Photo courtesy of Sally L
he stood outside the clinic with her arms crossed. Dust was settling from where he had run across town. “He’s wrecked our fucking ambulance,” she said. She was right. The man had thrown a rock the size of a brick through the back window of the ambulance. It had smashed the satellite phone & hit some of the equipment. I stood next to her scratching my head. I’d only been here a week, but this wasn’t the first time I’d asked myself, “Does this community really want a clinic?” Be them missionaries, mercenaries or misfits, whatever drives humanitarians is a big mystery to most of us. And even if we understood why, most of us wouldn’t do it. But for those of us who do, there has always been a reasonable assumption, at least from the outset, that the benefits of aid work outweigh the harms. This was the assumption that I had made, on making the decision to volunteer in a clinic servicing a community which was in desperate poverty. The timing could not have been more perfect. It was June, 2005. Millions were attending Live 8 concerts, flaunting their white wrist bands & trendy, altruistic hairdos. The G8 leaders were about to meet in the UK to discuss whether to increase aid to the third world. And the International Monetary Fund (IMF), contrary to its official stance, published two research papers with this unsettling conclusion: there is little evidence supporting the assumption that aid boosts growth. According to the United States Agency for International Development, western countries have spent more than one trillion
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Aid: or does it? S
dollars in grants and loans to 70 countries since the early 1950s to help reduce poverty. So how is it that foreign aid has been unable to pull the world’s poorest nations up by the bootlaces & out of poverty? The first reason is corruption. Take the instance of when Australia donated aid to Papua New Guinea - of great benefit to PNG’s leaders as they licked the honey pot clean. A Senior Fellow at the Centre for Global Development in Washington, D.C. says aid is least effective in countries such as Somalia and Haiti, where governments are especially weak, and in politically unstable countries, like Iraq and Afghanistan. The second is this: the amount of foreign aid in many poor countries is very large compared to the miniscule size of their economies. The sheer size of the inflow lifts the value of the local currency, thereby making imports cheaper and exports more expensive, reducing output in other sectors of the economy. The third is quite an overused piece of rhetoric used here in Australia, often espoused to prevent funds being diverted to Indigenous Australians. It is that aid flow becomes an alternative source of funds that reduces the need for communities & governments to become self-reliant. Less effort is put into nourishing domestic sources of growth, creating a good environment for business, & spending money where it will do most to reduce poverty. As Michael Radew of The World Policy Institute in New York says, “It encourages all the wrong economic policies that made those countries poor in the first place.”
But the IMF economists who wrote the offending report are the first to criticise their findings. One criticism is their method – their comparison of broad growth figures across different countries is flawed, and the findings could be overrepresented rather than real effects. Secondly, the research studied aid pre-1990 rather than recent aid, since influenced by massive reforms. For example, in the past five years, most African countries grew at a faster rate in per capita terms than Australia. Nevertheless, the report highlights the importance in the actual execution of providing aid. The authors of the report admit that the findings, which relate more to the past than the present, do not imply that aid cannot be beneficial in the future. “Overall, we see our papers as urging care, prudence and perhaps a little more creativity and experimentation when aid is delivered.” Aid is not a cure-all solution for the developing world’s problems but it has undisputedly been effective in reducing suffering and poverty. It has been vital in improving the health of people in poorer countries, contributing to better education and advancing human rights. While economic growth and international trade are critical to the long term reduction of poverty, continuing assistance is an essential part of the solution. And the future relies on greater efforts to crack down on corruption, to open markets and reduce subsidised competition to exports, ensuring that in this new age of aid, help will go to where it will do most good.
by Sally L
W Lending a Hand: the Aid Issue ISSUE 2
September 2006 1 Aid: or does it? by Sally L 1-2 Lessons from a frozen Capital by Tonya Littlejohn 2-3 Interview with Dr Mark Moore by Andrew Perry 3 AMSA Conference by Gail Cross 4 Upcoming Events & Opportunities 4 Links & Resources by Jacqui McDonnell
hen it comes to thinking about international assistance, buzz words such as ‘collaboration’, ‘sustainability’ and ‘empowerment’ spring to mind almost reflexively. Yet despite the good intent, many programs fall short of achieving positive and sustainable outcomes. Political agendas, competing interests and social factors
serve as impediments to the delivery of aid. When such obstacles are stemmed and overcome however, aid has the potential to bring enormous change and improvement to the lives of those in greatest need. Five years ago, I spent a year living and working in Ulaanbataar, Mongolia, a beautiful, desolate country sandwiched between Russia and China. With up to eight months of winter conditions and temperatures that regularly drop to minus forty degrees, life for many Mongolians is a constant struggle against the elements to meet basic needs. Mongolians eat what the land produces, so mutton is plentiful, but vegetables are scarce. Life expectancy and health status of the population are poor. It is a country undergoing huge socio-economic transition where traditional
Inside a Mongolian yurt
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Lending a Hand: the Aid Issue
Lessons from a frozen Capital