How Far would you agree with the Claim that the Primary Motive for Giving Aid is to Secure Development in the Recipient Countries?

There are a few different potential reasons why a donor may provide aid for their own gain. One of these reasons is national security. One example of this is when America decided to switch a lot of its aid away from Africa to Central America and the Caribbean as the threat of attack became apparent from the Soviets. Donors also often give aid to countries to create a favourable political relationship between them. This is true in recent times, as America has redirected a lot of aid to Middle-East countries, such as Jordan, Israel and Egypt, as concern over instability in the region rises.

A lot of actions on the part of donors are done with the veneer of being selfless, however underlying intentions of self-promotion are apparent. One example of this is the use of development assistance loans, which are given at a concessionary rate, these loans are approved to give the economy an injection of capital and decrease the foreign exchange gap. This may seem very appropriate however a smaller contribution of debt relief for that country would have a greater positive effect on the foreign exchange gap. These actions begin to show how each aid investment is in some way linked to the good of the donor and not primarily the development of the recipient. The international community must ask itself what really matters for development, so that good intentions can be translated into real benefits for the poorest countries and not just public relations exercises on a global scale.

There are other arguments against the claim that the primary objective for giving aid is to secure development in recipient countries. One of these is the consistent failure of aid to provide economic growth and the counter productive affects it can have on a nations political and economic stability. As Frederik Erikxon, Chief Economist of Timbro says

“Aid has failed to ‘fill the gap’. Instead, it has, over the past fifty years, largely been counterproductive: it has crowded out private sector investments, undermined democracy, and enabled despots to continue with oppressive policies, perpetuating poverty.”

Africa is a great example of these sorts of problems. Aid to Africa from developed countries has increased dramatically between 1970-1995; it has reached almost $1 trillion in the last 50 years. This huge aid investment though has not delivered the positive changes it promised and in some cases can be said to have been counter productive to the long term stability of the relevant countries. In 1995 aid dependency was almost 20 % in Africa and the amount of aid as a share of government expenditure was up to 50% . This shows a dependency on aid that is unfeasible to sustain or replace should the aid be redirected elsewhere. During the period of sustained aid growth in Africa gross domestic product (GDP) fell, and for some years even fell into negative figures. There are no concrete links between increased aid and economic growth. Foreign aid is possibly only one aspect that has to be considered when trying to stimulate growth and development in a LCD’s, but it is not the overriding factor. Aid must be linked to good economic policy from the government in power for it to positively affect growth.

Another reason why aid can be counter productive to the development of a country is that it is very often spent on the incumbent ruler and for his personal gain rather than that of the country. Paul Rosenstein-Rodan, a former deputy director at the World Bank Economics department when he said, supports this claim

“When the World Bank thinks it is financing an electric power station, it is really financing a brothel.”

Also aid has been used in the past to strengthen corrupt and oppressive regimes that would otherwise have been overthrown.

There is a tendency for aid to push out foreign investment in developing countries, and it therefore becomes almost entirely a government activity. In this case there will be a huge increase in state-owned enterprises. These projects soon become a place for corruption to thrive. This link shows that aid often underpins corruption and high levels of aid also tend to erode the structure of the countries government. Due to the lack of strong infrastructure and state institutions in LDC’s it is hard for the countries to use foreign aid effectively. This said, aid is only as good as the ability of a recipient’s economy and government to use it prudently and productively.

Thus, the fundamental dilemma is that countries most in need of aid are often those least able to use it well. That sets limits on the extent to which large infusions of foreign funds can make a difference.

From this information the conclusions are two-fold: countries which receive a substantial portion of their revenues from foreign aid may be less accountable to their citizens, and they may face less domestic pressure to maintain popular authority. In this case corruption and tyranny will rule. The more aid countries receive from abroad, therefore, the less incentive they have to invest in effective public institutions. Also, allocating aid towards alternative development activities might be most beneficial. Funding the eradication of endemic diseases, peacekeeping activities and debt relief are possible alternatives to just pumping money at the countries. This information clearly shows that foreign aid donors do not always take the welfare of the recipient of the aid into account. They simply provide levels of aid around the world without any forethought as to how it may benefit the country. Also it can be said that not only does this aid not help the development of LDC’s but can actually have a serious negative effect.

So far I have argued the point that very little if any foreign aid is given selflessly, and most of it is given predominantly for the donors own development. There is of course a case for the primary motive for giving aid being to secure development in recipient countries. The Swedish pioneered this case in 1962. As they initiated their foreign aid programme they claimed morality to be the sole motive for it. Several other aid donors such as France, England and America quickly followed this change in stance. All claiming now that their decisions to donate aid are based on ‘human solidarity, on alleviation of misery, on need, on a sense of equality and on the recognition of a newly created international community.’ These claims are based on the belief that the rich have a duty to help the poor. In the mid 1970’s the views of donor nations began to change again. Britain in 1975 published a white paper called The Changing Emphasis in British Aid Policies, More Help for the Poorest. This paper aided by the Minister for Overseas Development, Dame Judith Hart, aimed to further the understanding and expand upon the moral duty of the government. In doing this she argued that there could be a potential overlap between the short-term moral objectives and long-term political goals. Sweden furthered the view that donor country’s personal interests can be combined with those of the poorer nations in need of aid, when they say

“Our motives are not entirely disinterested. If the gap between the developing and the rich continues to grow, tensions in the world will go on increasing, with adverse affects for all nations.”

This view that helping the poorer nations is done for the good of the donor as well as the recipient, I think quite succinctly demonstrates most nations approach to aid donation.

In conclusion I tend to disagree with the notion that the primary objective of giving aid is to secure development in the recipient country. Most aid is given with the intention of receiving some reward in return. These are often intangible goods such as political relationships and alliances, however sometimes increased trade between the recipient and the donor can be a factor. Also I do not believe that in some cases donor nations even believe that their money will be spent on projects harbouring development and growth anyway. A lot of the time the aid will just get used or spent on the leader, on prestige items such as statues or shrines. It is because the aid doesn’t seem to be helping growth in poorer countries that new solutions need to be found. Indeed, other courses of action such as giving poor nations more control over economic policy, financing new development-friendly technologies, and opening up labour markets could have more significant benefits. It is time to direct the attention of the world’s wealthiest countries to other ways of helping the poorest, ways that have been for too long neglected.

Bibliography

Cassen, R. 1994, ‘Does Aid Work?’, Calrendon, Oxford. [2nd Edition]

Maizels, A and Nissanke, M. 1984, ‘Motivation for Aid to Developing Countries.’ World Development 12:9.

Riddel, R. 1987, ‘The Unquestioned Consensus’ Foreign Aid Reconsidered, John Hopkins University Press, Baltimore, (Chapter 2).

Tomasevki, K. 1993, ‘Development Aid and Human Rights’, Pinter, London.

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