7 September 2008
analysis
Washington, DC — "An exit strategy from aid dependence requires a radical shift both in the mindset and in the development strategy of countries dependent on aid, and a deeper and direct involvement of people in their own development. It also requires a radical and fundamental restructuring of the institutional aid architecture at the global level." - Benjamin Mkapa, President of Tanzania 1995-2005
The issue about "aid," almost everyone agrees, is not just quantity, but quality. But what determines quality, and who should make those judgments? Answers to these questions, argues Yash Tandon in a new book, require rethinking the "aid" system fundamentally. As noted by civil society organizations at a parallel session to the official OECD "High Level Forum on Aid Effectiveness" (http://tinyurl.com/6z3rog), the "donors" are still tinkering with superficial changes rather than confronting these fundamental issues.
This AfricaFocus Bulletin contains excerpts from the preface to Tandon's book Ending Aid Dependence, by President Mkapa, and from the final chapter of the book. It also contains excerpts from civil society statements at Accra.
Another AfricaFocus Bulletin sent out today contains excerpts from a report to the UN Secretary-General on gaps in meeting international commitments to development.
For previous AfricaFocus Bulletins on aid and global public investment, visit http://www.africafocus.org/aidexp.php
For additional background, see
and
For an earlier article raising similar issues, by William Minter and Salih Booker, see http://www.africafocus.org/editor/aid0207.php
Aid: Rethinking Old Concepts
Benjamin W. Mkapa, President of Tanzania 1995-2005
Pambazuka News 394: Effectiveness of aid or ending aid dependence?
http://www.pambazuka.org/en/issue/394
The following is the foreword to Yash Tandon's new book, Ending Aid Dependence, published by Fahamu Books, September 2008. For more information please visit, http://www.fahamu.org/publications.
The primary and long-term objective of this monograph is to initiate a debate on development aid, and to lay out a doable strategy for ending aid dependence. An exit strategy from aid dependence requires a radical shift both in the mindset and in the development strategy of countries dependent on aid, and a deeper and direct involvement of people in their own development. It also requires a radical and fundamental restructuring of the institutional aid architecture at the global level.
A more immediate objective is to start a dialogue with the OECD's Paris Declaration on Aid Effectiveness, which forms the basis of a high level meeting in September 2008 in Accra, and to caution the developing countries against endorsing the Accra Action Agenda (the 'Triple A') offered by the OECD. If adopted, it could subject the recipients to a discipline of collective control by the donors right down to the village level. And this will especially affect the present donor-dependent countries, in particular the poorer and more vulnerable countries in Africa, Asia, Latin America and the Caribbean. ...Beyond the Paris Declaration, there is still the question: What then? There has to be a strategy for ending aid dependence, to exit from it.
There are countries in the South that have more or less graduated out of aid, such as India, China, Brazil and Malaysia, and there are others which will soon self-propel themselves out of aid dependence. In fact, aid was never a strong component in the development of either India or China. They have been reliant on their own domestic savings and the development of a domestic market through the protection of local enterprises and local innovation.
They have opened themselves up in recent years to the challenge of globalisation and foreign competition only after ensuring that their own markets were strong enough. Brazil, on the other hand, was an aid-dependent country until only recently. Both Brazil and Malaysia have succeeded in ending their aid dependence through strong nationally oriented investment and trade policies. These included supporting and protecting the domestic market and export promotion, as well as the currency, fiscal and monetary policies that go with them.
In an earlier period, during the 1960s and 1970s, the so-called tiger economies of Korea, Singapore, Taiwan-China and Hong Kong ended their aid dependence mainly in the context of the Cold War.
These countries were able to use the opportunity provided by the Cold War not only to draw substantial capital from the West, mainly the US, but also to build their production, infra-structural facilities (banking, finance, transport, communications, etc) and export capacity. They took advantage of the relatively open US market to export the products of their early manufacturing growth.
They benefited from the fact that the US needed them to fight communism in that part of the world. This enabled them to initiate state-supported industrialisation without having to account to institutions such as the World Bank and the IMF, to import technology without having to pay huge fees for intellectual property rights, and to build strong reserve funds.
This book is not about them, although valuable lessons can be learnt from them. We are now living in a different period of history. This book is about countries that were neither able to take advantage of the Cold War period, nor had the benefit of a large domestic market and entrepreneurial class to develop an endogenous development strategy. We are therefore talking largely about the hundred or so countries that fall within the classification of least developed countries (LDCs), the middle-income countries that are not LDCs but are still struggling to become economically independent from foreign aid, and the vulnerable, small and island economies. Geographically, these countries occupy the huge land mass of Africa, large parts of Asia and Latin America, the Caribbean and the Pacific islands.
The message of this book needs to be seriously considered and debated by all those that are interested in the development of the countries of the South. If this means the rethinking of old concepts and methods of work, then let it be so.
The Future of Aid
Yash Tandon
*Yash Tandon is the executive director of the South Centre, Geneva, an intergovernmental think tank of the developing countries.
http://www.pambazuka.org/en/issue/394
The following is an excerpt from the concluding chapter of Yash Tandon's new book, Ending Aid Dependence, published by Fahamu Books, September 2008. For more information please visit, http://www.fahamu.org/publications. The book is not yet in stock at Amazon or Amazon.uk, but can be ordered from Fahamu or from the Africa Book Centre (http://www.africabookcentre.com).
For far too long the debate on development aid has been constrained by conceptual traps and the limitations of the definitions provided by the donors. If the recipients or beneficiaries of aid are to own the process, as present trends in the development literature sug gest, then the conceptual reframing of the issues must itself change its location from the North to the South.
The conceptual starting point is not aid but development. The horse of development must be put before the cart of aid. Growth, admittedly, is an important aspect of development ,,,
The most critical aspect of our definition of development is its political economy and historical context. The developing countries have gained their political independence, but in most cases they are still trapped in an asymmetrical economic, power and knowledge relationship with the former colonial powers that continue to dominate the process of globalisation, and the institutions of global governance (the IMF, the World Bank, the WTO, WIPO, WCO, OECD, EU Commission, etc). The developing countries are making heroic efforts to disengage from this lock-in situation (demanding policy space, for example). Some of them (the so-called newly emerging industrialised countries of the South) have indeed succeeded or partly succeeded, but the bulk of the developing countries are still trapped in the shackles of history. Africa, especially, is identified as a continent that has not fared well.
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