The aid business is broken beyond repair? by Izabele Bellini

Through the last century, the aid business has assumed different forms and different results. Today, when it is claimed that the aid business is broken beyond repair, the premise that aid does not work should be carefully analysed. Although many examples suggest failure, there are also many cases worldwide demonstrating the contrary:  international aid really works.

The emergence of international aid is not recent. Harris (et al 2009: 12) argues that justifications for the emergence of large foreign aid programmes were shaped by the successful Marshall Plan transfer of American capital to Western Europe after World War Two. During Bretton Woods meetings in 1944, three institutions were created to promote a new world economic order committed to development. During the Cold War, the world was divided in two spheres of influence, when the United States represented the capitalist system and the Soviet Union led the socialist way. At the same time, many countries around the world were undergoing the process of becoming independent especially in Africa and Asia. These countries were lacking the means to form independent governments and to create programs for development. Also during the Cold War, countries were labelled as First, Second and Third World due to their positions in the global order.

The rich countries of the First World have always been highly influential. They could claim to have successfully undergone an experience of ‘development’ to which the rest of the world aspire (Harris et al, 11). In this context, the Third World is the opposite: poor, weakly capitalist, lacking international influence, highly diverse politically, economically, culturally and deficient in development. The Second World consisted of countries of the former Eastern socialist bloc. They followed a centrally – planned economic system, with generally medium income levels and mixed economic growth rates (Harris et al, 11). After the collapse of the Soviet Union, these countries have been incorporated into the Third World group (Thomas 2008, 470). It was then possible to establish the relationship between ‘developed- developing’ and ‘donor-recipient’ countries, which have become increasingly common particularly in the policymaking world (Harris et al, 12).

Over the decades, the aid relationship has expanded to other areas in addition to the channelling of capital and technical assistance. Forms of aid include: grants or loans; aid coming from official funds and from non-official organizations; bilateral and multilateral relations; tied or untied aid; capital aid or technical co-operation and budgetary aid of projects or programmes. There are other kinds of aid that do not get included in official statistics, such as contributions from corporations, private and voluntary organizations, religious organizations and individual remittances (Hewitt, 2000).

It has been claimed that international aid can worsen problems such as famine and development within some countries. Donations, for example, can strangle local initiative and undermine governments and sometimes donations hinder more than help poor nations. In 2010, the American entrepreneur Jason Sadler created a campaign to collect clothes, which should have been dispatched to African kids. Sadler was ‘bombarded’ by critics who said that the clothes sent to Africa could jeopardise all local traders of fabrics and clothes, because nobody would buy something that people can get for free. Far beyond the economy, badly–planned aid can weaken the political structure of poor countries (Queiroz, 2011).

In 2011, at the Fourth High Level Forum on aid effectiveness in Busan South Korea, world leaders agreed that ‘the most effective and fairest way to administer international aid would be to hand control over to recipient governments’ (McClenaghan, 2012). Despite this agreement, research shows that public money continues to be invested into private companies by donor governments. Even worse, many of these companies are based in developing countries

Despite much research highlighting the problems of international aid, there are those who believe in its continuing value. For example, Jeffrey Sachs (2012) says that there are many studies showing the decrease of child–mortality rates in poor countries. For example, research shows that there has been a considerable decrease in deaths by malaria in Sub-Saharan Africa since 2004, and this is a result of measures to control the disease, measures financed by international aid. The richer countries agreed to reduce the poor countries’ debt, which allows the latter to spend more on health care and less on interest payments (Sachs, 2012).  In 2005, the United Nations Millennium Project recommended specific measures to improve health care in poor countries, while high-income countries helped with the costs that the poor nations could not afford. The Tanzanian government, as example, developed a free system of primary school because of international aid (Sachs, 2012).

Brazil is both recipient and donor of international aid. For many decades, it has been a recipient. However, today this position has changed somewhat. Brazil is still a recipient country, but today its foreign policy favours cooperation with developing countries. As a recipient, Brazil accepted many projects from developed countries. For example, for more than 50 years Japan has cooperated with Brazilian development in agriculture. PRODECER Project of 1970s is a specific case of aid and cooperation with Japan. In 1974 was signed an agreement for the agricultural development of the Cerrado region in Brazil, which was considered one of the world’s most unproductive areas.  The strategic partnership between Japan and Brazil went further and both countries cooperated in developing a similar project in the African Savannas. The results seem positive and African countries were able to improve their economies (JICA, 2009). However, not all results of Japanese aid to Brazil were positive. In the 2000s São Paulo signed a cooperation agreement with the Japanese government to clean and to construct dams on the Tietê River (JICA, 2004).  Years later, the river is still polluted and floods are still frequent. Brazilians do not know where the money was invested and they accused the São Paulo government of corruption.

At the World Trade Organization, Brazil plays as a donor and a recipient of benefits. Brazil is a member of the Generalized System of Preferences (GSP) agreement as a recipient of benefits. The GSP is a programme, which has the objective to promote the preferential access of developing countries to developed markets by tax reductions. By contrast, there is the Global System of Trade Preferences among developing countries (GSTP) in force since 1989, of which Brazil is also member as a donor and a recipient of benefits such as tax preferences, which aims is to tighten commercial relations among developing countries (WTO 2013).

There is a wide range of current challenges to international aid to resolve. However, there are suggestions on how to meet them. First, as the United Nations Development Programme demands, ‘governments of poor and rich countries, as well as international institutions, should start by asking what resources are needed to meet the goal, rather than allowing the pace of development to be set by the limited resources currently allocated’ (Greig et al 2007:132). This pace should be dictated by measurable goals. For example, if a country does not have an efficient internal structure to manage international aid in form of medicines, sending this aid will not help. If the receptor countries are inefficient in distribution, medicaments (or even food) may expire before they reach their destinations. Second, to increase financing without changing unproductive habits of recipients and donors will give poor results. Donors have linked their donations to conditionals inside recipient countries, and these are often linked more to political support than to necessity. Some conditionals are desirable, such as transparency. Furthermore, the problems created by excessive condition may be highlighted by the uncoordinated work of donors, resulting in high transaction costs and decreases the effectiveness of aid (Human Development Report, 2005).

In sum, it is possible to argue that diverse forms of aid can work in different areas, so the aid system is not ‘broken beyond repair’. International aid can be an effort by both developed and developing countries to fight economic and social problems in a sustainable form. Is important to know that international aid must be without racial distinction or segregation based on gender, religion or political believes, mainly because there are universal Human Rights principles. The world community must be engaged in a partnership for development and surpass all difficulties.

About the author

Izabele Bellini,  Master Program in International Development, University of Birmingham, United Kingdom (iza.bellini.2911@gmail.com).

How to cite this article

Mundorama. "The aid business is broken beyond repair? by Izabele Bellini". Mundorama - Revista de Divulgação Científica em Relações Internacionais,. [Acessado em 23/11/2017]. Disponível em: <http://www.mundorama.net/?p=23620>.

 

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