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Aid Debate Recap
On Monday, we noted that the Munk debates program would feature a discussion about foreign aid and we encouraged those who watched to post their thoughts and reactions. ONE’s Policy Advisory Board member Paul Collier, along with Stephen Lewis, Dambisa Moyo, and Hernando de Soto talked for almost two hours about the opportunities and challenges of foreign aid. The purpose of the Munk debates is to “enliven and elevate public discussion of the political, social, and cultural issues shaping the course of the world’s events and Canada’s future.” This goal was certainly accomplished – the debate participants engaged in a lively discussion about their thoughts on how and why foreign aid has affected Africa and what are the best ways to reduce reliance on donors to finance programs. Exchanges like this are helpful to educate people about foreign aid and the array of perspectives about it.
While there was disagreement between the two ’sides’, represented by Moyo and de Soto, arguing that aid does more harm than good, and Lewis and Collier, arguing the opposing view, there was common ground. The debate participants agreed that African countries cannot continue to rely on foreign aid to the extent they are now, that strong leadership and good governance are critical to transitioning from aid dependence, and that aid has had mixed results over the past 60 years. There was also agreement on the importance of the private sector in economic growth, through investment and job creation.
The audience voted before and after the debate on whether foreign aid does more harm than good. The outcome? The majority of people do not believe that aid does more harm than good. This means that both before and after the debate, the majority of the audience believes that aid does more good than harm. Before the debate, 61% of the audience voted ‘against’ the principle that aid does more harm than good, compared to 59% of the audience who voted after the debate. The opposing side, who believe aid does more harm than good, had 39% of the votes before the debate and 41% afterwards.
What do you think? Watch the webcast and let us know.
-Lisa Fleisher
Donors suspend funding to Zambia in response to corruption reports
The Swedish and Dutch governments announced today that they will suspend $33 million in aid to Zambia following reports about embezzlement in the Ministry of Health. Reports indicate the civil society was calling for the Ministry of Health to publish expenditures, but former President Mwanawasa cancelled the spending reports, which may have led some officials to siphon funds for their own use. In response to concerns that the lack of funding will affect the delivery of health services, the Minister of Finance Musokotwane stated that the Zambian government will develop a plan to fill the gap and investigate the corruption charges.
The transparent publication of spending by donors and governments is a critical component of ensuring money for development is used as effectively as possible. Like the Global Fund to Fight AIDS, TB, and Malaria, the Swedish and Dutch governments’ response to reports of embezzlement in the health sector suggests their support for the idea that well-governed programs are critical to successful development and that aid can help to encourage transparency and accountability.
-Lisa Fleisher
Steve Radelet: We’re asking the wrong question
On the Financial Times blog, Steve Radelet offers a response to the question “Is aid working?” Radelet takes to task Dambisa Moyo’s “extreme views” by suggesting the more important question is “Under what circumstances does aid work, and what can be done to make it more effective?”
Excerpts below, full post can be found here
Ms. Moyo argues that “Millions in Africa are poorer today because of aid; misery and poverty have not ended but have increased.” But this storyline is at least a decade out of date. Since 1996 - twelve years now - economic growth across sub-Saharan Africa has averaged 2.3 per person per year. And it is not just due to oil. There are 18 strongly performing countries, none of them oil exporters, that together have achieved per capita growth averaging 3.1 per cent, meaning that average incomes have increased nearly 50 percent in twelve years. Most of these 18 countries are now democracies, including Mozambique, Tanzania, Ghana, Lesotho, Namibia, Mali, South Africa and others, and the majority are measurably improving governance. Across Africa literacy rates are up, infant mortality rates are down, and 34m more children are in school since 2000. And according to analyses by the World Bank, poverty rates (at $1.25/day poverty line) peaked at 59 per cent in 1996 and dropped to 51 per cent by 2005, a remarkable drop in nine years. Poverty in Africa has been falling, not rising.
What happened? The turnaround is primarily due to stronger leadership in Africa, much better economic policies, lower debt burdens, new cell phone and internet technologies, and an emerging and vibrant business class. What about aid? Aid has been neither panacea nor demon. Much has been wasted on sordid dictators, projects that didn’t fit local needs, and bureaucracies that ensure only a fraction of funding gets to those that need it. But much has helped support success.
