Or Reinforcing Inequality?
THIS MONTH'S THEME
Photo: Shahidul Alam / Drik
The sign proclaimed it loudly: ‘Under construction – the largest shopping mall in Asia’. Hyperbole, perhaps, though the sheer scale of the building work visible behind the sign suggested that something pretty grand was in the making. Yet I was standing not in Tokyo, not in Bangkok or Seoul, nor even in Delhi, but on Panthapath in Dhaka, the capital of Bangladesh.
How could developers have considered that there was sufficient scope for such an enterprise in Bangladesh? They might build the fanciest, glitziest and most well-stocked shops in the region but who would have the spare cash to spill into the tills? This, after all, is Bangladesh we’re talking about: a byword for ‘disaster and disease’ the world over ever since the most arrogant of all US Secretaries of State, Henry Kissinger, dubbed it an ‘international basket-case’ back in 1974. Such has been the effectiveness of this global image-mongering that if you say to Westerners that you are travelling to Bangladesh you will meet with at best a look of bemusement (‘why on earth would you go there?’) and at worst an expression of sympathy. Other countries come and go in the disaster stakes – then Somalia, now Sierra Leone – but Bangladesh’s grim reputation, it seems, remains secure.
Travel to Dhaka and you will certainly find poverty in abundance. You will also, needless to say, find a people rich in culture, kindness and courage. But you will also not have to look far to find evidence of just the kind of cash-awashness that the new retail palace is seeking to tap. Look up from streets abounding in people and rickshaws in some parts of Dhaka and you could almost believe you were in Southern California, so ubiquitous and gaudy is the display of neon advertising pushing everything from hi-tech electronics to designer clothes.
Yet Bangladesh remains one of the poorest, ‘least developed’ countries in the world, a major recipient of overseas aid. How do these things fit together?
Very well, unfortunately. For all its achievements, aid the world over has never even come close to eradicating poverty and barely even tries to reduce the gap between rich and poor. And Bangladesh, on the occasion of its 30th anniversary as an independent state, is an excellent place in which to consider how well or how badly overseas aid is working when looked at from the point of view of the people who have received it.
The nation of Bangladesh was born out of the devastation of genocide in 1971, as Pakistani forces clamped down savagely to prevent the country’s independence (see Bangladesh – a brief history). The aftermath of the liberation war and the major famine which followed hard on its heels provoked an outpouring of international sympathy – and a massive influx of foreign aid agencies.
Overseas aid is a many-headed animal but its dominant characteristics – its fashions and first principles – do change over time and it is fair to say that aid at the outset of the 1970s was a very different beast from that of today. It was a time of significant optimism when there was confidence that the newly independent countries in Africa and Asia would be able to make real headway if only they were given a helping hand. Bilateral (government-to-government) aid programmes had just been set up in earnest during the 1960s and there was widespread faith that technical help and infrastructural aid (dams and roads, for example, or the high-yielding seeds of the Green Revolution) would make all the difference.
Some time during the 1970s the penny dropped. Partly because of the shock of the oil crisis and the global recession it provoked, the assumption that ‘development’ in general would deliver the goods for all started to look pretty shaky. Aid policy-makers began0 to realize that they would need to pay special attention to the basic needs of the poor, which were manifestly not being satisfied.
In the 1980s the debt crisis into which developing countries had tumbled in the wake of recession meant that the leading edge of aid became financial or economic. The expanded Washington institutions, the World Bank and the International Monetary Fund (IMF), became the dominant forces, with their promises of debt relief or new loans conditional upon ‘structural adjustment’ of the local economy – a euphemism for rolling back the state. It took the whole of that decade and much of the next for the message to sink in that removing government subsidies and forcing cuts in social spending on health and education was having an absolutely disastrous effect on the lives of the poor. The IMF, in particular, still seems fairly impervious to the message, even at the outset of the 21st century.
