be a Brexit in 2017, and we’ve just started up another round of talks, although a deal is apparently unlikely before the US elections in November 2020.

If we look back at the documents from the trade-talks since 2017, it seems that the US is pushing for the following:

  • The privatisation of the NHS and other public sector companies
  • Higher prices for US drugs companies
  • Protections for digital companies such as Facebook and Google
  • The UK has to accept ‘chlorinated chicken’
  • Oh, and they banned climate change from the talks too.

The above is according to some analysis from Global Justice Now and can be found here.

A trade deal with the US: A shift towards neoliberalism?

For an outline of what neoliberalism is see this post.

The trade talks so far have consisted of the US arguing for a pro free-market pro-Corporation agenda – a trade deal that allows large drug and digital companies more freedom to profit from our public services.

The fact that we haven’t caved into their demands yet suggests there is some resistance to the idea of too much neoliberalism, however, now that Brexit and a recession are looming, it will be interesting to see what kind of deal will be struck.

Especially since the NHS are now our heroes, this kind of deal might get some very negative publicity and mass resistance!

Global politics could get very interesting in the next few years!

If you’re and A-level sociology teacher, it might be a good time to switch to teaching the Global Development option!

Outline and explain two reasons why trade does not always promote development (10)

One reason is that poorer countries tend to export low-value primary products such as agricultural goods, while richer countries export higher value goods.

Frank (1971) argues this is a legacy of colonialism during which rich countries made their colonies specialize in exporting one primary product such as sugar or cotton back to the ‘mother land’. After independence, developing societies were over-dependent on exporting these primary commodities, which typically have a very low market-value.

Examples include The Ivory Coast in West Africa – 33% dependent on cocoa beans; Kenya (in East Africa) which is about 30% dependent on two primary products – tea and cut flowers.

This type of trade does not necessarily promote development because the declining value of such commodities means developing nations need to export more and more every year just to stay in the same place. This has been described as ‘running up the downward escalator’.

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A second reason why trade doesn’t work for development is that the global capitalist system depends on inequality

Emanuel Wallerstein argued that the world capitalist system is characterised by an international division of labour consisting of a structured set of relations between three types of capitalist zone:

    • The core, or developed countries control world trade and exploit the rest of the world.
    • The semi-peripheral zone includes countries like China or Brazil – which manufacture produces
  • The peripheral countries at the bottom, mainly in Africa, which provide the raw materials such as cash crops to the core and semi periphery.

Companies in the core countries need to keep prices of end-products as low as possible in order keep up demand, so they pay as little as possible for the raw materials and manufacturing. In short, the development of the west in terms of cheap, consumer goods depends on the poverty of the periphery and relative poverty of semi-periphery.

However, this may not always prevent trade working for development – countries can be upwardly or downwardly mobile in the world system. Many countries, such as the BRIC nations have moved up from being peripheral countries to semi-peripheral countries, and some (e.g. South Korea) can now be regarded as core countries.

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Thirdly, a lack of regulation at both global and national levels means that workers have few protections in developing countries and thus don’t benefit from trade.

Many workers are exploited with low wages in sweat shops, which means workers don’t earn enough money to pay for social development such as education or health; Bangladesh is a good example of a country in which poor health and safety regulations result in high deaths.

Other Corporations such as Shell extracting oil in Nigeria burn gas flares and have leaky oil pipes which destroys the environment and leads to women miscarrying, which actually pushes the development of some areas backwards.

Dependency Theory argues that Nation States compete in a ‘race to the bottom’ to attract Transnational Corporations (and extract materials/ produce goods to trade) through having the least regulations.

Does Aid Work? The Aid Audit

Does Aid Work? The Aid Audit:

Below is a summary of this World Service Podcast from 2015

Intro

‘Fifteen years ago, German journalist, Ulli Schauen helped compile a book of the top 500 global aid programmes… they ranged from schools for Maasai nomads to support for organic farming to training for volunteer sexual health workers.