-Chris Scott
Mo Ibrahim: Good governance will bolster African aid
In the Financial Times, Mo Ibrahim argues that while investment and good governance will ultimately solve Africa’s problems, “effective aid has an important role to play in the quest for sustainable economic growth and poverty reduction.” Ibrahim offers this assessment in light of the recent debate about aid in the wake of Dambisa Moyo’s book Dead Aid. Ibrahim argues for a “holistic approach to development in Africa that is centred on good governance.”
Excerpts below, full piece here
The critical argument should not be about aid or no aid – no one can question the necessity of pure humanitarian aid as long as it satisfies basic good governance criteria. The argument should be about where to focus aid to achieve the best returns for donor taxpayers and aid recipients. I propose two areas to focus aid: the hardware of Africa, infrastructure and regional integration; and human software, in the form of education and health.
The reality is that most African countries are sub-scale and fundamentally unable to compete in a global market. If economies the size of the UK, Germany and France find regional integration necessary to ensure growth, then 53 un-integrated African states have a competitive disadvantage. This fragmentation is evident in Africa’s transportation infrastructure, geared towards trade outside rather than within the continent. Africa needs to integrate its economies and open their borders to each other. Development aid can help these efforts and facilitate intra-African trade. This capital investment cannot succeed without investment in education and health.
Finally, while debate on development aid is of great importance, more of this energy should be spent on climate justice. Africans have emitted the least carbon per capita but will have to face the greatest consequences of its emission. A worthier use of the time of these great African and other economists is to devise a solution that allows the continent to meet the adaptation and mitigation costs of climate change.
-Chris Scott
Jeffrey Sachs: Aid Ironies
Jeffrey Sachs wrote a strong op-ed in the Huffington Post on Sunday outlining the flaws he sees in many anti-aid critics arguments and highlighting the many benefits of effective aid. I pulled out some excerpts below, but recommend reading the full piece.
The debate about foreign aid has become farcical. The big opponents of aid today are Dambisa Moyo, an African-born economist who reportedly received scholarships so that she could go to Harvard and Oxford but sees nothing wrong with denying $10 in aid to an African child for an anti-malaria bed net. Her colleague in opposing aid, Bill Easterly, received large-scale government support from the National Science Foundation for his own graduate training…
I certainly don’t begrudge any of them the help that they got. Far from it. I believe in this kind of help. And I’d find Moyo’s views cruel and mistaken even she did not get the scholarships that have been reported (Easterly mentioned his receipt of NSF support in the same book in which he denounces aid). I begrudge them trying to pull up the ladder for those still left behind. Before peddling their simplistic concoction of free markets and self-help, they and we should think about the realities of life, in which all of us need help at some time or other and in countless ways, and even more importantly we should think about the life-and-death consequences for impoverished people who are denied that help…
Americans are predisposed to like the anti-aid message. They believe that the poor have only themselves (or perhaps their governments) to blame. They overestimate the actual aid from the US by around thirty times, so they imagine that vast sums are flowing to Africa that are then squandered. Many believe, typically in private, that by saving African children we would be creating a population explosion, so better to let the kids die now rather than grow up hungry. (I’m asked about this constantly, usually in whispers, after lectures). They don’t understand the most basic point of worldwide experience: when children survive rather than die in large numbers, households choose to have many fewer children, in fact more than compensating for the decline in child mortality. Africa’s high child mortality is ironically a core reason why Africa’s population is continuing to soar rather than stabilize as in other parts of the world.
Of course, most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs - the good and the bad - into one big undifferentiated mass, rather than helping people to understand what is working and how it can be expanded, and what is not working, and should therefore be cut back. Nor do Americans hear that many poor countries graduate from the need for aid over time, precisely because aid programs help to spur economic growth and successfully prepare countries to tackle future priorities. US aid to India for increased food production in the 1960s paved the way for India’s growth takeoff afterwards. There are countless other examples in which countries have benefited from aid and then graduated, including Korea, Malaysia, Taiwan, Israel, and others. Egypt is on that path today, and Rwanda, Tanzania, Ghana, and others will be as well if both donors and recipients carry forward with a sensible assistance strategies…
Creating More Impact for U.S. Foreign Aid Dollars
During this C-Span interview, Rev. David Beckmann talks about the need to reform U.S. foreign aid. A more efficient foreign assistance system-with better coordination, better accountability, better clarity-will ensure that people get help faster and more effectively.
