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Lecture 17

GEOG 210 Lecture 17: GEOG 210 Lecture 17

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McGill University
GEOG 210
Jon Unruh

International Development Aid & Aid Effectiveness International aid: • financial aid given by governments, NGOs, and other agencies to support economic, environmental, social, and political development. o Money, goods, services, etc • It can include: o humanitarian aid (short term response to a disaster) o bilateral development aid (government – government) o multilateral development aid (government – multilateral institution – government) • Institutions make decisions on how to distribute aid o debt forgiveness *also called "international assistance”, ”foreign aid”, “aid”, and lots of other things. Net official development assistance (ODA) • Largest source of aid is bilateral development projects, programmes and technical co-operation o Next is multilateral ODA o Small portion is humanitarian aid, and a smaller portion is debt forgiveness Do we need to provide foreign aid? • That is, is there a moral imperative to “help” other populations? • “If you are living comfortably while others are hungry or dying from easily preventable diseases, and you are doing nothing about it, there is something wrong with your behavior.” - Peter Singer, Humility Kills, May 2007 • Many countries help in the name of this moral imperative *Does our aid help in the way that we want it to? --> but of a different question to ask The flow of foreign aid: Where Does Aid Come From, Where Does it Go? Aid flows • The biggest recipient of aid it Sub-Saharan Africa, then the Middle East, the South and Central Asia • Development Banks and the World Bank receive a lot of aid and also disperse a lot of aid • Aid totals over $120 billion USD • Sounds like a lot but it is just 0.3% of the world's GDP 9/10/28/visualizing-aid-flows $120 billion USD Aid and migration • Aid o $120 billion • Remittances from migration o ~$450 billion • **only from international migrants. Doesn't count flow within a country's borders o People individually move across borders to take advantages of economic opportunities then send money back home Audio Clip: • Topic: world poverty and how aid and migration can play a role in reducing this poverty • Aid: conflicting studies (increasing/decreasing growth) o Trouble when measuring impacts • Difficulties in detecting impact on economic, social growth. --> class: Aid is a large part of the story but we should also remember how easy it is to let people find work across international borders (comes with benefits to host countries) o Foreign aid is $120 B/year --> this is what people focus on o Migrant earnings sent home is 4X that - not including gains to themselves • Between $400-500 B/year *Despite these numbers, we focus on aid --> Immigration policy isn't focused on as development policy Remittances • Remittances are rising, much higher than ODA • Remittances are almost reaching FDI Remittances in Sub Saharan Africa • Huge rise since mid-2000s • Almost as much as ODA Global economy ($83,000 billion USD) Development assistance ($140 billion USD) = 0.01% of global economic activity --> impact of aid won't turn many economies full circle. The impact of aid is limited, on a global scale there are other large forces at play Back to aid... How much of a country’s GNI is enough? • The UN recommends at least 0.7% of GNI • Only these countries achieve that: o Sweden (1.12%ofGNI) o Norway (1.06%ofGNI) o Luxembourg (1.04%ofGNI) o Denmark (0.88%ofGNI) o Netherlands (0.82%ofGNI) How does Canada do? Canada’s development spending • Focus on Sub-Saharan Africa, Central America and • This has changed over time: growth in donations to Asia, America --> But the biggest change has been a growth in spending in Africa • Total CAD $3.75 billion in 2014 ($165.30/Canadian) • 2.5% of total 2012 budget • 0.32% of Gross National Income How much should we give? • Only at 0.3% Still above Australia, US, and other developed countries • • Many countries do not reach the 0.7% In Africa especially, aid dependency is a problem • Proportion of aid used for government spending is a problem • Aid can make up a dramatic portion of a country's economy The activities and actions of aid: What Does Aid Do? Types of aid 1. Bilateral Aid 2. Multilateral Aid 3. Non-governmental/charitable contributions 1. Bilateral aid: Government-to-government aid • Humanitarian assistance, especially with trade partners and political allies • Development assistance, but often tied to “at-home” interests o At-home interests can be tied to conditions on aid • Example: there was a global markets action plan for all foreign aid given out in Canada. All diplomatic assets of Canada would be marshalled on behalf of the private sector - meant that not just all aspects of governance within Canada but also foreign aid --> All aid tied to economic interested o Canada’s foreign aid policy focuses on “economic diplomacy” in service of private industry, marks an “historic shift” in Canada’s approach to the world. o Global Markets Action Plan: “... All diplomatic assets of the Government of Canada will be marshalled on behalf of the private sector” • USAID "from the American people": o “Fly America Act” - if you're flying with money from the US government, you need to fly with American airlines o In development projects, preferred use of US-owned corporations (supports economic interests in the US, not recipient country) o e.g. rebuilding Iraq 2. Multilateral development bank o The World Bank o Asian Development Bank o Interamerican Development Bank o … • Not based as much on private interests Why are these important? A. Deliver lots of aid B. Set standards for project implementation and effectiveness o Work in so many different places, there is a need to set standards to hold themselves and other players accountable to --> also accountable to people who have interests in them o Ex WB was accused of poor environmental projects --> now they lead in environmental standards of development projects The World Bank = 5 institutions • The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries. o Biggest part of the WB, usually what we're talking about o Loans to governments • The International Development Association (IDA) provides interest-free loans—called credits— and grants to governments of the poorest countries. o Cheap loans to governments and grants The International Finance Corporation (IFC), focuses exclusively on investment in the private • sector in developing countries. o Loans to businesses • The Multilateral Investment Guarantee Agency (MIGA) promotes foreign direct investment into developing countries • The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes. World Bank, # of projects financed • Far reach across the world • Gives out loans --> need to give them out in places likely to pay loans back Canada’s development spending
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