Why?

On the face of it, richer countries helping poorer countries seems like a straightforwardly good thing. And it is true that if all aid were suddenly to stop, millions of people around the world would suffer as a result. However, there is an ongoing debate surrounding the long-term effects of aid on developing countries. It often centres on the fact that aid is seldom given for purely altruistic reasons, but usually comes with strings attached. Aid programmes were started in earnest during the Cold War by the USA/NATO and the Soviet Union as a way of fostering alliances with weaker countries and influencing their politics with capitalist or communist ideology. Since the collapse of communism, the World Bank and the IMF have been accused of being run (at least in part) by people with vested business interests who use aid programmes to open up new opportunities for global capitalism in developing countries. Some say this sort of ‘neo-colonialism’ leads to exploitation and benefits the corporations more than the countries concerned, whereas others argue that aid creates a dependence on the donor countries, and that increased trade is instead the key to sustainable development—hence the slogan ‘trade not aid’. The OECD estimates that 58% of all foreign aid is ‘tied aid’—consisting of bilateral agreements in which money has to be spent in the donor country, thereby increasing the donor country’s exports and exerting its political influence over the recipient country. Tied aid is also less efficient than ‘untied’ aid, increasing costs for the recipient country by around 20%, much of which is spent on paying the high wages of international consultants. Aid has also been criticised for sustaining weak or corrupt governments; with a steady stream of unearned revenue at their disposal, they do not need to rely on the taxes of their citizens, who thus lose the ability to hold them accountable. Alternatively, it might allow such governments to free up funds to spend on potentially dubious areas such as defence, while the essential needs of their people are left to aid programmes.

‘Millions in Africa are poorer today because of aid; misery and poverty have not ended but have increased.’

DAMBISA MOYO, Zambian economist and author of Dead Aid

‘Development assistance based on proven technologies and directed at measurable and practical needs—increased food production, disease control, safe water and sanitation, schoolrooms and clinics, roads, power grids, Internet connectivity, and the like—has a distinguished record of success.’

JEFFREY D. SACHS, American economist, Special Advisor to UN Secretary-General Ban Ki-moon and author of Common Wealth and The End of Poverty

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