The process started with the submission of a new bill in Congress, HR 2139, the Initiating Foreign Assistance Reform Act of 2009. Beckmann is president of Bread for the World and co-chair of the Modernizing Foreign Assistance Network.
-Adlai Amor, Director of Communications, Bread for the World
New Aid Effectiveness Bill Introduced
On Tuesday, Representatives Howard Berman (D-CA), Chairman of the House of Representatives Foreign Affairs Committee and Mark Steven Kirk (R-IL) introduced the ‘Initiating Foreign Assistance Reform’ Act of 2009 (HR 2139). The bipartisan bill represents a remarkable step forward in the effort to better organize and coordinate US foreign assistance programs. What is particularly striking about this important bill is new language requiring increased transparency in American aid programs for developing countries.
As a key member of the group who launched Publish What You Fund (PWYF), ONE has been actively involved in the debate around increasing aid effectiveness and is very proud of the advisory role PWYF played during the drafting process of a new bipartisan bill designed to increase accountability and improve the effectiveness of U.S. foreign aid.
Section 4 of the bill addresses how US aid will become more transparent, stating that “the American taxpayers and recipients of United States foreign assistance should, to the maximum extent practicable, have full access to information on United States foreign assistance.” Departments and agencies responsible for directing foreign aid will be instructed to post information on the internet about the amount of money disbursed as well as information about contract agreements and monitoring reports for specific programs on a country-by-country basis. Additionally, the bill instructs that information should be posted in a timely way. In addition, the bill states that because of the importance of understanding the role of foreign assistance from the United States relative to funding from other donors, the US should participate in the International Aid Transparency Initiative, established on September 4, 2008, at the Accra High Level Forum on Aid Effectiveness.
Aid effectiveness is critically important, especially in these tough budgetary times. We’re excited to see a bipartisan team of congressional leaders introduce this bill and looks forward to working with the powerful group of unlikely allies, like William Easterly, to increase aid effectiveness, accountability and transparency. Keep an eye on the ONE Blog for updates on how we can help move this bill through Congress.
-Lisa Fleisher
George Clooney’s Darfur work puts him in Time 100
Time magazine honored George Clooney yesterday as one of its 100 Most Influential People in 2009 for his activism around the crisis in Darfur. George has been a great friend of ONE, and working with the organization he cofounded, Not on our Watch, he has been an influential player in the fight to focus attention on the humanitarian crisis in Darfur — and on the responsibility of the US government and other world leaders to do something about it.
ONE cofounder Bono writes about Clooney in the Time 100 Issue:
His commitment to ending the atrocities in Sudan is not a role, not a performance. It is real — and it is serious work. Some people think celebrities should stick to the script, stay feted and fetal in their air-conditioned trailers. Some people think it’s an appalling juxtaposition to see the rich and famous in a photo call with the vanquished and the vulnerable.
It is. George knows that. But he also knows that the cameras trained on you and the column inches dedicated to you could be covering something a little more important than, well, you. Like the slaughter of innocents in Darfur. Like the refugee camps full of starving Sudanese.
And he knows the details, the nuances of his and your sides of the argument. Hey, if you’re going to pay attention to George Clooney, he’s going to insist you pay attention to this stuff. Now there’s a radical idea.
Read the full text here.
Bono also interviewed George on his work in Darfur for a CNN special on the Time 100 hosted by Anderson Cooper that will air Friday night May 1 at 11 PM EDT on both CNN and CNN International. It will re-air on CNN Saturday and Sunday at 8 and 11 PM EDT.
-Kathy McKiernan
More on Dead Aid
I would like to address some of the concerns raised in the blog about an email on Dead Aid that we sent to a small number of people who we have worked with in Africa. I’d also like to flesh out our thoughts on the book – what we agree with and what we don’t. We welcome this debate about the book and more broadly about the role aid has to play in combating poverty in Africa.