The question is did they succeed or fail? Ulli travels to Kenya to see how the projects in that country fared. Ulli sets out to find if Aid really does make a difference.’

(These projects were all related to the original Millennium Development Goals and the folllow ups are here – one author’s blog – The Aid Audit: Development Projects Revisited After Fifteen Years

International Aid money has helped all of the projects below….

Kenya
Kenya

Project One – OSIGILI

in 1995 the Laikipiak Maasai formed an organization called OSILIGI (which means ‘Hope’.)

In one of the first projects OSILIGI organized reading and writing courses geared to the nomadic life. In April, August and December, when the nomadic herdsmen are settled, a teacher comes to the village. During these weeks children have concentrated lessons. This made-to-measure education is considerably cheaper than state elementary school. In 4 years, OSILIGI has reached 380 children with this programme, mainly from poor families.

Eco-Tourism - Marginalising the Maasai?
Eco-Tourism – Marginalising the Maasai?

However, the broader issue OSILIGI campaigns for is to establish land rights – to pasture and watering holes, and here they appear to have lost. The Maasai still have no formal rights and their land, and thus way of life, is under threat from agribusinesses and eco-tourism and in the programme we discover that the Maasai live amongst miles and miles of fences – which fence off private farms – one farm being as large as the island of Malta, which houses shipped-in Rhinos for eco-tourism, but this leaves little room for the Maasai.

Osigili seems now to be focussing on the education aspect, but the land rights issue has been taken up by another organisation – IMPACT. It is possible that more progress will be made in this area in the future.

Project Two – A Voucher System for Health Care

In the far West of Kenya the German Government Trained volunteer health advisers – 20 000 community health workers for 10 years. Unfortunately this terminated in 2006 and so no evaluation or final report can be found, the argument here, however, is that a lasting legacy

The German government now funds a voucher programme for the poor where they can use vouchers to receive free or subsidised contraception, maternal health services and HIV treatment.

Through the voucher programme local (privately run) hospitals receive $50 for maternal treatments and $12 for AIDs screenings (from the German Aid fund, they don’t get state funding) – 3/4s of the money goes on medicine and food, but the rest is available to allow for hospital expansion.

To give an example of how it works – one woman is interviewed who is HIV positive, and giving birth in the hospital meant that the infection was not passed on to her two children.

Despite the above, Kenya still failed to reach two of its MDGs -reducing infant mortality and improving maternal health.

But German Government trying to influence Kenyan health policy into the bargain. Germans wand to promote health insurance, Americans want to promote other issues – donors don’t co-ordinate their programmes.

Project Three – The Matinyani Business Cooperative

mat

This is a cooperative of 4000 women, who initially set up a library, primary school and a health centre. They also established a range of small businesses devoted to weaving, water, candlemaking, bakery.

However, all of this stopped working years ago… 75% of the initial money went into other people’s pockets – so they couldn’t pay workers or for materials to keep the projects going.

However, what these women learnt in the early days of this project allowed them to establish their own businesses, many of which are today successful and export to other countries.

Project Four – Environmental Protection on Lake Victoria

darwins-nightmare1

Lake Victoria is heavily overfished and polluted.

This projects aims were to build water treatment plants and limiting the spread of the water hyacinth. There are laws in place about catch size (enforced by the mesh size of nets). However, it seems that everyone is happy about breaking the law and the aid-funded environmental organisation doesn’t seem to be enforcing the rules.

The World Bank Project labelled this one as unsatisfactory.

Project Five – A Foot Pump for Water

An Australian company called Kick Start (originally known as Aprotec ) which focussed on developing just one product – a small, foot operated water pump, claims to have lifted almost one million people out of poverty. Aid has been essential in this. The CEO says that it is not profitable to develop such products for people – it’s high risk, low return, and high cost – so it’s a market failure – thus subsidies in the form of International Aid, with this money going mainly into Research and Development and marketing (radio ads).

