New Internationalist

New Internationalist Issue 285

Issue 285

[image, unknown] New Internationalist Issue 285


The poverty of aid

[image, unknown]
'Official development assistance' - aid - is being cut to ribbons and may not survive at all. David Ransom reports on the causes and the consequences of an unnatural disaster.

Image: © Vlado Palankov

The first thing we have to do is take off as many clothes as our self-esteem permits. Carrying them over our heads we wade through a murky river. We get dressed again and walk for several hours along a sandy track, beneath a burning sun and cotton clouds, through tangled scrub where snakes glide and butterflies hover like floating flowers. From time to time we skirt great ponds of water the colour of tea, fringed by the charred skeletons of tall trees, the ruined architecture of the Brazilian rainforest.

The path broadens into a clearing and a settlement. A veil of woodsmoke hangs over palm-thatched huts. Pigs and chickens scamper across the bare earth. Around the settlement are cultivated fields and tall plantations of babassu oil palms. Slowly people emerge from the deep shade of their homes to greet us. A life of extreme frugality gives to them a kind of grace possessed only by those who are left with little else. So little that I cannot see anything of value that remains to be taken from them.

Gunmen come here nonetheless, trying to evict them from the land they have salvaged from the wreckage of the rainforest. The gunmen are sent by someone far away (former President Sarney of Brazil) who is not to be trifled with, laying claim as he does to feudal estates the size of a small country, and knowing as he must that the price of ownership is constant vigilance.

As we are shown around the settlement - named 'The Criminal' for reasons no-one is quite sure of - it is obvious how much is missing. There is one hut for a 'school' but there are no teachers or books; another for a 'clinic' but no doctors or medicines. There is oil from the babassu but only the most laborious means of getting it to market, on foot along the path we followed and then another 20 kilometres along the side of a road to the nearest small town. With us are people who have come to see what, if any, aid can be offered them. The urge to help is overwhelming.

Eventually, 'the criminals' - as they call themselves with bitter irony - gather to bid us farewell. Some of them huddle round a portable radio. They are listening to the BBC World Service in Portuguese - it is, they say, the only radio station they are able to find. The date is 16 January 1991 and the bombs have just begun to fall on Iraq: the Gulf War is underway. Marinilza, a young woman, turns to us and - only partly in jest - says:

What I saw was her poverty - what she saw was the poverty of the aid we were able to offer

'The best thing you could do to help us, you know, would be to drop those bombs on the fazendeiros, the landowners of Brazil, not the poor people of Iraq. The real crime is for this land to be wasted. All we need is for the gunmen to go away. We want to be left in peace. Then we could solve our own problems.'

Unsure of what I can do to stop the gunmen or the Gulf War, I am at a loss for words.

'Never mind,' she continues with a smile. 'At least you have listened to us. Maybe you will understand. That is the most important thing.'

And I know she is right. Her poverty would not exist - at least not in its present form - were it not for the gunmen. Poverty itself might not exist if poor people were not treated in this way.

How can 'aid' change that? What I saw was her poverty. What she saw was the poverty of the aid we were able to offer - its inability to tackle the root causes of her anger and bring about permanent change for the better.

There was a time when aid - in large quantities and specifically targeted - did make a difference. For 40 years after World War Two, 'official development assistance' (ODA) formed part of an international regime that, by extension from the post-War reconstruction of Europe to the world at large, saw the global levels of infant mortality, life expectancy, literacy, almost every measurable index of human well-being, improve slowly but surely.

But in the countries of the South, the poverty of aid soon became apparent. The devastation left by colonialism was of a different order altogether from the legacy of war in the North. There were so few traces left of what had been destroyed, so little understanding of what it would look like if it were restored. All the models were made in the North.
Indigenous people from the Nilgiris Hills of south India, where adjustment policies have forced farmers to turn away from food crops towards flowers for export. Photo by Vanessa Baird.
Much of the poverty in these countries was - and still is - absolute poverty. This means the absence of 'basic needs' like food, drinking water, shelter, education or healthcare. Both absolute and relative poverty (the gap between rich and poor) have been increasing everywhere, North and South, for the past 15 years. Between 1965 and 1980, 200 million people saw their incomes fall. In the years between 1980 and 1993 the figure rose to more than a billion. The people of Ghana, Haiti, Liberia, Nicaragua, Rwanda, Sudan, Venezuela, Zaire and Zambia are poorer now than they were in 1960. In sub-Saharan Africa enrolments in primary education have fallen by as much as half.1 Diseases of poverty like tuberculosis and malaria, once thought 'conquered', are returning to haunt us with renewed vigour. In Mexico, tortillas are turning green - the colour of a dye applied to animal feed to prevent its use for human consumption.2

Meanwhile 'official development assistance' - aid - from rich to poor governments has fallen for the fifth year in succession, and in 1995 reached its lowest level ever.3 So low, in fact, that serious questions are now being asked about whether it can, or should, survive at all.

