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12 01 Lecture Notes - AID.docx

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Western University
Geography 3312A/B
Haroon Akram Lodhi

International development assistance: help or hindrance? Fall Term Final Exam: Slightly heavier weighted to the second half of term, but covers everything Part 1: 20 true or false. Each question is worth 1% of the total test mark. 20 minutes Part 2: 20 multiple choice questions. Each question is worth 1% of the total test mark. 20 minutes Part 3: 10 short answer questions – five must be answered in at least one double-spaced page per answer. Each answer is other 5% of the total test mark. 30 minutes Part 4: 5 long answer questions – one must be answered in at least three double-spaced pages. Worth 35% of the total test mark. 40 minutes Concepts from part 3 and part 4 will not overlap. Aid  But aid is far more complex than humanitarian relief  It has different o forms o motivations o intended beneficiaries  many times the people who the aid is intended for don’t receive it o delivery agencies o scale o time horizons o impacts Charitable Impulse  Ian Smillie traces the origins of the charitable impulse back to: o the code of Hammurabi – ‘justice to widows, orphans and the poor’ o ancient Chinese philosophy – humanism based on family and society o Confucian code of ethics – goodness, benevolence and love for all o Buddhism – reduction of greed and giving of alms to the poor o Hinduism – good works as means of achieving release from the cycle of rebirth o Jewish law – tithing to charity o Greek democracy – based on financial contributions towards education, health, culture and welfare for the elderly o Christianity - charity as a means of salvation o Islam – Zakat as a religious obligation  Smillie also outlines the origins of ‘charitable’ organizations - ie, the Christian church’s involvement in hospitals, schools and universities began in the Dark Ages (Smillie: 23)  Some of the motivations for charitable assistance are thus: o Altruism  Self-sacrifice o fear o guilt o self-interest  the socializing or political nature of voluntary organizations (Smillie: 28)  (Smillie, Ian (1995) ‘Naming the rose: what is an NGO?’ in The Alms Bazaar: Altruism Under Fire-- Non-profit Organizations and International Development, Ottawa: International Development Research Council, pp. 22-36) Charitable Assistance  Charitable assistance continues to this day, through churches, non-governmental organizations and civil society organizations – but it is now called private aid  But aid is different from earlier charitable assistance (I)  singular aim or framework at its inception  Riall Nolan argues that this emerged out of a specific project:  ‘… the West recognized the need for a framework to meet the challenges of collective security and economic reconstruction, sure to dominate a postwar world’ (Nolan: 34)  (Nolan, Riall W. (2002) ‘The rise of the development industry’ in Development Anthropology: Encounters in the Real World, Boulder, CO: Westview Press, pp. 30-64) o The origins of aid as we know it lie in economic reconstruction and economic security  But aid is different from earlier charitable assistance (II) o The enormity of the organizations and resources involved  The Bretton Woods Agreement (1944) created a framework for development premised on: o rapid reconstruction and growth as a basis for national economic health o trickle down benefits from this national economic health would reach groups and individuals o political stability, greater democracy, and increased participation would follow (Nolan: 35) enhance security o (Nolan, Riall W. (2002) ‘The rise of the development industry’ in Development Anthropology: Encounters in the Real World, Boulder, CO: Westview Press, pp. 30-64) o There is a big link between aid and economic construction or reconstruction Motivation for Aid  Thus, the motivations for aid are more diverse than the motivations for charitable assistance o philanthropic, still o promoting foreign policy goals o promoting economic growth in developing countries o promoting specific industries/companies in developing countries and/or the donor country o follow the leader: others do it, and so we will as well  Rise of Spain and Ireland to giving aid – South Korea has only become a donor in the last two years History of Aid  These various motivations are witnessed in the history of aid o origins (1940s – 1950s)  the Marshall Plan  The USA giving assistance to Japan, France, Germany and parts of Italy  Motivation: to prevent these