In the 1990s the aid machine changed gear yet again. It was the end of the Cold War and the former Communist countries were suddenly transformed into aid recipients rather than donors. But the greater number of countries requiring aid found themselves competing for a fast-shrinking pot, not least because part of the motivation for Western development aid had always been to reward and reinforce allies in the fight against global communism. Taking the Western countries that give aid as a group, the percentage of gross national product devoted to aid has more or less halved over the last three decades. It has shrunk from 0.38 per cent in 1982 to just 0.22 per cent in 1997.1
This is partly because faith in the efficacy of aid has become the exception rather than the rule. There have been too many bad aid projects, too much money wasted, for anyone to retain the bushy-tailed enthusiasm of the 1960s. Governments in the South have too often used aid inefficiently or corruptly, often with the connivance of corporations or donors, and have furthered the interests of urban élites rather than the rural poor. Those in the North, meanwhile, have been increasingly critical of poor countries’ performance, insisting on ‘good governance’ where before they would only have been concerned about staunchly anti-communist credentials.
As a result, arguably the key development during the 1990s has been the increasing reliance on non-governmental organizations (NGOs) to deliver aid. This is still a relatively small proportion of the total but it has increased enormously over the last decade – and so, as a result, has the number of NGOs, which have multiplied all over the South.
All of these worldwide trends in aid policy and practice have been mirrored in Bangladesh, from the early emphasis on technocratic, big-budget projects through the dictatorship of the IMF to the modern faith in NGOs. But what has the net result of all this endeavour been? Is Bangladesh a better place than it would have been as a consequence of all the aid pumped into it?
The answer, inevitably, is much more complex than a simple yes or no – and would be so in any country in the world. What is incontrovertible is that hundreds of thousands more people are alive in Bangladesh today than would have been had there been no aid. Disaster relief, radical improvements in child health and nutrition, immunization: broad-brush developments like these, many of them funded by aid from Western governments or UN agencies, have had a huge and lasting impact on everyday life.
There have been significant success stories, too. The situation of women in Bangladesh, for example, could be broadly said to have improved as a consequence of aid policies. Until the mid-1980s official aid the world over almost always bypassed women and their interests. But from the Nairobi UN Women’s Conference in 1985 onwards most donors have recognized this imbalance and tried to channel more resources directly towards women and their needs (gender units of one sort or another have abounded). Some of this has been rhetoric and some real. The shift in population policy has been particularly marked, and signalled in the trendy terms of each period: ‘population control’ (including, at the extreme, forced sterilizations and damaging injectable contraceptives) gave way to ‘family planning’ which in turn was succeeded after the Cairo UN Conference in 1994 by ‘reproductive rights’ and ‘women’s empowerment’.
Again, the situation in Bangladesh has reflected the international trends. The family-planning programme during the 1970s and 1980s was often coercive, with many cases of forced sterilization – though it was equally true that some women went secretly to camps to be sterilized, seeing this as a liberation from their mothers’ lot of annual childbirth. In the 1990s the Government has taken a more sensitive, ‘woman-friendly’ approach to reproductive health. And in general development has provided women with significant opportunities for empowerment. As local women’s rights activist Nasreen Huq recalls, women’s participation in the national liberation movement opened doors for them when it came to putting development into practice, particularly in the field of health. ‘Women received hands-on training as paramedics and became the barefoot doctors of Bangladesh – in the early 1970s seeing these women on bicycles in rural areas was indeed revolutionary. Later thousands of women in all corners of Bangladesh found employment in family-planning programmes or as health workers teaching villagers about oral rehydration in the event of diarrhoea. Thus development unleashed women’s energy, broke the taboos involved in the traditional culture of seclusion and produced role models for the generations to come.’2
The South Asia Human Development Report has attributed the country’s relatively low population-growth rate to women’s empowerment.
The overall balance sheet on aid in Bangladesh does not, however, look nearly so positive. After years of talk about ‘poverty reduction’ – particularly since the World Bank’s report on poverty in 1990 and the UN Poverty Summit in 1993 – the gap between rich and poor becomes wider with every passing year. Normally the gap between rich and poor widens almost imperceptibly and can only be measured over decades. In Bangladesh, however, the growth in the incomes of the rich has been stratospheric. Five years ago the richest five per cent of people earned 18 times more than the poorest five per cent; now the rich earn 30 times more3 (Shahidul Alam examines life at both top and bottom in When dollars swim freely).
