<div class="MsoNormal" style="MARGIN: 0in 0in 0pt"><b style="mso-bidi-font-weight: normal"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"></font></span></b> </div>
<div class="MsoNormal" style="MARGIN: 0in 0in 0pt"><b style="mso-bidi-font-weight: normal"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">AN INDICTMENT OF FOREIGN AID: IS IT TOO LATE?</font></span></b></div>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt 2.5in"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">States do not have friends, only interests. (Charles de Gaulle)</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">1. As we have it now, foreign aid is instrumental in decreasing constructive social, economic, and political tensions and internal contradictions that would tend, sooner or later,<span style="mso-spacerun: yes"> </span>redress or resolve the growing imbalances and injustices of the prevailing internal exploitative system in many a recipient country.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">2. In the best of cases, donors give their aid in a well-intentioned, but nevertheless vain and futile attempt to mitigate or remedy this ongoing internal economic exploitation.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">3. In the worst of cases, as we all know, donors channel their aid through ruling national elites, most often fully aware of how these elites are instrumental in perpetuating this state of affairs: therefore, do the donors become accomplices in the process of exploitation?</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">4. Local governments channel their own development funds often to urban and more prestigious projects, resting assured that foreign aid will assume a sizable fraction of rural development costs for them.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">5. To top things off, foreign aid often attempts to impose Western (Northern) models of development, e.g. cash-crop support or large irrigation schemes, which carry not only the seeds of the further exploitation of those supposedly aided, but also the continuing enrichment of the ruling elites. </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">6. The difficult to take truth is that, if current type Western (Northern) foreign aid does not cease or is drastically reoriented, it will never achieve its stated aims and objectives - a fact that is already widely recognized, but for which all kinds of excuses are found. If donors do not begin to look at macro-economic parameters, their "good will" will be used facetiously to perpetuate the status quo. (Chances are strong that many of the donor countries would not mind being used in such a way, as long as their public image looks good to the rest of the world, especially to the other members of the club of donors).</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"><span style="mso-spacerun: yes"> </span></font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">7. Most countries face quite a number of problems in managing to absorb all the foreign aid efficiently and clearly lag behind in that task. The bottlenecks that explain this are related among other factors, to shortages of trained manpower, serious limitations in infrastructure, and a slow-paced bureaucracy.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">8. Instead of asking ourselves how much foreign aid poor people need, we must ask ourselves whether<span style="mso-spacerun: yes"> </span>Western (Northern) tax dollars are being used to shore up the economic and political power of a few who make the powerlessness of the many inevitable. Do these tax dollars go to regimes who sustain themselves in power by repression against the poor? Statistics cannot help us answer such questions. Only identifying with needless human suffering will.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">9. Foreign aid is rightly accused of many things: being based on a false logic: doing more harm than good; maintaining (and protecting) the status- quo in Third World countries; undermining food autonomy; being a political weapon of the rich countries; perpetuating underdevelopment.<span style="mso-spacerun: yes"> </span>There is no indication that policies regarding this aid <span style="mso-spacerun: yes"> </span>--both in donor and recipient countries-- are changing drastically despite mounting evidence for the above claims. </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">10. Short of a call for an overall discontinuation of all aid, foreign aid can play a role in fostering development, but not just any kind of aid. In this context, it is important to determine which kind of aid would be needed, for whom, and under what circumstances. </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">11. But foreign aid has its own politics. Simply denouncing its deleterious effects is not enough. Some political actions need to be taken.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">12. The mere thought that foreign aid can automatically bring mutual benefits is simply a political fiction. Moreover, the assumption that this aid can be neutral is as shaky as the now-discredited notion of a value-free education. Present day aid policy makers, therefore, have to be confronted with the pressing questions regarding the relevance of their own work. Development assistance cannot automatically be considered as well-suited to developing countries. In the international development community, it has actually gotten a rather bad image as a resource that has been poorly used. Mostly, the way it has been used is what has given it its bad reputation.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">13. The fact that most formulas for using aid moneys were actually developed to expedite rapid disposal with minimal financial and political costs has conditioned the current drawbacks that have been pointed out. The result is that there are serious deficiencies in the operation and theoretical foundation of Northern foreign aid projects. These projects are often not implemented as planned and ultimate impacts remain unrealized. </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">14. Aid is extremely vulnerable to political pressures and is an area in which ‘politics-literally-stands-directly-between-the-life-and-death-of-millions’. </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">15. Some seem to believe that without foreign aid, the present development crises would be even worse. If this view were correct, there would be no reason to alter present development strategies and one should simply spend a great deal more money on them. The basic problem, however, is that these present strategies do not adequately address the issue of Human Rights violations, the issue of redistribution of assets and income, the issue of income generation for the poor and of adequate expenditures for public services for the poor.