countries from falling into the communist sphere. Germany had the largest communist sector, so it was a real fear  US$13 billion of aid to rebuild job creating state-led market economies in Germany and Japan  the Cold War and international rivalry  decolonization and development  US food aid and aid to US farmers  government-based (‘bilateral’) aid agencies created in the late 1950s and early 1960s o Government to government aid agencies  1960s & 1970s o aid flows stagnate in the 1960s to the late 1970s o aid very important relative to FDI o a focus on physical infrastructure, food and commodity aid, and technical assistance  Food aid to support typically American farmers  “Technical assistance”: this is how it can be done – let the government decide o a focus on agriculture and social development in the 1960s o a focus on the poorest countries and basic human needs in the 1970s  the 1980s o structural adjustment and aid conditionality o changes in US aid policy under the Reagan administration o the increased politicization of aid  As a political move instead of ensuring human security o the rise of Japan as a donor  Hugely inefficient aid program o a focus on poverty alleviation, human resource development, women and development, and the environment, under the aegis of structural adjustment  The first focus on the environment  the 1990s o the end of the Cold War and aid flows to Eastern Europe and the former USSR o a dramatic rise in FDI to selected developing countries  Foreign direct investment – continues today o the neoconservative critique of aid  People saying aid hurts, not helps countries o campaigning for debt relief o the rise in private aid administered directly by NGOs  Non-Governmental Organizations o a focus on private sector development, democracy/good governance/human rights and sustainability USAID: Aid and Politics  An important lesson: aid was and is about politics o Who gets aid and what they get is politically based  Consider: the United States Agency for Development Aid (USAID) o Biggest bilateral aid organization in the world o Set up to organize the flow of aid from the USA to Vietnam before the end of the Vietnamese war (to fund the soldiers in the war)  April 2002: an attempted coup d’etat against Hugo Chavez in Venezuela. One million descend from the barrios in Caracas to support Chavez Office of Transition Initiatives  Enter USAID, which opens an 'Office of Transition Initiatives' (OTI) o From its web site: o 'The USAID Office of Transition Initiatives supports US foreign policy objectives by helping local partners advance peace and democracy in priority countries in crisis. Seizing critical windows of opportunity, OTI works on the ground to provide fast, flexible, short-term assistance targeted at key political transition and stabilization needs.'  Venezuela was a 'priority country' because it is the 2 biggest supplier of oil to the US  Who were to be the OTI 'partners'? o the managers of the country's oil industry o the owners of private television stations  The very people that had led the attempted coup d’etat  The 'partners' organize a manager's strike that almost brought the economy to its knees causing hardship to the poor of Venezuela  From 2002 – 2009 USAID spends US$11.6 million on 360 groups and projects under the program 'Venezuela: Initiatives for the Construction of Trust'  The vast majority of the organizations and groups were part of the anti-Chavez opposition o The US had been opposed to Chavez since the beginning of his “reign”  USAID has been at the forefront of US foreign policy since its inception (and implicated in numerous coups and interventions)  Other bilateral aid agencies often have an agenda the reflects the political priorities of the government of the day, and not development – including the Canadian International Development Agency (CIDA)  So it is not surprising that the biggest recipients of aid in 2008 were: o Iraq (US$10 billion) o Afghanistan (US$ 5 billion) o Ethiopia (US$3.3 billion)  Have forces in Somalia fighting Al-Qaida o Palestinian Territories (US$ 2.6 billion)  The components of the ‘architecture of aid’: o multilateral agencies (ie, the World Bank, IMF, the UN system [including UNDP, ILO, FAO, WHO], regional development banks, etc.)  African Development Bank, etc. o bilateral agencies (ie, USAID, CIDA, DfID, SIDA, JICA, DANIDA, etc.)  