Charitable endeavour isn't faring much better. Everywhere foreign-aid agencies are in crisis, finding it harder and harder to raise funds. Anxious aid workers catch themselves fighting back the surreptitious desire for the next big disaster to come as quickly as possible and fill up their collecting tins once more. The total cash they raise is, in any event, less than a tenth of official aid. And most of these agencies get a large chunk of their funds from official aid anyway.4

It might be supposed that the increase in poverty is a direct result of the drop in aid. So, the argument goes, increase aid and poverty will decrease. Unfortunately it doesn't work this way. Less than a quarter of the $59 billion ODA total ever reaches poor people - equivalent to about eight US dollars per head per year.5 ODA is siphoned off to remote 'development' objectives and mega-projects, 'tied' to purchases from donor countries or paid in 'debt relief' straight to Northern banks. Most poor people never get to see a single cent of it. And the changes that are being made to aid are making the problem worse rather than better. In this, the UN International Year for the Eradication of Poverty, the meagre public provision of education and healthcare upon which poor people depended in Latin America is being replaced by even more meagre 'Social Investment Funds', often financed by foreign aid and charging fees for services that are scattered more or less at random, wherever political patronage or the threat of social unrest dictate.6

Less than a quarter of the $59 billion ODA total ever reaches poor people - equivalent to about eight US dollars per head per year.

The final and possibly fatal folly is that the remains of ODA have now been 'tied' in their entirety to 'structural adjustment programmes' (SAPs). SAPs require privatization, cuts in public expenditure, increases in exports and absolute adherence to the principles of 'free' markets and 'free' trade. These principles are, by definition, indifferent to the eradication of poverty: they are largely responsible for its creation. So, for good measure, 'good governance' has been added to the lengthening list of aid 'conditionalities' to ensure that they are properly enforced. Not only do poor people get less money, they have to spend more time and effort explaining why they need it - as if it weren't obvious in the first place.

One may question the morality of using aid to blackmail people thought to be powerless. One may question the sanity of public institutions like the World Bank and the foreign-aid 'business' promoting private enterprise. But what is truly alarming is that SAPs don't actually work. In fact, they're threatening to become the world's worst-ever unnatural disaster.

The whole sorry saga began as it meant to go on, with a 'crisis'. In 1982 Mexico threatened to default on its debts. It was not the only 'Third World' country in a similar position. For a time a financial fiasco threatened to engulf the world's private banks, whose foolish but hitherto lucrative loans had created the problem. The US Government panicked and cobbled together a 'Brady Plan' that imposed the first major SAPs on Mexico as a condition for rescheduling the debts.

The crisis seemed to pass. Real wages in Mexico halved overnight because the Mexican people were having to pay for the debts, but billionaires sprouted like beanstalks. Mexico was being hailed as a shining model of what 'adjustment' could do. By 1994 it was, apparently, ready to move at long last from South to North and join the US and Canada in the North American Free Trade Agreement.

But then, whoopsy daisy! Within a few months came another 'crisis', and the world's financial system faced melt-down once more. So another quick fix was arranged with public funds: in fact, $38 billion in all from the US Government, in exchange for another round of SAPs and the gift of assets like the Mexican oil industry. With a few months of this deal, the number of Mexicans living on five US dollars a day (the local 'poverty line') or less had doubled, from 40 to 80 per cent of the population. 'It is not a package to aid the Mexican people,' comments Carlos Heredia of Equipo Pueblo, 'nor the Mexican economy. It's a package to bolster the failing policies implemented in our country for the last 15 years, and to prop up the regime.'7

By a poignant coincidence, that $38 billion - considerably less than is still spent on tobacco every year in the US - would have amply funded the $34 billion that is needed to provide safe water, sanitation, primary education, healthcare and family planning to all of the world's poorest people.8

So is official aid worth saving at all? For the majority of the world's poor people in the South, the answer is 'probably not'

What, then, is to be done? Well, since SAPs-style 'development' and the eradication of poverty are now mutually exclusive, a choice has to be made. If aid is to survive it must be made to adhere to the humanitarian principles - with the eradication of poverty as its principal objective - that are the only possible justification for its continued existence. That has to be the democratic task and responsibility of the people of the North.