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">16. Therefore, for alternative development strategies to become a cornerstone of genuine development (such as the Human Rights-based approach), policy cannot be usefully discussed outside a broader geo-political and socio-economic framework.<span style="mso-spacerun: yes"> </span>Much more far-reaching steps must be taken to avoid the catastrophic failures of the past.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">17. Moreover, the sad reality is that aid given with one hand as a soft loan is actually being taken away with the other. The debt trap in which many a developing country is caught makes it necessary to service the debt in hard currency, this directly undermining the whole idea of foreign aid.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">18. Another valid criticism voiced about aid is that it gets too involved in looking at improving the system's management, ignoring the need for the system’s drastic reform. Donor agencies somehow avoid raising the issues of structural changes, because of the conflict of interests this inherently raises for them. For many, aid is actually still coupled with a strong belief in the (discredited) trickle-down process despite the evidence that the actual value of the net transfers from most foreign-funded development projects is often less than 30% of the budgeted funds; a big proportion of it, donors spend at home in procuring goods and in expensive consultants (the latter often far removed from the realities in the South).</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">19. Further, there has also been a trend away from aid to the lower-income countries. The concentration of US aid on only a few countries, for example, shows that its objectives are strategic rather than humanitarian. But the US is not alone in this.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">20. On another political note, donors actually agree that aid can discourage local production, increase dependency, alter people’s habits, encourage corruption, and does not reach the more needy. Nevertheless, they contend that none of these problems need happen under ‘proper’ safeguards. They genuinely seem to believe that aid, when used for ‘strict’ developmental purposes, can be made to have none of the above drawbacks. How this is going to come about is seldom elaborated upon.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">21. In addition, the same aid often causes severe budgetary and logistic problems to the recipient countries since donors often pay for only some (or none) of the local recurrent costs.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">22. According to Susan George, the following postulates are generally true for most countries receiving foreign aid: </font></span></p>
<p class="Blockquote" style="MARGIN: 5pt 0.25in"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">- A strategy that benefits the least well-off groups will not be acceptable to the dominant groups unless their own interests are also substantially served. </font></span></p>
<p class="Blockquote" style="MARGIN: 5pt 0.25in"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">- A strategy that benefits only poor classes will be ignored, sabotaged, or otherwise suppressed by the powerful, insofar as possible. </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in; mso-list: l0 level1 lfo1; tab-stops: list .25in"><font face="Times New Roman"><span style="FONT-SIZE: 14pt"><span style="mso-list: Ignore">-<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-SIZE: 14pt">A strategy that serves the interests of elites, while doing positive harm to the poor, will still be put into practice and, if necessary, maintained by violence so long as no change occurs in the balance of social and political forces.</span></font></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">23. So, to be more effective, foreign aid should: </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt 0.5in"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">-generate a multiplier effect on the amount of resources allocated for other disparity-reduction programs in the recipient country; </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt 0.5in"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">-primarily meet the transitional needs and costs of such disparity-reduction policy adjustments, acting mainly as a catalyst; aid is good only when used as a vehicle of transition;</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt 0.5in"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">-in some way, help increase the bargaining power of the poor and the politically marginalized. For this to occur, peasants, workers and women must be helped to form or strengthen their own representative associations. </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">24. If a recipient government cannot agree to these basic conditions <span style="mso-spacerun: yes"> </span>--which will necessarily alter the internal balance of power-- <span style="mso-spacerun: yes"> </span>a simple syllogism would indicate that it would be better for the donor to withhold aid.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">25. But perhaps aid needs to be rethought and restructured, not necessarily withdrawn. Centering it around the human rights-based framework is an option rapidly gaining ground. That will require fostering the political and economic changes necessary in the recipient country to make it possible for aid to really make a difference. The risk is for the latter effort to become another area for the donors being (rightly or wrongly) accused of neo-colonial interference. </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">26. The real commitment to the eradication of Human Rights violations, such as hunger, malnutrition, ill-health plus all the other, implies a massive assault on the roots of underdevelopment and poverty<span style="mso-spacerun: yes"> </span>Foreign aid thus only adds false hopes to the prospects of poverty alleviation. At best, aid treats the symptoms of poverty, not its causes.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman">Anybody moved to react?</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><font face="Times New Roman">Claudio Schuftan, Ho Chi Minh City</font></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><a href="mailto:cschuftan@phmovement.org"><font face="Times New Roman" color="#0000ff">cschuftan@phmovement.org</font></a><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> <span style="mso-spacerun: yes"> </span></font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt"><span style="FONT-SIZE: 14pt"><font face="Times New Roman"> </font></span></p>