The pumps themselves are sold for $130 – and they have sold 250 000, which means about 900 000 will have been lifted out of poverty. We visit a tree nursery to see how this works – where an employee is using the foot pump (like a step machine) to pump water to water the young trees – this has allowed the company to grow a lot more trees and it is now much bigger than it used to be.

Question – Has development aid worked in the above five cases?

The programme finishes off by noting that we see all of the classic problems associated with Aid in the above examples, but it is the positive impacts which stick in his mind, especially the fact that when official projects collapse, the people who have gained skills carry on campaigning in different ways.

Find Out More…. There are another two episodes in the series if you wish to listen further!

How Private Aid Foundations Influence Economic Policy in Developing Countries

It could be used in the Global Development topics on ‘Organisations in Development’ or ‘the role of Private Aid in Development’

A flow chart of what’s below would run something like this…

TNCs (pump their profits into their) – Charitable Foundations (who established) – The Council of Foreign Relations (which influences) – The World Bank (which sets the economic policies of) – Developing Countries

Basically Roy argues that in the early 20th century, three of the largest corporations in the world (one of which was Ford) set up Philanthropic (charitable) organisations – In the middle of the 20th century, after World War Two, these organisations were key to establishing the Council of Foreign Relations, the World Bank, the United Nations and the CIA. Essentially, Roy is arguing that US Corporations run the biggest international organisations in the world, which in turn coerce Developing countries into doing what these Corporations want.

The enthralling history of ‘philanthropic foundations’ began in the United States in the early 20th century. Among the the first was the Rockefeller Foundation, endowed in 1914 by J.D Rockefeller, founder of Standard Oil Company.

Rockefeller was America’s first billionaire and the world’s richest man. He believed his money was given to him by God. Among the institutions financed with Rockefeller’s money are the United Nations, the CIA, and the Council on Foreign Relations.

Philanthropic Foundations are non tax-paying legal entities with massive resources with an almost unlimited brief. They are wholly unaccountable, wholly non transparent, and are basically about translating economic power into social, political and cultural capital.

They emerged in the 1920s because it was then that US Capitalism began to look outward for raw materials and overseas markets. Foundations began to formulate the idea of global corporate governance. In 1924 the Carnegie and Rockefeller Foundations formed the Council on Foreign Relations (the CFR), also funded by the Ford Foundation as well. By 1947 the CIA was working closely with the CFR and over the years the CFR’s membership has included 22 secretaries of state, and all eleven of the World Bank’s presidents have been members of the the CFR. The CFR also contributed a grant of £8.5 million to pay for the land in New York on which the United Nations building now stands.

Given that the World Bank has more or less directed the economic policies of the Third World, coercing them to open up their markets in return for loans and aid, and given that the World Bank is steered by the Council of Foreign Relations, which in turn is steered by Transnational Corporations, it seems to follow that it’s TNCs which really have really determined the foreign policies of third world countries over the past few decades.

By the 1950s the Rockefeller and Ford Foundations were funding international educational institutions began to work as quasi-extensions of the US government, which was at the time toppling democratically elected governments in Latin America, Iran and Indonesia.

The Ford Foundation established a US style economics course in Indonesia at the Indonesian University. Elite Indonesian students, trained in counterinsurgency by US army officers, played a crucial part in the 1965 CIA backed coup in Indonesia which bought General Suharto to power. He repaid his mentors by slaughtering hundreds of thousands of communist rebels.

Twenty years later, young Chilean students who came to be known as the Chicago Boys were taken to the US to be trained in neoliberal economics by Milton Friedman and the University of Chicago (endowed by J.D Rockefeller), in preparation for the 1973 CIA backed coup that killed Salvador Allende and brought General Pinochet and a reign of death squads, disappearances and terror that lasted for seventeen years. Allende’s crime was being a democratically elected socialist and nationalising Chile’s mines.

