This article speaks to the issues we've been discussing, too...
AFRICA: 'Real Aid' needed to eradicate crippling poverty,NGOs
[This report does not necessarily reflect the views of the United Nations]
JOHANNESBURG, 6 July (IRIN) - As Africans once again pin their hopes
on the magnanimity of Western leaders to ease deepening poverty,
questions remain over how international assistance can effectively be
used to bring an end to chronic underdevelopment across the continent.
The Group of Eight (G8) leading industrialised countries meet in
Scotland this week under enormous pressure from global antipoverty
activists, who say now is the time for a concerted effort to help
millions of Africans escape poverty permanently.
Local and international NGOs have congregated in support of three main
issues: the total scrapping of multilateral debt; a major increase in
the quantity and quality of aid; and dismantling the complex system of
subsidies and barriers that give Western countries a head start on
Africa's farmers and businesses.
Although a bold move by G8 finance ministers earlier this year saw US
$49 billion of debt cancelled, figures show that low-income countries
are still burdened by more than $523 billion owed to multilateral
African governments have long complained that debt-servicing
obligations were strangling economic and social development, in some
cases swallowing half the national budget.
The Jubilee Debt Campaign, an NGO based in Britain, noted that in 2002
more money was spent on debt servicing than health or education in
many countries, including Cameroon, Ethiopia, Guinea, Malawi, Senegal,
Uganda and Zambia.
The NGO says debt relief has proven to be effective: in Tanzania,
cancellation enabled the government to abolish primary school fees,
leading to a 66 percent increase in attendance; after Mozambique was
granted a reprieve, it was able to offer all children free
immunisation against childhood diseases.
Oxfam has joined African finance ministers in insisting that debt
forgiveness be accompanied by increased official development
assistance (ODA) instead of prescriptive economic policy conditions.
South Africa's finance minister, Trevor Manuel, has noted that
bilateral debt forgiveness and emergency aid have increased, but other
ODA to Africa declined between 1993 and 2003. This happens when donors
merely "move the deckchairs around" and bilateral debt cancellation is
scored against ODA "when, in fact, if we want to do the many things we
must do, we need additional resources".
Oxfam has called on the world's richest nations to agree on an extra
$50 billion a year in aid to poor countries - with half of it going to
Africa - effective immediately. The group says delaying this aid
increase until 2010, a move currently on the cards, would leave a $100
billion hole in aid budgets, consigning 500 million more people to
Furthermore, rich countries must meet the United Nations target of
spending 0.7 percent of their national income on aid by 2010 at the
"Rich countries have never been richer, yet they have never given
less; they give half as much in aid as they did in 1960. Increasing
their aid to the levels needed - as they promised to do in 1970 -
would cost them the equivalent of a cup of coffee a week for each of
their citizens. The price of not doing it will be measured in millions
of lives," Oxfam's head of advocacy, Jo Leadbeater, said in statement
In 1970 the leading nations agreed that 0.7 percent of the GDP of
their states would be devoted to aid. This undertaking was reaffirmed
at the 1992 United Nations Conference on Environment and Development
in Rio de Janeiro, and again at the UN International Conference on
Financing for Development at Monterrey in 2002.
To date only five countries have managed to reach that target:
Denmark, Luxembourg, the Netherlands, Norway and Sweden. Six others
have pledged to do so by 2015: Belgium, Britain, Finland, France,
Ireland and Spain.
Although it is widely acknowledged that more aid is a critical tool in
the struggle against endemic poverty, it is not seen as a magic
bullet. Concerns remain that without proper monitoring mechanisms
increased aid delivery could see a proliferation of corruption.
Action Aid, an international development agency, says aid must be part
of a broader development strategy if it is to make a lasting
difference in people's lives.
In a recent report, 'Real Aid: An Agenda for Making Aid Work', the
agency claims that two-thirds of donor money is 'phantom' aid, and not
genuinely available for poverty reduction in developing countries.
"Failure to target aid at the poorest countries, runaway spending on
overpriced technical assistance from international consultants, tying
aid to purchases from donor country's own firms ... excessive
administrative costs, late and partial disbursements, and aid spending
on immigration services all deflate the value of aid," the report
In 2003 real aid totalled just $27 billion, or only 0.1 percent of the
donor countries' combined national income. On average, the world's
seven largest economies give a slim 0.07 percent of national income in
Action Aid admits that the problems causing the gulf between official
and real aid are not new, and although donors have signed numerous
international agreements, little headway has been made in bridging it.
"At the heart of this failure there lies a lack of accountability on
the part of donors for either the amount of aid they commit, or the
quality of that aid," the report observed.
A new 'International Aid Agreement' should include "mutual commitments
in place of one-sided conditionality, that are monitored transparently
at the country level", as well as "national and international forums
where donors and recipients can review progress on an equal footing,
overseen by a UN Commissioner on Aid", the agency suggested.
There appears to be broad consensus that more aid is essential if
Africa is to get ahead, but a series of arguments put forward by the
International Monetary Fund contends that there is no strong evidence
that aid boosts economic growth and, hence, no reason to suppose that
aid reduces poverty either.
Co-authored by IMF chief economist Raghuram Rajan and a colleague,
Arvind Subramanian, two papers on aid maintain that while projects may
do good, they have unseen side effects that eventually hurt those they
are intended to help.
The authors point out that aid flows inadvertently push up a country's
exchange rate, damaging exporters; aid projects that hire local
workers are bidding up skilled wages, again damaging the export firms
that hire from the same labour pool.
Rajan and Subramanian emphasised that a failed aid project was not
merely neutral in relation to poverty reduction but exacerbated the
problem; they recommended that donors be a lot more discerning
regarding the kind of aid they delivered.
An overriding concern was that industrialised countries had done very
little to tackle domestic trade polices that had spillover effects on
But getting wealthy nations to dismantle what NGOs have labelled a
"rigged and unjust" approach to doing business may be a tall order:
European and American farmers are the recipients of hefty agricultural
subsidies that affect Africans directly. Although G8 countries have
said they were committed to eliminating these trade-distorting
subsidies, the pace of putting fairer practices in place has been
International NGOs advocating for trade justice have pointed out that
small-scale African growers cannot compete with cheaper goods overseas
or even at home, where below-cost products are dumped by rich nations,
driving down prices to such an extent that African farmers are
sometimes unable to sell in their own countries.
In Ghana, a flood of subsidised American rice is crippling local
producers. The EU does allow some Least Developed Countries such as
Mozambique to export sugar to Europe without incurring the tariffs,
but the quantities are severely limited.
Malian farmers have been forced to swallow a bitter pill as the US
continues to artificially lower their cotton prices so much that
American cotton is cheaper in African countries than homegrown cotton,
even with transportation costs.
"Now is not the time for a transatlantic tit-for-tat over farm
subsidies - G8 leaders must use Gleneagles [where they are meeting in
Scotland] to set out a bold agenda in the run-up to the all-important
meeting of the World Trade Organisation in Hong Kong in December,"
Oxfam's Leadbeater said. "With so many of the key players in world
trade around the table in Gleneagles, it would be unforgivable if they
didn't make concrete progress towards trade justice here."
"So we starve all the teachers
and recruit more marines.
How come we don't even know what that means?
It's obvious!" --Joe Jackson, The Obvious Song