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Saturday, April 20, 2013

Discuss some of the key factor that has been responsible for the non realization of socio economic development through foreign aid.

There are a wide array of literature on the ineffectiveness and terrible side of foreign aid by rich nations, International Aid agencies and private donors through philanthropy. There are many myths, fable and fairy tale prevails all over the world on the fact of foreign aid by wealthy countries and donor agencies such as International Monetary Fund and World Bank. The fact of the matter is that for about years countries from Africa, Asia and Latin America has received foreign aid for realization of socio-economic goals and restructuring and building the devastated economy and society overtime by such aid. But an enquiry in to the state of the matter reveals an entirely intriguing and disturbing trend of our time. That foreign aid is a myth affable and fairy tale. Or put in other way new form of imperialism at the altar of philanthropy.
Aid is money, projects, food, medical care, programmes etc which is specified to help countries in difficult situations. In fact there are three main forms of aid; emergency, humanitarian, and economic, aid. Reports reveal that aid money contributes up to 40 per cent of most African countries national budgets and it also goes on to say that African has received over 500 billion dollars in economic aid for the past few decades (Sikombe March 13, 2013).
The Zambian writer Dambisa Moyo argues a different story about foreign aid. In her Website[i] she unflinchingly writer with credible statistics and ample evidence and

says in the past fifty years, more than $1 trillion in development-related aid has been transferred from rich countries to Africa.
Her major contention is that if actually all this donations and aid fund has creatively trickle down in African empowerment and social engineering. Has this assistance improved the lives of Africans? And obviously like a visionary she opines that No. In fact, across the continent, the recipients of this foreign aid are not better off as a result of it, but worse very much worse than ever before.
In Dead Aid, Dambisa Moyo describes the state of postwar development policies in Africa today and audaciously confronts one of the greatest myths of our time that has almost become like a folklore that billions of dollars in aid sent from wealthy countries to developing African nations has helped to reduce poverty and increase growth and African society has largely benefited from this aid projects.
In fact, Moyo observes that poverty levels continue to escalate and growth rates have steadily declined and millions continue to suffer the problem of famine, poverty, diseases. Provocatively drawing a sharp contrast between African countries that have rejected the aid route and prospered and others that have become aid-dependent and seen poverty increase, Moyo illuminates the way in which overreliance on aid has trapped developing nations in a vicious circle of aid dependency, corruption, market distortion, and further poverty, leaving them with nothing but the “need” for more[ii].
Prominent critics of foreign aid are scholars like William Easterly and Dambasia Moy and they recite many of the studies that highlight the terrible side of foreign aid in developing areas of the world. For instances, Easterly and others attribute a good share of failure side of aid is lack of feedback and accountability. Obviously the fact is clear when Easterly (2006:17) says “The needs of the poor don’t get met because the poor have little political power with which to make their needs known and they cannot hold anyone accountable to meet those needs”.
Moreover, study by many scholars suggest strongly the point that lack mechanism for getting feedback from recipients about foreign aid benefits is a major problem for foreign aid in African countries for which aid programmes are failure. But criticisms of aid seem to assume that in the absence of foreign funds- local governments would do a good or even better job helping the poor. On the other hand; in rich democratic countries the poor have a very hard time getting their voice heard by their own governments and it is proved by studies by Bartels (2008) and Gilens (2012) more exactly.
Moyo points out that aid has not efficiently promoted economic growth in Africa that is  over one trillion dollars has been pumped into Africa over the past 60 years and there is little to show for the achievement it brought about. In fact, according to Moyo, aid is malignant; it is the problem and has to be done some other way. The major contention of Moyo is that a direct consequence of aid driven interventions has been a dramatic plunge into poverty, citing Zambia as an example and the fact that when aid flows were at their peak between 1970 and 1998 –she says poverty in Africa rose to a confounding 66 per cent[iii].
More visibly it said that foreign and corruption has had a close connection and both stimulate each other. Moyo provided enough examples for this co-relation between corruption and foreign aid in her book Dead Aid (2009) where citing the classic dictatorship in some of African countries she said 2 per cent of World bank aid fund is misused. She categorically admits that aid is one of the greatest aides to corruption[iv].
More dramatically aid has more problematic in respect of creating a vibrant civil society in Africa. For instances, the governments in Africa are more interested in thickening their own pockets instead of providing safety valves of entrepreneurships and business thereby sustaining a vibrant middle class that can act as “critical moss”  for the responsible  development of Africa.
Further more foreign aid has created more problems in respect of social capital and its sustenance. The aid dependent environment in Africa has furthered the social capital in troublesome. There is no need for trusting each other and no need for neighbours trusting each other. The reason is that foreign aid weakens social capital by discomforting accountability mechanisms, it also is encouraging rent-seeking behaviour, apparently draw off scarce talent from employment positions and removing pressures to reform inefficient policies and institutions as such social capital and we feeling has been cut off.
One visible connection foreign aid ha in making African trouble is that its close affiliates with conflicts there in. Moyo points out that there are three fundamental truths about conflicts todayin Africa. They are mostly born out of competition for control of resources from both internal abd external, apparently they are mostly a feature of poorer economies in fact Africa in particular; and they are increasingly internal conflicts of the social dynamics of several factors.
