Is international aid effective?

Although International aid rapidly increased from the 1980s onwards, its origins can be traced back to just after the Second World War, when the Marshall Plan (1947) was first introduced. A US initiative, comprising of $13 billion (around $130 billion today),the Marshall Plan aimed to improve Europe’s economic performance through boosting trade and the production of goods, and later was implemented in other parts of the developing world, due to its success in Europe, where GNP was at an all time high. This today has been the basis for all international aid, the aim of improving stability and increasing peace and prosperity in other nations to ensure security. However, international aid has sparked an ongoing debate with two antithetical positions towards it. On the one hand, many believe that foreign aid has led to more prosperous lives in LEDCs and has improve social welfare, whereas others disagree and believe it creates a dependency culture and creates a cycle of poverty. Thus, the issue of international aid has never been easy to resolve.

International aid bridges the rich poor divide. It has been argued that MEDCs in the North have been exploiting the poor located in the developing South, both historically (through colonialism) and today in the modern world (in the form of short term loans bounded by SAPs, overseen by the elite at the IMF and World Bank). Thus it is important to reconcile differences and discharge our moral duty by helping poorer countries to develop as we are the cause of this disparity, according to some theorists such as Nigel Dower. Therefore, through international aid, poor countries are given better resources, such as healthcare, education and infrastructure, which helps to create fairer competition and improves the wellbeing of individuals within these countries who for so long have been deprived of the basic rights and needs enjoyed by others around the world. An example of which being Sub Saharan Africa, which has seen economic growth of 5% per year, and thus putting it slightly behind Asia in terms of development, according to some such as Jeffery Sachs.

International aid has led to the poor being trapped in a poverty cycle. Dambisa Moyo is one of those economists who hold such a position. In fact she stresses that the cause of poverty itself, in continents such as Africa, is the high level of aid delivered, which has caused a dependency culture to emerge, as governments do not take responsibility for formulating social policies that improve the welfare of there citizens, as there is little need to do so. Africa once a continent with poverty levels of 10% in the 1970s, saw levels rise to 70-85% in 2009, thus demonstrating that over the $134 billion it receives in aid has simply gone to waste. Instead Moyo argues that such countries who are aid dependent, should look towards improving their ratings and learn how to pitch to investors in order to generate capital. Moyo’s claims are further supported by countries such as Vietnam which have experienced huge growth and development in terms of their GDP, without a large chunk of foreign aid, thus demonstrating the ineffectiveness of international aid.

Aid has been essential in terms of responding to emergency crisis, and has helped lessen its effects. All too often countries experience, natural disasters, civil wars or epidemics and it is in such cases that aid has made a significant difference to the lives of many. In fact, charities such as the British Red Cross have been able to supply water in Damascus where there has been a shortage of basic resources, and have successfully evacuated approximately 35,000 people from the city of Aleppo which has been the focal point of much of the conflict in the Syrian civil war, and by doing so have improved the lives of many innocent people who have found themselves stranded. Whilst other governments and NGOs, such as Oxfam, Save the Children and Christian Aid have also committed themselves with a simple goal of serving humanity by gathering aid for emergencies, such as the current East Africa crisis where there is widespread famine and little support available. Therefore, such charities are imperative in building a healthy and prosperous global community and bring about huge amounts of change for the better.

However, a large chunk of aid generated never reaches those who need it most. According to Development initiatives approximately 20% of foreign aid given never reaches the recipient country and instead is spent on the donor country in areas such as cancelling or rescheduling debts (The Guardian). Furthermore, many have been critical of the large amounts of donations spend by charities on administration costs and this has led to a greater debate about the transparency of a charity’s spending, with some reports such as the True and Fair Foundation being criticised for being “misleading” as one of its reports that claimed charities only spent a fraction on such running cost, as was reported by Helena Wilkinson of Price Bailey LLP.

Lastly, foreign aid is effective in bringing about foreign policy objectives. Realists such as Kenneth Waltz would disagree with the cosmopolitan stance that our moral responsibility extends to the whole of humanity and instead champion the approach that our moral duty is confined by the boarders of the nation state. Thus foreign aid is nothing but “new statecraft” (according to George Liska), but instead is a facade, as it conceals ulterior motives and is only delivered to poorer nations in the hope that the donor country will benefit. Examples of this have been illustrated by the UK government which used aid as a means to persuade the Rwandan government to withdraw support for the M23 rebellion in Eastern Congo (Matt Collin). Moreover, foreign aid has not necessarily benefitted countries that are suffering. In fact both Japan and the USA have been giving aid to NICs such as China with the hope of influencing environmental policy (Matt Collin), thus displaying how our moral responsibility towards underdeveloped countries is clearly displaced.

Although international aid has its flaws such as being used as a means to an end and has reportedly created a poverty trap, it’s numerous case studies that have helped countries and their citizens both in the short and the long term cannot be ignored. Thus instead of seeking to cut aid, we should instead focus our efforts on reforming aid so that it is more effective than ever before.

Rabia Bhatti

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