SIDA – Swedish International Development Agency – the best organization. Called “Swedish SIDA” to not be confused with the Canadian  Most developed countries have a bilateral aid agency o non-governmental organizations [NGOs] (ie, CARE, Christian Aid, Oxfam, Save the Children, World Vision, WaterAid, ActionAid, etc.) o This is the aid business 'food chain'  Important to note that aid is now a business  project aid o grants to build a dam  program aid o grants to undertake a set of projects such as an integrated rural development program o Things that are related… kind of thing?  technical assistance o grants to buy-in technical know-how in the building of the dam that the country does not have o If you want to build a bridge and don’t know how, you buy someone in. Can get projects done early and under budget  humanitarian aid o grants to combat famine or natural disasters  military aid o In some countries it is hard to see where the development aid ends and the military aid begins – the Dutch military in somewhere was paid for using the aid budget  Structures of development assistance o Projects o Programs o development sectors (i.e. water)  The Dutch target water because they know a lot about it since the country’s basically underwater. Mermaids, heck yea. The Swiss target mountains. o policies (i.e. grants to meet the social and economic costs of privatizing state companies)  Privatizing can bring aid o development approaches (i.e. PRSPs) The Characteristics of Aid 1. ‘the bulk of the world’s resources for development--money, ideas, information, and people-- flow through a small number of multilaterals: in particular, the World Bank, the UN, the EU, and the various regional development banks’ (Nolan, p. 36) o A heavy concentration on who is giving 2. ‘the policies of a bilateral agency usually reflect the particular political, social, or economic priorities of that country’ (p. 38) 3. there are extensive interconnections, varied in size, purpose and operation, within the ‘aid and development industry’ between multilaterals and bilaterals o Funding o Personnel  People circulate professionally through these organizations o exchange of information  The bi’s and the multi’s have certain information o collaboration on projects  Though the World Bank does sometimes fund sole projects, that is rare. They usually involve bilaterals 4. development assistance has often been based on forms of conditionality: o political cooperation/influence o 'tied aid' (ie Pergau)  Condition – if you want money for a dam, you buy fighter jets o policy reform and structural adjustment  The World Bank uses a neo-liberal approach – so if Canadian CIDA contributes 20% of the project, they are contributing to the approach Multilateral and Bilateral: Best Friends  Links between multilaterals and bilaterals mutually reinforce a neoliberal (‘small state’) approach to international development  But also: links between multilaterals/bilaterals and NGOs, which are seen as a better ‘delivery’ channel for aid, serves to reinforce neoliberalism as NGOs become dependent upon multilaterals/bilaterals o NGOs are seen to be closer to the ground and more efficient. o But the NGOs rely on the World Bank and bilateral organizations to fund their projects, which reinforces neo-liberalist approach o The Vietnam Development Report – not produced solely by the World Bank, but many bilateral agencies and NGOs.  The Bank becomes dependent on these smaller organizations for funds and something else that I missed cause Imma dummy.  ‘… there is an overall sense in which they are all part, in one way or another, of a common enterprise with a remarkably uniform approach to development planning and implementation’ (Nolan: 44) Aid Is…  ‘The fundamental idea of aid is a transfer of resources on concessional terms--on terms, that is, more generous or ‘softer’ than loans obtainable in the world’s capital markets.’  (Cassen, Robert & Associates (1986) ‘Introduction’ in Does Aid Work?: Report to an Intergovernmental Task Force, Oxford: Clarendon Press: 2)  ‘The words 'aid' and 'development assistance' refer to flows which qualify as Official Development Assistance (ODA) or Official Aid (OA).’ o OECD/DAC Glossary Grants vs Loans  What are these flows? 1. Grants—that is, gifts 2. Concessional loans—loans at less than international market interest rates, in cash or in credit o A lower interest rate than you would get from a bank and/or a longer repayment time (35 years instead of 5, etc.) o Official Development Finance (ODF)  all flows from developed country governments and multilateral agencies to the developing world o Official Development Assistance (ODA)  grants and concessional loans with at least 25% grant element made to Part
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