In that sense it is apt to say that foreign aid furthers conflict. The prospect of grabbing hold of power and gaining access to unlimited aid wealth is irresistible and a pass port to Africa’s rich natural resources.
Further more, foreign aid in fact leads to economic limitations. This means that aid in route created more economic troubles than economic benefits. It is that aid leads to poor savings and poor investment. Aid can lead to inflation and aid can in effect choke off export sector. Aid leads to bottlenecks due to low absorption capacity[v].
The aid driven solution to Africa’s development programmes has resulted in what may be called aid dependency. This means aid makes Africa lazier, low tax revenues, inefficient public sectors, and it further leds to western donors playing the cards. Thus Africa can be viewed as depleted by foreign aid instead of bolstering its economy and society.
All through history foreign aid has definite political purpose and grand strategy to achieve certain desired ends in world politics. For instance, the western world came to know about the prospect of foreign aid only after World War I. The defeated Germany took no help from any one to rebuild its devastated economy from shambles. So in an unstable political climate Nazism grew in Germany and later the World ended in World War II. To stop repeat of history American began to pump foreign aid to Europe in a view to prevail the spred of communism modeled on the basis on Germany. Through out cold war time USA continued to pump foreign aid to prevent soviet communism from spreading. In short, The United States[vi] divides foreign aid into three categories- military and security assistance (25% of yearly expenditures); disaster and humanitarian relief (15%) and economic development assistance (60%). It is obvious that for many wealthy western countries foreign aid is not a charity but it is political tool. It is better to call foreign aid as war by other means.
In the meantime, aid has not freed and liberated Africa from what Jeffrey Sachs calls the “poverty trap” but has only imprisoned it in what the book titled dead Aid by author Moyo dubs as “the vicious cycle of aid.”  In her analysis; aid is depicted as a kind of corrupting agent- a parasitic contagion[vii]
In most aid dependent African countries, a lasting and all-encompassing negotiation process has developed over almost all policies-programs and projects between donors and government. Subsequently, this puts an immense burden on African administrative systems and leads governments to spend most of their time responding to donor initiatives, trying to work their own priorities in or waiting until implementation to steer the policy or project towards their preferences (Renzio, et al., 2007:3).
In fact, Fragmented aid management structures led to weakened domestic policy-making and budgeting processes, apparently leaving recipient governments in a weak position to coordinate aid according to a national development strategy ( Renzio, et al.,2007:3).
In addition, the dependence of African governments on aid: as a way to increase their budgets, and to deliver goods and services or other political promises they have made to their populations; makes these governments unwilling to take stronger policy positions or chart a development strategy outside of the purview of donors ( Renzio, et al., 2007:3).
The fragile domestic political support of governments, eqully combined with their dependence on aid to shore up their political legitimacy; provides strong incentives for governments to remain in a subordinate position to donors. Simultaneously, the conditions of permanent and pervasive negotiation and of institutional entanglement and aid fragmentation create strong disincentives for politicians and civil servants to alter the terms on which aid is offered to meet their own priorities ( Renzio, et al., 2007:3).
Apparently, of all the aspects of international politics nothing has provoked more disagreement than foreign aid in debates on international politics. It has been a much battered technique to put forth influence in international politics. Meanwhile it has paid great dividends altogether. Again it goes in waste for no purposes. Whether it may go in waste or not, it does have its impact at least upon the recipient nations with out any doubt. Therefore, there is as such a great controversy about the role of foreign aid in international politics in short. In fact, politically, the phrase is a surrogate word of Imperialism and is therefore, looked upon by the non-aligned nationalities and third word in general as an expression of neo-Colonialism.
Despite there are having many arguments for and against as well many skeptics and pessimists associated with foreign aid, foreign aid is always presented with a double edged weapon. Always donor countries will have a cutting edge advantage over those who receive the aid. Always the recipient country is at the receiving end and they are probably to lose. Moderately there is the view that, the aid from a capitalist western country is more disadvantageous and harmful in terms of consequences and the penalty associated. By many studies, it is seen that the recipient finds it hard and unbreakable to come out of the clutches and command of the Western donor.
There are a plenty of scholarship and academic literatures on foreign aid but are dominated by white men and western scholarship. Obviously; there are need for relooking at foreign aid with more deep rooted study and analytics. There are much internal political impacts in the foreign aid programme but require further study with southern perspectives.
Foreign aid is welcoming but there should be some reformed strategy to deal with the aid programmes. Aid can bring harm than benefit if not utilized properly. The fact is that Africa, Latin America and Asia can have far reaching consequences due to foreign aid. In mist cases these part of the world are unable to make use of the real potential of aid to divert to realization of soico-ecinimic development because loads of factors affect and hamper it. It is better to quit out of aid dependent economy to a more self reliant economy with the development and sustenance of social capital, civil society and critical middle class.
Nevertheless, aid agencies smother a negative and depressing portrait of Africa to the world and following of this pessimistic hype about Africa, people believe of Africa as a place filled with starving children, uncivilized and nomadic people, poverty stricken people, unemployed where AIDS is just as common as the average flu and violent generation. On account of this unconstructive exposure to outside world, investors tend to shy away from investing their money in a continent that is depicted in such a way as unfriendly and inimical.