The fatal flaw in ODA is that, by hitching up to SAPs, it has become breathtakingly prescriptive and actively anti-democratic. Such evidence as we have suggests, on the other hand, that the greatest 'impact' on poverty is made by poor people themselves confronting the 'deep structures', the inequities of ownership, economic power and human rights, that lie behind it.9. This makes poverty a political issue. And during the past 15 years one of the most positive things to have happened in the South is the flowering of popular movements everywhere to tackle these 'deep structures'.

During the 1980s and 1990s there has been an astonishing growth of such movements in the South, many of them supported in a modest way by their Northern counterparts. Nobody knows exactly how many of them there now are. The number registered with the Government of Nepal rose from 220 in 1990 to 1,210 in 1993; in Bolivia from around 100 in 1980 to 530 in 1992; in Tunisia from 1,886 in 1988 to 5,186 in 1991.10

The best of them have played a crucial part in widening the democratic 'space' available to the people of the South. They have ventured into difficult and dangerous 'political' territory. 'There is a deep, burning anger,' says Mari Marcel Thekaekara of her experience in rural India. 'Illiterate farmers know that poverty cannot be eradicated by aid which cripples. They have perceived the inherent threat. They have started to get angry and to act.' Popular movements have begun to make the one 'adjustment' that counts - to the 'deep structures' of poverty. We have a unique opportunity to support them. The least they deserve is solidarity from the rest of us. The next chance to show it will be at the World Food Summit in Rome between 13 and 17 November.

As Svante Sandberg of Forum Syd (a co-ordinating group) in Sweden suggests, there are mutual benefits to be gained from solidarity. 'Swedish popular movements are in need - in some cases rather a drastic one - of renewal,' he says. 'They are looking to external examples. And this time they find their sister organizations in the South offering new ideas. After all these years, it seems that the learning process is finally getting through from South to North. Thanks to a crisis of identity for the Swedish movements, there is a possibility of something rare in the history of development co-operation: real reciprocity, an interchange between organizations and people in the North and the South.'11

Official aid as it stands does nothing to support this 'interchange'. So, is it worth saving at all? For the majority of the world's poor people in the South, who have never seen any evidence that it exists, the answer is probably not.

But then, it is impossible to live unaided. We come to each other's aid because we cannot help ourselves - because disasters keep happening and because we also drop bombs on each other. And, interestingly enough, the countries who give the most aid - Denmark, Sweden, Norway, the Netherlands - are also those who treat their own citizens best.

Who knows, maybe one day I'll be stripping down again and heading off in search of Marinilza, and by this time the gunmen will have disappeared, the bombs will have stopped falling on Iraq and we'll both be able to look back without anger. Until then Marinilza and her people - along with countless others the world over - are getting on with their lives themselves.

1. Human Development Report 1996, UNDP, OUP.
2. John Ross, Bloodshed after protesting health workers shed their blood, GN34514, Gemini News Service, London.
3. OECD News Release, 11 June 1996: provisional figures only.
4. NGOs and official donors, ODI Briefing Paper 1995(4), London.
5. Personal communication with Sir Hans Singer, University of Sussex.
6. Report on the Americas, NACLA, May/June 1995.
7. Personal communication with Carlos Heredia in Tampico, Mexico.
8. The Reality of Aid 1996, Earthscan, London.
9. Roger Riddell, Anthony Bebbington, Lennart Peck, Promoting development by proxy: the development impact of government support to Swedish NGOs, ODI monograph, London 1995.
10.Michael Edwards and David Hulme (eds), Beyond the Magic Bullet, Earthscan, London, 1995.
11.Paper prepared for New Internationalist.

©Copyright: New Internationalist 1996 [image, unknown] NI Home Page[image, unknown] Issue 285 Contents


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