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The best and worst of international aid


Amartya Sen, Development as FreedomRumours are rife that the Government's projected aid budget increases will be cut in the forthcoming Federal Budget to ensure a surplus. Until now Australia had been on track to achieve its pledged aid target of 0.5 per cent of GNI by 2015, a pledge endorsed by Kevin Rudd, Julia Gillard and, presumably, current Foreign Minister Bob Carr, and which had also received rare bipartisan support from the Coalition.

Aid is not generally a vote winner. There are notable exceptions, such as in those Scandinavian nations where popular support for aid policies has seen them achieve an aid budget of over 0.7 per cent of GNI.

In Australia though aid is not popular, due largely to the many myths surrounding it; a heady mixture of racial prejudice, the afterglow of colonialism and the chipping away at the social justice agenda by neo-cons whose 'trickle down' economics from the rich to the poor was discredited long ago.

Horst Köhler, former head of the IMF, was asked when he was President of Germany if he regretted some of the IMF's policies, such as aggressive structural adjustment to force poor countries to cut social expenditure to pay back debts from loans given too easily by Western banks and governments. His reply was that they had pushed ahead with economic theories without taking into account the effect of those theories on people's lives. Quite.

Of course, some aid doesn't work. I was horrified as a young aid worker in the '80s being told that an open sewer in an Addis Ababa slum was a World Bank project. The 'donors' did not consult the local community, let alone allow them to participate in the design to bring sanitation to the slum. Never admitting failure when logistical difficulties arose, they returned to their hotels and no doubt the next 'aid' project.

That is the big lesson for successful aid projects — the participation of the local community is vital. They should not be the 'beneficiaries' but rather, in the words of Nobel-prize winning economist, Amartya Sen, should be the 'doers and judges' of any aid project.

One of the simplest and most successful aid projects I was involved in was with a group of women in Kenya. They had been abandoned by their husbands and had taken to prostitution to feed their children. Through Freirean methodologies, a local NGO organised them to discuss their problems and come to their own solutions.

With some seed money from the 'donor', they were able to buy land as a cooperative, grow crops and sell them in the markets — thus giving up their old habits — and to survive and prosper sustainably through efficient organisation and working together. One of them said: 'The best thing is I can hold my head up high in church.' Her dignity had been restored. That is key to aid being effective in the long term.

Aid is obviously not enough to eradicate dehumanising poverty, but it works if targeted (especially towards women), if owned by the people it was meant for, if there are adequate training components, if it doesn't encourage dependency, if it is channelled through local community-based organisations and if, in a world where violence simmers under the surface of many societies, it fosters peace.

It should, of course, be a genuine gift from the rich to the poor and not tied to purchasing Australia's goods and services. That's called 'trade'.

Unlike the mining industry, which can spend millions of dollars on advertising campaigns telling us not to tax them more (when it costs just $3 to immunise a child against preventable diseases), the poor of Oceania, Asia and Africa have no voice here other than that of Australian voters willing to make aid an election issue.

Good aid gets rid of poverty, gives people dignity, promotes sustainability and fosters peace. Not a bad return on investing 0.5 per cent of the gross national income in people's lives. Wayne Swan, please take note.

Duncan MacLarenDuncan MacLaren lectures in international development studies at Australian Catholic University and is a former Secretary General of Caritas Internationalis whose members aid about 24 million poor people a year. 

Topic tags: Duncan MacLaren, Aid, Caritas



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Existing comments

Great piece Duncan - and i wholeheartedly agree! important to emphasise to the public - and neither government nor NGOs have done this well - that aid doesnt always work and $41 a month wont solve poverty for one child or a community. long term development is about sustainable relationships and takes many years to implement.

tim | 17 April 2012  

I wouldn't be too quick to scoff at "trickle down" theories, if by that is meant free trade and free markets. International aid hasn't gone up to any significant degree in the last decade. Yet global poverty has nosedived. Here's a Brookings Institute (a liberal, not neocon, outfit) report of early last year: "We estimate that between 2005 and 2010, the total number of poor people around the world fell by nearly half a billion people to under 900 million in 2010. This means that the prime target of the Millennium Development Goals – to halve the rate of global poverty by 2015 from its 1990 level – was probably achieved around three years ago. Whereas it took 25 years to reduce poverty by half a billion people up to 2005, the same feat was likely achieved in the six years between then and now. Poverty reduction of this magnitude is unparalleled in history; never before have so many people been lifted out of poverty over such a brief period of time." We never heard this much in the MSM, did we? Why? Because it's largely due to those demonised forces of globalization and economic freedom that this wonderful process has occurred: not aid - or rather, government to government aid - the bad type, as Lord Peter Bauer taught us.

HH | 17 April 2012  

1. Polling has shown aid is actually not that much more popular in Scandinavia. 2. You say aid is unpopular in Australia because we are racist, colonialist neo-cons. Can I suggest that if more of our ODA was what you described (targeted, locally owned, not fostering dependency) instead of highly paid consultants, direct budgetary assistance, infrastructure, etc, then the reasonable Australian public might be more supportive. Additionally, for years AusAID has been secretive about what they do with our money, but thankfully this is improving. 3. HH is correct, free trade and free markets are much more important factors in addressing poverty, though NGO-land will never admit this because of their ideological prejudices. I suggest reading the House of Lords' report from last month, 'The Economic Impact and Effectiveness of Development Aid' which reaches this conclusion.

M Feldhof | 20 April 2012  

Duncan MacLaren's article makes a good case for aid through agencies which can work in the way he prescribes, as I suppose many aid NGOs do, and at their best the multilateral development banks and governments' bilateral agencies. But the case for rapid growth of official aid to the Australian Government's target level involves other factors which it's hard to get good information about. Reports by AusAID's Office of Development Effectiveness have cast some light on where Australia's bilateral aid has been effective in improving service delivery to the poorest, but also admits severe constraints in the cases where states are fragile or domestic conflicts are unresolved. The independent review of Australia's official aid (2010-11) recommended that further increases in aid be conditional on demonstration of its effectiveness - which in my view needs to be more systematic than it is now. The comments by HH emphasise the role of developing countries' policies towards markets and trade. Again, official aid can help influence those policies, and some recent Australian aid may have been effective on that front, but how reliable are the links from extra aid to better policies?

John Eyers | 02 May 2012  

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