But does this say anything more damning about aid than that its anti-poverty drives have proved ineffective? A key study of aid effectiveness in Bangladesh has indicated that despite a ‘modest growth in per-capita output’, ‘income distribution has become more unequal; poverty, landlessness, and unemployment have increased’.4
The key point is that it is virtually impossible for aid to be a neutral force. If it is funnelled into a society presided over by a government which does not actively protect the rights of the poor, aid will unquestionably increase rather than diminish inequality. The more money there is around, the more will migrate into the pockets of those with economic, social and political power.
This happens wherever the unadulterated free market is allowed to work its ‘magic’ but where there is widespread corruption it works a lot faster. And in Bangladesh, sad to say, corruption is now a cancerous fact of life. This is actually quite a recent development: corruption became both endemic and institutionalized in Bangladesh during the 1980s under the dictatorial rule of General Ershad. Now virtually every public-service job, from teaching to taxing, must be bought in the first place – and is itself used as a source of kickbacks for services rendered. Wheels do not turn without a spot of grease – and the largest dollops of grease are dispensed in the service of Western commerce, particularly transnational gas and oil corporations (see Guess who’s coming to dinner).
Even aid ‘success stories’ often do not bear close scrutiny. The World Bank, for example, has strongly promoted shrimp farming for export in the south-east of the country and the Sunderbans – and has trumpeted its own achievement in thereby boosting overall foreign-exchange receipts. But look beyond the financial bottom line to the human and environmental dimension and the picture looks very different. Shrimp farming is a disaster for the environment: it involves destroying the fertility of the earth by inundating it with salty water. And while it can be a significant income opportunity for a local farmer, more often than not it is the urban exporter or the large farmer who benefits, using labour imported from outside so as to undermine collective local protest at pay or working conditions. Neither the World Bank nor the Government have made a significant effort ‘to ensure farming is done in a scientific and planned manner to reduce its negative impact on the environment and local livelihoods’.5
The more questions that are asked about the effects and achievements of official aid, the more attractive becomes the option of distributing aid via NGOs – and particularly ones that are indigenous in origin rather than Western-based charities. Bangladeshi NGOs are arguably more celebrated (and financially supported) than those of any other country. They have spread like wildfire over the last decade-and-a-half: there were 848 registered in 1997, compared with only 45 in 1981. It was recently estimated that NGOs operate in nearly 80 per cent of all Bangladeshi villages.6
These organizations tend to arise in the first place because they are needed – and because official aid or government provision is inadequate. They are almost entirely staffed by Bangladeshis; they are generally much more able to understand what is needed at village or slum level and to be able accurately to interpret the local cultural context. Their achievements can be remarkable – the idea of microcredit (lending small amounts of money to the poor without collateral), which has been adopted by aid agencies the world over, was pioneered by Bangladeshi NGOs.
In Bangladesh, though, the enthusiastic routing of aid money into these local ‘success stories’ has meant that organizations such as BRAC (Bangladesh Rural Advancement Committee), the Grameen Bank and Proshika have become very large very quickly (see Local heroes). Size is not a problem in and of itself but it does endanger the very thing which made them valuable in the first place – their closeness to and understanding of grassroots need. Dependence on foreign-aid funds also means there is a danger that NGOs will find themselves more accountable to Western donors than to the local people they were set up to serve.
The answer for Grameen or Proshika, as for aid agencies of all shapes and sizes, is eternal vigilance. Aid is a desperately difficult arena, one fraught with the potential for cultural misunderstandings and political hijackings. The most effective aid agencies are always those which are most responsive to local need – and those which in terms of their own organization are both open to public scrutiny and endlessly self-critical. Aid agencies can never be given a permanent licence as ‘good guys’: every day they have to earn the right to respect through the quality and responsiveness of their work.
This is the very least that Bangladeshis – indeed the poor the world over – have a right to expect.
1 Peter Hjertholm and Howard White, ‘Foreign aid in historical perspective’, in Foreign Aid and Development, edited by Finn Tarp, Routledge 2000.