Like all good Imperialists, the Philanthropoids set themselves the task of creating and training an international cadre that believed that Capitalism and by extension the hegemony of the United States was in their own interests.

Corporate foundations also provide scholarships at universities for courses in development studies – and many of these are for people from the middle classes in the developing world – these are the future finance ministers, corporate lawyers and bankers of the developing world. Of course the courses funded are the ones which sing the virtues of neoliberal economic policy, rather than the ones which are critical of neoliberalism.

According to Roy, not only do Philanthropic Foundations control the agendas of International Economic Organisations, governments and education systems, they also control the media and social movements which emerge to protest neoliberal policies – she gives a few examples of how, but probably the best piece of supporting evidence for this point of view is that we don’t question the role of philanthropic foundations in society. When Corporate funded philanthropic foundations first appeared in the United States, there were debates about their accountability, and people suggested that if they had so much money they should maybe raise the wages of their workers instead, nowadays we just don’t question them.

In summary, Roy argues that Philanthropic Foundations are simply a way of using a minuscule percentage of profits to run the world.

A Question to Consider….

The largest philanthropic foundation on earth today is the Bill and Melinda Gates Foundation. Roy points out that it’s odd that Bill Gates*, who admittedly knows a thing or two about computers, is now designing education, health, and agriculture policies, not just for US governments but for governments all over the world.

The question that Roy makes us ask is this – Is Bill Gates really trying to help people through his organisation, or is the Bill and Melinda Gates Foundation really a just a way for Gates to translate his economic capital into global political power, and to make sure that government policies the world over benefit Microsoft?

*Or to refer to him by his full name – ‘The Man Child Bill Gates’.

Sources 

The above post is summarised from Arundhati Roy’s ‘Capitalism: A Ghost Story’ (2014).

More Arguments for Official Development Aid

The following two thinkers argue that aid can work, but it needs to be better targeted in order to be effective. This is really a return to ‘neo-modernisation theory’.

Paul Collier (2008)

Collier’s analysis of aid suggests that aid is merely a ‘holding operation preventing things from falling apart’. However, he does argue that without aid, the countries of the bottom billion would have become even poorer than they are today.

However, Collier’s evidence also indicates that the more aid is increased, the less is the return on economic growth. Collier argues that aid is often rendered ineffective by two obstacles, or traps in some recipient countries:

  • The conflict trap – too many countries receiving foreign aid are engaged in expensive civil wars or military conflicts with their neighbours.
  • The bad governance trap – Collier highlights the problem of kleptocracies – the corrupt elites which run many developing societies. The commission for Africa estimated that the amount of money stolen by corrupt elites and held in foreign bank accounts is equivalent to more than half of Africa’s debts.

Collier argues that these traps prevent aid from being spent effectively – because a significant proportion of aid money gets siphoned off into funding the military or simply into the pockets of rich elites.

Peter Riddell (2007)

Riddell (2007) argues that rich countries need to shoulder the blame for the failure of aid because:

  1. They often fail to distribute it to the countries that need it. For example, less than half of all aid is channelled to the poorest countries.
  1. There are too many donors and projects, which fail to co-operate with each other and undermines the effectiveness of aid.
  1. Aid agencies often fail to promote a sense of ownership of development projects among local people, and so the projects fail because the locals don’t support them.

Sources

Chapman et al (2016) – A Level Sociology Student Book Two [Fourth Edition] Collins.

Sources

Should Foreign Aid be Abandoned or Adapted? Huffington Post Article

 

 

 

Criticisms of Official Development Aid

Official Development Aid is aid from governments, which can take the form of either bilateral aid – direct from donor country to recipient country, or multilateral aid, which is channelled through institutions such as the World Bank.

The value of Official Development Aid is much greater than aid channelled through non-governmental organisations such as Oxfam, and so has the potential to have a much greater impact.

You might like to read this post first: arguments and evidence for official development aid before reading the eight criticisms below!

