The use and abuse of “Aid”
Official Development Assistance (ODA) was first introduced in 1940s by the ILO as an idea to help improve living standards in poor countries. It took on various forms, but the most prominent ones are through multilateral agencies such as the World Bank and IMF or in form of bilateral assistance, from one government to another (Riddell, 2009). ODA thus originated in the idea of helping the poor and struggling third world population achieve growth and development and has evolved into a billion dollar industry which has blown out of proportions (total ODA in 2008 almost $ 120 billion) (UN factsheet 2009).
Yet, if we look at the statistics and numbers of international reports such as DFID, UNDP and others the poor and helpless seem to be worse off than before, and not much has improved. There are indeed several successes which various development agencies advertise on, but the reality remains that a big proportion of the world’s population is still living under the poverty line and is denied access to basic needs. The main dilemma is thus: Do we need to spend more on foreign development assistance or is ODA actually ineffective?
On the one hand, ODA has become an important part of how the world nowadays works. An entire industry is built around it which is functioning like a well-oiled machine, but perhaps this is the problem. Perhaps the problem lies within this idea of a machine. As Hancock points out, ODA has turned into a system of financial transactions, a system of flows from one country to another. Indeed, the financial flows go both ways, with the IMF and banks receiving large payments in form of debt-service in return (1989, p.188-189). Moyo picks up where he left off pointing out, that in many cases development assistance is tied to conditionalites, such as certain regulations and targets which need to be met. Therefore, while countries are focused on either repaying loans or meeting targets, the actual idea of aid as help is lost within a system of transactions (2010, p.38).
Furthermore, aid is problematic in three ways: on the one hand it creates an aid-dependence, because the recipient countries have come to depend on the annual inflow of financial assistance, thus losing their self-sufficiency in production and neglecting to invest in their industry( Hancock, 1989, p. 189-191). Secondly, the way aid has been given to 3rd world countries is questionable, what Moyo comes to refer to as the “micro-macro paradox” (Moyo, 2010, p. 44-45). ODA nowadays is centered around short-terms success, neglecting its long-term impacts on a country’s economy. Often aid is used to buy foreign products, instead of investing in the local economy, thus putting local sellers out of business and undermining any long-term sustainable development (p.45).
And at last, the discourse around aid should be taken into account as well, since it seems to be the underlying factor for this aid industry’s failures. In order to prove the aid industry’s legitimacy, the development industry has focused on stereotypical imagery, whether it is the “fly-infested emaciated black child” or “ the “very poor marginalized woman” (Win, 2004, p. 61). No matter which images are used, they tend to portray the 3rd world and in particular Africa, as a helpless “country” –not continent- in desperate need of aid (Wainana, 2005). This patronizing portrayal strips the developing world of its chance to attempt self-sufficiency while at the same time it pushes its population into a reliance on aid, thus perpetuating the circle of unsuccessful development assistance.
Hancock, Graham (1989) Lords of Poverty: The Power, Prestige and Corruption of the International Aid Business, New York: The Atlantic Monthly Press.
Moyo, Dambisa (2010) Dead Aid: Why Aid is Not Working and How There is Another Way for Africa: Chapter 3. London: Penguin Books.
Riddell, Roger (2009) ‘Is aid working – is this the right question to be asking?’:http://www.opendemocracy.net/roger-c-riddell/is-aid-working-is-this-right-question-to-be-asking
UN Factsheet (2009) ‘End Poverty 2015 Millenium Development Goals’, UN Department of Public Information, Available at:http://www.un.org/en/development/desa/policy/mdg_gap/index.shtml
Wainaina, Binyavanga (2005) ‘How to Write About Africa’, Granta92. http://www.granta.com/Archive/92/How-to-Write-about-Africa/Page-1
Win, Everjoice (2004) ‘Not very poor, powerless or pregnant: The African woman forgotten by development’, IDS Bulletin Vol 35(4): 61-64.