3.5.8.1 Economic Aid

Aid to developing countries is channelled through governments, civil society, the World Bank and the UN.  There is a widespread feeling that it is often wasted, and that it fosters a dependency culture, but some aid is undoubtedly helpful:

  • It can save lives in a crisis, such as a famine or a natural disaster.
  • It can help to provide countries with clean water, medical help, schools and the education of teachers.
  • It can provide some of the infrastructure necessary to transport food to where it is needed, and to industrialise, as described in the next sub-section (3.5.8.2).
  • Farmers can be provided with new seeds, and the accompanying education programmes, to help countries to increase their food production (3.5.8.4).

There are problems in how to give aid in such a way that the benefits go to the recipients:

  • There can be logistics problems. The Guardian article, Somalia famine: The problems of delivering aid, describes how it can take “three to six months” to “process donations, procure food and transport, and deliver it to the co-operating partners on the ground who will distribute it”.
  • One of the arguments against assisting poorer countries is that it would be a waste of money because of corruption.
  • It has even been used to buy weapons – as described in the BBC article, On the trail of Ethiopia aid and guns.
  • Competition between charities is wasteful: increasing their marketing costs and causing confusion and duplication in aid delivery. In an article Following the aid money with Linda Polman, it was suggested that:

“An estimated 37,000 international non-governmental organisations follow the flow of aid money and compete with each other for billions of dollars…”

“…there is growing evidence that aid projects can undermine reconstruction.  The funding imbalance between government programmes and aid projects, together with distorting wage policies, are damaging the functioning of the state and market in Afghanistan.”

  • It is cynical to regularly supply aid in the form of food, which benefits the farmers in the donor country whilst destroying the market for farmers in the recipient country.

These points, which are acknowledged by some of those involved, do not mean that all aid is a waste of money.   It is a question of managing it well:

  • It is possible to ensure that goods and services are delivered directly to the people who need it, rather than giving money to their governments.
  • Infrastructure projects, such as the provision of clean water or better roads, can be supported by ensuring that payment is given directly to the contractor who carries out the work.
  • Seeds and technical help can be provided directly to farmers.
  • The governance of aid can be improved: partly by rich countries refusing to take bribes but mainly by reform within the recipient countries, as discussed later (6.7.6).
  • When encouraging people to have fewer children, education is needed along with the contraceptives to overcome the problems described in the Guardian article, Population growth in Africa: grasping the scale of the challenge:

“Beyond unreliable supplies of contraceptives in many countries the greater obstacles to lower fertility are often male opposition to contraception, religious teachings, social norms, or misinformation about contraceptive options and their side-effects.”

Aid can be used both to respond to crises and to help launch economic growth.  Its funding is currently unreliable though – it is subject to economic and political circumstances in donor countries.   The amount of aid required was broadly agreed to be 0.7% of GDP, in the UN Millennium Development Goals (MDG), but the final MDG Gap Task Force Report 2015 showed that only 5 countries had met that target.  As noted in the previous section (3.5.7) new Sustainable Development Goals have now been agreed.

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This is a current page, from the Patterns of Power Edition 3a book, © PatternsofPower.org, 2020.  An archived copy of it is held at https://www.patternsofpower.org/edition03/3581.htm