Aid hasn’t generated economic growth in many recipient countries

The most vociferous recent critiques of Official Development Aid comes in the form of Dambisa Moyo’s recent book (2009) Dead Aid: Why Aid is not Working And How there is another way for Africa. At root, her most basic criticism  is that Official Development Aid hasn’t actually generated significant economic growth in recipient countries. According to Moyo

‘Over the past thirty years, the most aid-dependent countries have exhibited growth rates of minus 0.2% per annum.  Looked at as a whole, Africa has had over $1 trillion dollars of aid money pumped into it over the last 60 years and not much good to show for it.’

Aid stifles the development of small businesses.

Moyo explains how this works as below…..

‘There’s a mosquito net maker in Africa. He manufactures around 500 nets a week. He employs 10 people, who each have to support upwards of 15 relatives. However hard they work, they cannot make enough nets to combat the malaria-carrying mosquito.

Enter vociferous Hollywood movie star who rallies the masses, and goads Western governments to collect and send 100, 000 mosquito nets to the affected region, at a cost of $1 million, The nets arrive, the nets are distributed and a good deed is done.

With the market flooded with foreign nets, however, our mosquito net maker is promptly out of business. His ten workers can no longer support their dependents.

Now think of what happens 5 years down the line when the mosquito nets are torn and beyond repair, we have now mosquito nets, and no local industry to build any more. The long term effect of the ‘aid injection’ has been to decimate the local economy and make the local population dependent on foreign aid from abroad.

Aid Encourages Corruption

In 2004 the British envoy to Kenya, Sir Edward Clay, complained about rampant corruption in the country, commenting that Kenya’s corrupt ministers were ‘eating like gluttons’ and vomiting on the shoes of foreign donors. In February 2005 (prodded to make a public apology), he apologised, saying he was sorry for the ‘moderation’ of his language, for underestimating the scale of the looting and for failing to speak out earlier

According to Dambisa Moyo – If the world has one image of African statesmen, it is one of rank corruption on a stupendous scale. One of the best examples of this is Mobutu, who is estimated to have looted Zaire to the tune of $5 billion. He is also famous for leasing Concorde to fly his daughter to her wedding in the Ivory Coast shortly after negotiating a lucrative aid deal with Ronald Regan in the 1980s.

Moyo further argues that at least 25% of World Bank Aid is misused. One of the worst examples is in Uganda in the 1990s – where it is estimated that only 20% of government spending on education actually made it to local primary schools.

Moyo argues that growth cannot occur in an environment where corruption is rife. There are any number of ways in which corruption can retard growth.

  • Corruption leads to worse development projects – corrupt government officials award contracts to those who collude in corruption rather than the best people for the job. This results in lower-quality infrastructure projects.
  • Foreign companies will not invest in countries where corrupt officials might siphon off investment money for themselves rather than actually investing that money in the country’s future.
  • Aid is corrosive in that it encourages exceptionally talented people to become unprincipled – putting their efforts into attracting and siphoning off aid rather than focussing on being good politicians or entrepreneurs.

Too much aid money is spent on salaries, admin fees and conferences

Not only are these often secretive and not open to account, but this also means reduced money spent on actual development. The aid industry employs hundreds of thousands of people worldwide. For example, in the UK DEFA spent £248 million on administration in 2007/08. This has led to some referring to aid agencies as the lords of poverty – ironically, it is actually in the interests of these bureacractic agencies for poverty to exist, or thousands of people would be out of work.

Dependency theory argues there is a political agenda to aid

The allocation of US and UK aid has often depended on whether the political ideology of the developing country has met with Western Approval. Dependency theorists argue that the main point of aid is to make the recipients dependent on the donors. Many neo-marixsts argue that along with aid packages comes western values, advice, culture, and aid merely ensures that the interests of west are maintained.