In terms of the email, my colleague Tyler Denton contacted Iris Mwanza, who he met on a trip to Zambia last year, to ask if she wanted to comment on the book and on how she has seen aid working in Zambia, particularly given that she oversees an AIDS program funded by US aid. Why did he do that? Dambisa is saying that aid doesn’t actually reach people in Africa and they would not suffer if it were cut off. We know that is not true. We could simply state our belief and back it up by verifiable statistics, but we thought it would be more impactful to hear from people working on the ground in Africa who could speak to their personal experiences with aid. It wasn’t an attempt to shut a conversation down, but an effort to open one up. And that’s succeeded! We welcome a vigorous debate on the book and more importantly on how we can all work together to help those living in extreme poverty. On that front, our concerns with the book will be no surprise to Dambisa. We have met with her several times. Our executive director Jamie Drummond even met with her before her book was published and gave her statistics about the positive difference aid was making – in fighting AIDS and malaria and putting kids in school, for example – but she did not include them. He spoke to her again in the past week. We are in a dialogue with her and we agree with her on the importance of trade and investment in fighting poverty in Africa, two things we have actively supported ourselves. We also agree with her that not all aid is spent well and that many many africans have concerns about aid, because in certain cases if delivered inappropriately it can weaken the accountability of government to citizens. That kind of aid needs phasing out and reform. We’re for the kind of smartaid that delivers results and actually strengthens the accountability linkage. But we part ways when she says that aid is not getting to people and that Africans won’t suffer if it’s all cut off in 5 years. What about the 2 million Africans with HIV who are alive today because they take ARVS paid for by aid? What would happen to them if aid were completely cut off? Or what about the millions more who are still dying of HIV because there is actually too little aid to pay for medicine for everyone who needs it?
I also want to address the comments some have made on “humanitarian aid.” In her interviews and in the book, Moyo says she believes in an exception for humanitarian aid, which she explains to mean the kind of aid provided after a disaster like an earthquake or the tsunami. If Moyo has been misunderstood and also believes in the importance of funding critical poverty reducing programs for combating AIDS and malaria that would be great news and we would be happy to amend our statements on the book. But when you look at her interviews and the book itself there is no evidence that she intends exceptions for these vital programs. In fact, see her comments on health related aid in an interview with Australian Broadcasting Corporation (excerpt below.)
Let’s keep the conversation going! We all have a common goal in wanting to save lives and see a healthy and prosperous Africa. We welcome a constructive debate and suggestions for how to keep doing better.
-Edith Jibunoh
ABC Transcript 3/17/09 (excerpted)
Reporter: Philip Williams
WILLIAMS: And you’re absolutely confident that removing that aid is not going to leave at least some people without food and medicine?
MOYO: I think the ones that will be effected most will probably be the African elite as opposed to the broader population.
WILLIAMS: What will they lose?
MOYO: I think they will lose possibly their bank accounts in Geneva in the worst-case scenario. But, I think beyond that they would also lose the ability to have leisure time and they’ll be required to actually go out and start to work hard to find money to support their social programs in Africa.
WILLIAMS: If you cut off aid within 5 years, surely that’s going to leave millions of people without the support they are now dependent on - food aid, medical aid - aid that really keeps people alive.
MOYO: I don’t believe that’s the case. Most Africans do not see any of the aid that you are alluding to. It’s…. again, their best case scenario on some projects is 20 cents in the dollar that actually makes it to an African - and that’s best case. Effectively, if we continue down this path, we will have many more Africans living in poverty in many… in a few years to come, and that is really the problem - that there are no jobs coming out of an aid model.
Urging Obama to Modernize Foreign Assistance
In late January, you heard from us about a group of global development-focused NGOs across the United States who have been advocating for the U.S. to update the way it administers its development programs. This group of organizations—collectively called the Modernizing Foreign Assistance Network—has gone public once again, and together with other development organizations and interested individuals, has issued an open letter to President Obama and Congress asking for quick action to make U.S. global development efforts more effective. This letter urges our President and Congress to make modernizing foreign assistance a top U.S. foreign policy priority, along with diplomacy and defense .
Your voice can add strength to this letter. Please click here to read and sign this request.
-Chandler Smith
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TAGS: Aid Effectiveness, Dambisa Moyo, Dead Aid is Dead Wrong, Development Assistance, Foreign Aid, Policy News, Spotlight