When I first read Paul Collier‘s ‘The Bottom Billion: Why Poor countries are failing and what can be done about it“, I could not stop myself from clenching and unclenching my fists several times because of the vividness with which he captured certain situations I had witnessed and experienced. I could not wait to reach the portion of the book in which he discussed the second half of his subtitle “…What Can Be Done About it” Collier does a good in presenting some very simple and arguably inexpensive solutions:
- Aid agencies should increasingly be concentrated in the most difficult environments and accept more risk.
- Appropriate Military Interventions should be encouraged, especially to guarantee democratic governments against coups.
- International Charters are needed to encourage good governance and provide prototypes.
- Trade Policy needs to encourage free trade and give preferential access to Bottom Billion exports
I applauded to this and really found it difficult to think that there was a solution that could stray far from what he was proposing. My conviction was strengthened when I read “Is Aid Oil? An analysis of whether Africa can absorb more aid.” (Do not mind the fact that I was anachronistic in my reading, I just happened to have seen the Bottom Billion first)The conclusion he arrives at is that
“Even though aid is not like oil, the scope for substantial expansion may nevertheless be limited by diminishing returns. The available evidence suggests that if aid is simply scaled-up proportionately, the incremental aid might indeed be much less effective, dollar-for-dollar, than existing aid.”
Fair enough, the argument in the Bottom Billion had support from an earlier document though it presented Aid as ‘Part of the Solution’ I thought I had found my ‘Holy Grail’. Could my quest for a solution to the African/Third world problems be over so soon? So I may have thought, until I had time to go through Heather‘s lectures and later participated in the seminar discussions. One of my Masters (the most sceptical of them all) had made it clear to me that
“When we run over libraries, persuaded of these principles, what havoc must we make? If we take in our hand any volume; of divinity or school metaphysics, for instance; let us ask, Does it contain any abstract reasoning concerning quantity or number? No. Does it contain any experimental reasoning concerning matter of fact and existence? No. Commit it then to the flames: for it can contain nothing but sophistry and illusion.”
Don’t get me wrong! Collier’s work is not a volume on divinity or school metaphysics (it is a very practical Economics textbook ‘that can be read even on the beach’ and one that I will love to read over and over) unfortunately it contains a lot sophistry and illusion. I am however not advocating like Hume that it be burnt because in that case, most of the volumes in the Social Sciences in recent years will be cast in to flames. (even Hume’s work will not have lived to tell its story) What I am simply trying to point out is that I accepted rationale of the book without subjecting it to critical judgement.
This week’s session did a lot to wake me up from my ‘dogmatic slumber’. I wonder why I kept looking at things in isolation. Aid in isolation is wonderful; Politics – especially international politics – in isolation is a den of wolves where only the fittest survive – Development in isolation… can development be isolated? I don’t know! It seems to be a thing of the future. But when we put the three together and what do we get? Aid that has to pass through some political machinations to bring about development. I was therefore both thrilled and amazed when I looked at the propositions that Heather wanted to be discussed during the seminar session:
1. Aid has a negative impact on politics in developing countries.
2. Aid has a positive impact on politics in developing countries.
3. Aid has no impact on politics in developing countries.
I was thrilled because I noticed that the propositions stood a chance of getting wide support and this meant a good avenue for exciting debate. I was however amazed because Hearther added that “You *must* come to a consensus on this, and so this will involve some friendly debating. You will also be expected to back up your position with examples.” Wow!!! A consensus on such extreme propositions… that was where the difficulty was surely to come… and it did come.
First of all, there was need to distinguish between Official and Non Official Sources of Aid, there was further need to distinguish between Grants and loans, Humanitarian and food Aid, Tied and Untied Aid, Project and Programme Aid, Basket Funds, Budget support, just to name a few. In attempting to do so it became clear that one could not dispute the fact that different types of Aid had different effects and varies from place to place.
The only area we could arrive at a consensus – or let me say where I could agree with the group – was the fact that Humanitarian Aid and other Relief Aid Agencies like the Red Cross, Islamic Relief and Christian Aid were doing a wonderful job and had a positive impact on the politics of developing countries albeit usually unintentionally, and should get all the support they need to continue. Unfortunately we could not have a synoptic view of other forms of official aid. The main reason I differed with others or anyone who thinks aid has any positive impact on the politics of developing nations is the fact that there is nothing positive to show for it. Let us leave all rhetorics aside and look directly at all the countries that have been receiving aid since their creation… there is none that I know that has really achieved better political structures because of aid… if anything I know of so many who have become more corrupt because of the availability of disposable income made possible by aid.
But Why Aid?
Why should rich countries be so concerned about giving aid to poor countries. Why not “teach the people how to fish rather than giving them fish”, why is it that China is one of the highest recipients of aid is also offering aid to Cameroon, or why should one bother to give aid to a country like Cameroon whose president can afford a holiday in which he spends over £25,000 a day for three weeks (or whose national football team can afford to stay in the 2nd most expensive hotel during the South African World cup tournament – beaten in class and only by Japan). What is the rationale behind giving aid to countries even when it is common knowledge that the money will find its way to a Swiss bank with the first available transaction? What in God’s name is the reason that aid is given with conditionalities that will have rippling effects for future generations who will not even be able to account for the aid? If Brundtland’s definition that “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” is anything to go by, then I will be bold to say here that aid is not sustainable, especially aid that has anything to do with the politics of third world nations.
But… is there any room for optimism… yes I think so but from two different unrelated perspectives: first is the fact that most of the taxpayers in the rich nations are beginning to question the usefulness of aid. For example some British people have recently been questioning the rationale behind aid when is was not bringing any positive reports. The report I read from a daily said that Britain will stop giving aid to China and Russia and will freeze its level of aid to India at 280 million a year for four years. The article called for a stop to all foreign aid since “… aid has been propping up dictators for years, with the cash ending up in Swish bank accounts, not in the stomach of those who need it most… it is time we stop sending bribes to these rich despots…”
The second reason for my optimism is fueled by Collier in a talk in which he states that Aid can only be a solution to the poverty of poor nations if it follows a recipe which is a combination of two forces that changed the world for good, – the alliance of compassion and enlightened self-interest. Compassion is necessary because a billion people are living in societies that have not offered credible hope and Enlightened self-interest, because the continuation of such economic divergence for another 40 years combined with social integration globally, will be a nightmare for the children of the rich nations. Hence he feels that “We need compassion to get ourselves started, and enlightened self-interest to get ourselves serious. That’s the alliance that changes the world.”
Before I begin to get upbeat, it will be good for me to pause a little and wait for next week’s lecture in which a case study of Zimbabwe will put most of these arguments into perspective.