Brandt, a globalisation theorist believes that aid should be used to generate trade. He argues that the north facilitates growth in the south and vice versa. This is because of trade relations between the two. Brandt argues that they have a win-win relationship. This idea is criticised as the net flow of resources is greater from the south to the north, which effectively means that the third world is financially keeping the first world. Imports to the third world open up new markets for first world businesses in terms of parts, repairs and servicing. Rather than benefiting the third world with aid, the first world drain their resources. This also prevents real independence and development within the third world, and only facilitates further underdevelopment. Further, in regard to imports to the third world, they get really a very poor price for their goods, which means once again, the first world benefit through aid by getting cheap imports, while the third world suffer unfair prices for their goods.
Brandt believes that the consequences of his theory of interdependence
are positive political effects on both the first world and the third world. This is criticised as in reality, many of the new political institutions in the third world are “puppet regimes” This means that the governments are politically corrupt, and do not represent the people, who are often culturally alien to them. People that have criticised his theory believe that the governments were often the tools of the western powers, in that they allowed their people to be exploited in the interests of themselves and foreigners. One of the main ways that the third world is exploited is through aid tying. Up to 70% of government aid has direct commercial benefit to businesses. They do this by providing expertise and technology for specific third world projects. The economic considerations that arise from this could lead to debate over who benefits from this aid, as it seems to be that the first world makes more than they give. Through aid tying, they pursue their own commercial interests. An example of a form of aid tying, where the people were most definitely not benefiting, was through the incident regarding Westland helicopters. In 1985 the British government gave aid to India, provided that part of the money was used to buy Westland helicopters. This got the British business out of financial trouble. The helicopters proved unsuitable for the Indian terrain, and only lasted a very short period before breaking down. The Indian government couldn’t afford to repair or replace the helicopters, and therefore this aid was wasted on the third world, but still benefited the first.
Aid tying could also be seen as a way of opening up new markets. This is because once a country has obtained a western product, there is a possibility that they will become dependant on it, and therefore continue inputs from the first world. An example of this was when the British government give aid to Bangladesh in the form of electricity supply to the wealthy suburbs. This opened up new markets for the first world, but did it benefit the third? The answer is no, it provided very little benefit to the third world, because it helped those who needed it least, in other words, those who could afford to keep paying for the electricity, and continue to benefit the first world. We can draw from this that aid does not benefit the people who need it most. Rather it benefits the first world, Multi-national Corporations, and the elites in the third world, who don’t need it as much as others. According to Patricia Hayter, there are political and economic considerations attached to aid, which means that the donor benefits more than the recipient. She believes that aid is used as a form of control, and that if aid was to be stopped, the first world would suffer more than the third as there is a greater resource flow from the third world to the first. It is not only bi-lateral aid that economic considerations apply to. Even the world bank tends to sponsor projects it thinks will be profitable. Long term health, education and welfare projects are essential for growth, but they are not profitable, therefore they do not get invested in.
As well as economic considerations attached to aid, there are also political. International agencies attempt to ensure that policies that they themselves have decided are adopted by governments hoping to receive aid. The World Bank has constantly been dominated by America, which effectively has the same political interests as the American government. Therefore, aid is not given to hostile government, and when a hostile government comes to power, it is withdrawn. Essentially, the relationship between rich and poor countries are political ones. An example of this is Columbia, who had a long close relationship with the world bank during the period of 1956-1958. During this stage it was headed by a socialist government, and the bank stopped lending money. The main political concerns attached to aid are to create and maintain dependent political allies, to create dependents in good strategic positions, more military help, landing sites, and protection; due to being surrounding by allies.
An important source of assistance for third world countries is food. In the long term, food aid can have serious negative social and economic consequences for the third world, such as undermining the third world agriculture by depressing local markets and discouraging local production. The US governments can afford to give food or sell it at a lower price than the third world people can produce it. This puts third world farmers out of business. The inflow of food aid, even in emergencies, has proved to be constantly detrimental to local farm economies. An example of this is Somalia. In 1991, a civil war began which interrupted domestic transportation. This meant that there was a food crisis in large regions of the country. An estimated 4.5 million people (over half of the total estimated population of the country) were threatened by severe malnutrition related diseases. In December of 1992, U.S. troops landed to distribute food, when the worst of the famine was already over. The death rate had dropped a huge amount, from three hundred a day, to seventy. Crops of rice, sorghum and corn had already been harvested by the people of Somalia. However, when food aid poured in, the prices received by local farmers for their harvest was brought down by seventy five percent, and even then sometimes they couldn’t sell their goods at lower prices. The U.S. government’s solution to this was to provide them with money to buy American food from U.S. companies. Once again, this is pumping the money back into the donor, and putting the recipient at a disadvantage.