  • During the cold war developing countries were rewarded with aid if they aligned themselves with the Capitalist west and against the Socialist regimes of Eastern Europe and China. Both the UK and U.S. governments refused aid to the Ethiopian government in the early 80s on the grounds that the government was Socialist.
  • A similar focus is also found in US military aid. Much military aid was sent to South America where it was used by right wing governments to repress socialist movements that were opposed to the interests of US multinationals.
  • Even with the fall of the cold war, countries are still rewarded for promoting western interests. Kenya was rewarded in 1991 for providing the US with port facilities during the gulf war while Turkey was denied US aid for not allowing them to lease its air bases.
  • In 2005 developing nations were rewarded for assisting the Bush regime’s war on terror.

NB Tied aid is now illegal in the UK by virtue of the International Development Act, which came into force on 17 June 2002. Other countries, however, still only provide aid on the basis that a proportion of the aid money is spent on products produced by the donor country.

The World Bank aid has traditionally required countries to undertake ‘Structural Readjustment Policies’ (SAPs)

The World Bank and International Monetary Fund (IMF) are the largest and most influential of the International Financial Institutions (IFIs), and these have pursued a neoliberal development agenda since the 1980s. The damaging strings that the World Bank & IMF attach to aid, loans and debt relief often make it more difficult for poor countries to effectively tackle poverty. These strings often force poor countries to undertake Structural Adjustment Programmes – cut vital spending on health and education, or to privatise their public services, which provide opportunities for international companies to take these services over. Tanzania, Guyana and Bolivia have all been told that they must privatize their water supplies in order to get millions of pounds in aid from the world bank[1] [2]

Top down aid is often irrelevant to the countries receiving it!

Much Official Development aid has focused on monstrous projects such as the building of dams and roads which have sapped local initiative harmed the environment and lead to social injustices[3].

Focusing on aid for developing countries suggests that recipients are helpless.

Live Sid Yasmin Aibhai- Brown argues that concerts such as Live Aid perpetuate the idea of Africa as a helpless continent incapable of helping itself, whereas the opposite is actually true. [4]

[1] http://www.actionaid.org.uk/index.asp?page_id=1365 – extract about water privatization in Tanzania from Action Aid.

[2] See Chapter on Bolivia water privatisation, The Corporation DVD

[3]  See http://www.whirledbank.org/environment/dams.html for a critical look at the World Bank’s funding of dams in half a dozen developing countries.

[4] http://www.opendemocracy.net/globalization-G8/aid_2650.jsp – a critique of events such as Live Aid.

Arguments for Official Development Aid

Early modernisation theorists believed that it was essential to inject aid into countries to establish infrastructure and change attitudes. From the 1950s to 70s aid programs seemed to have a positive effect on many developing countries as both economic and social development increased, however this progress seamed to stall from the late 1970s.

Contemporary supporters of aid believe that aid is not necessarily a bad thing, but aid needs to be targeted, its effects monitored and accountability measures need to be in place, so that aid money doesn’t go astray, like the $10 billion lent to Indonesia during General Suharto’s rule between 1965-1995.

NB Official Development Aid is only one type of aid, for an overview of all types of development aid, please see this post: different types of development aid.

The advantages of Official Development Aid

In the ‘End of Poverty’ (2005) Sachs notes that large scale aid can work when it is practical, targeted, science based and measurable. He believes in aid as ‘one big push’ to sort out specific problems. He points to the following evidence  to support his view that aid works:

  • Firstly, aid aimed at improving health has been particularly successful. Aid money has led to mass immunisation of children against diseases such as smallpox and measles, polio, diphtheria. Smallpox was practically wiped out with $100 million of very targeted aid aimed at vaccinating those most at risk. Today, Barder (2011) points out that every year foreign aid pays for 80% of immunisations and saves 3 million lives a year.
malaria-graphic-008
Malaria Statistics

The recent sharp decline in Malaria deaths is largely due to targeted immunisation, paid for by international aid, a cause championed by the Bill and Melinda Gates foundation 

  • Secondly – The Green Revolution – In the 1960s, Western Aid assisted in the green revolution in China, India and South East Asia which saw rice yields increase by 2-3 times, leading to surplus rice being produced for export. Such countries were then able to use the income generated by these cash crops to diversify and grow their economies, transforming into Newly Industrialised Countries (The Asian Tiger Economies). The video below outlines the case for the Green Revolution.

