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'Real Aid'...

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  • kristen cheney
    This article speaks to the issues we ve been discussing, too... KC AFRICA: Real Aid needed to eradicate crippling poverty,NGOs [This report does not
    Message 1 of 1 , Jul 6, 2005
      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
      on Tuesday.

      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
      real aid.

      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
      poor countries.

      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
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