[ii] Ibid
[iii] See cited in A summary and criticism of Dambisa Moyo’s assertions in Dead Aid, (http://realsociology.edublogs.org/2012/03/04/a-summary-and-criticism-of-dambisa-moyos-assertions-in-dead-aid/) accessed on 13-03-2013.
[iv] Ibid.
[v] Ibid.
[vi] Steve Jones, How US Foreign Aid is Used in Foreign Policy: A Policy Tool Since 1946, (http://usforeignpolicy.about.com/od/foreignaid/a/How-The-U-S-Uses-Foreign-Aid-As-Foreign-Policy.htm) accessed on 13-03-2013.
[vii] Cited by  Paul Nadal, May 11, 2011,  Foreign Aid as Contagion: On Dambisa Moyo’s Dead Aid,  (http://belate.wordpress.com/2011/05/11/review-summary-dambisa-moyo-dead-aid-2009/) accessed on 13-03-2013.


Bartels, L. M. (2008). Unequal democracy : the political economy of the new gilded age. New York Princeton, Russell Sage Foundation; Princeton University Press.

Easterly, William. 2006. The White Man’s Burden. NY: Penguin Press.

Gilens, Martin. 2012. Affluence and Influence: Economic Inequality and Political Power in America. Princeton University Press and Russell Sage.

Paolo de Renzio, Lindsay Whitfield, and Isaline Bergamaschi, 2007,Reforming Foreign Aid Practices: What country ownership is and what donors can do to support it, Global Economic Governance Programme, BRIEFING PAPER, (http://www.globaleconomicgovernance.org/wpcontent/uploads/Reforming%20Aid%20Practices,%20final.pdf) accessed on 13-03-2013.

Aaron Sikombe March 13, 2013, Is Aid Helping or killing Africa? TUMFWEKO, (http://tumfweko.com/2012/04/30/is-aid-helping-or-killing-africa/) accessed on 13-03-2013.

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