(NB – as a counter criticism you should check out ‘The Mythology of the Green Revolution, featuring Vandana Shiva – basically a ‘post-development perspective on the green revolution.)

  • Thirdly, Numerous countries, known as the International Development Association (IDA) graduates have gone on to ‘drive to maturity’ following large injections of aid money. Riddel (2014) argues that there is a substantial body of evidence that South Korea, Botswana and Indonesia have all benefited economically from Official Development Assistance.
indonesia-underdevelopment
Indonesia – seems to have benefited economically from a large amount of Official Development Aid over the years

Aid can support the Interests of Developed Countries (*)

According to Marren (2015), there is plenty of evidence that aid is shaped by the self-interest of the donor countries:

  1. Aid may be used as a ‘sweetener’ to gain access to resources and markets and foster better trade links. The USA has used aid to guarantee access to scarce resources such as oil, while the increased donor activity of China in recent years may be linked to its need for raw materials. This goes some way to explaining why more aid money goes to lower-middle income countries rather than low-income countries – put simply, donor countries stand to gain more from giving aid the slightly better off rather than the very poorest.
  2. Aid may be a way stimulating the donor economy. Some countries attach conditions to aid stipulating that a proportion of the funds must be spent on goods manufactured in the donor country. This is known as ‘tied aid’. The UK banned this kind of aid in 2001, although research conducted by The Guardian newspaper found that only 9 out of a total of 117 major DFID contracts (worth nearly £750 million) had gone to non-British companies.
  3. Aid may be a way of strengthening political links and securing strategic interests. Countries which are viewed by the Americans as allies in the ‘War against Terror’ are generously rewarded with aid. A recent study of U.S. Aid since the 2000s showed that the main destinations were Afghanistan, Iraq and Egypt. Similarly, UK aid is increasingly being spent on military objectives.

Statistics on the Benefits of UK Aid (*)

The majority of UK aid spent between 2015-2019 was spent in Africa, and you can get a detailed breakdown of expenditure by sector and region in the most recent DFID report linked below (NB DFID has now merged with the FCO, so whether future reporting will be the same remains to be seen!)

Combatting malnutrition – From 2015-2020 DFID reached 55.1 million children under 5, women of childbearing age and adolescent girls through our nutrition-relevant programmes.

Water, sanitation and hygiene – Between 2015 and 2020 DFID has supported 62.6 million people to gain access to clean water and/or better sanitation.

Education – Between 2015 and 2020 DFID supported at least 15.6 million children to gain a decent education.

Jobs and Income – From 2015/16 to 2019/20 DFID supported 5million people to raise their incomes or maintain/gain a better job or livelihood.

Family Planning – Between April 2015 and March 2020, DFID reached an average of 25.3 million total women and girls with modern methods of family planning per year

Health – Immunisations – From the start of 2015 until the end of 2018, DFID support immunised an estimated 74.3 million children, saving 1.4 million lives.

Access to Finance – Between 2015 and 2019 DFID supported 69.2 million people to gain access to finance, including 35.4 million women, representing 51% of the total

Energy – From 2015/16 to 2019/20 DFID installed 771 KW hours of clean energy capacity.

Related posts

Of course there is a question mark over how effective the aid spent in the above statistics has been, which is one of the many criticisms made of Official Development Aid, which you can read about in this post here.

Sources

DFID results estimates 2015 to 2020

Chapman et al (2016) – A Level Sociology Student Book Two [Fourth Edition] Collins.

For more posts on Global Development, please see my page of links on globalisation and global development.