In the question
of aid, there are several factors which play a part in how aid should or could
be distributed by donor countries and how it should or could be managed
efficiently by recipient countries in the developing world. Some of the factors include democratisation,
corruption and conditionality.
On the whole, it
has been proven that countries in receiving a steady stream of aid, fare better as they democratise than those that do not. According to studies shown
in an article published by the International Organisation in spring 2004 by Thad
Dunning, between 1975 and 1986, the results of those third world countries who
democratised, was positive. It is
pointed out that, with the demise of the
There is an
entire argument which is based on whether or not a third world country should
democratise first or develop first, before receiving aid. Generally speaking, it is easier for
countries who have democratised first to flourish upon
receiving aid. With better transparency,
more accountability and more flexibility within a recipient government, a new
democracy might be more likely to put aid to use more efficiently than an
autocracy, where it is not as easy to screen out any possible corruption or
economic manoeuvring by the government.
However, it is
wrong to think that just by democratising alone, the issue of poverty reduction
will be addressed within a third world country.
For example, the Asian tiger countries, as they are known have stuck to
their own styles of government, yet managed to flourish economically on their
own terms. It is worth noting however,
that poor democracies and poor autocracies spend roughly the same on education
and health, according to an informative Foreign Affairs article dating 2004. According to this article, life expectancy
rates were up to 25% higher in poorer democracies, simply because they tended
to use their resources more efficiently.
It was also pointed out that since 1950, more
autocracies were hurt by economic setbacks than in poor democracies. At the very least, a poor democracy is much
more likely to (fully benefit) from donor aid, rather than how a dictator may
see fit to spend the aid within his/her regime.
The issue of
corruption is complex when it comes to foreign aid, because there is corruption
practiced by donors as well as recipient countries.
It is an increasing
worry, whenever there is a natural disaster, famine or any aid sent out by
donors to third world countries, whether or not that country/region is really
going to receive the aid. The World Bank
and IMF are especially corrupt in the way they seek to make a recipient country
repay their debts. The WB and IMF might
charge a certain rate of high interest, such as they did in the ‘80s, as well
as a certain percentage of the export economy, which crippled both Latin
American and African countries during the ‘80s.
Not that recipient countries should in the beginning, be expected to not
have to repay loans, but it should be first and foremost, that a recipient
country is allowed to develop both economically and structurally, before being
expected to repay a loan. To monitor a
country’s every move as well as infringe on its very sovereignty, in the name
of debt owed to aid given, is nothing less than corrupt.
On the other
hand, when a dictatorship accepts aid from one or more donors, then channels it
into its regime rather than to the benefit of the people it was meant for,
there is little donors can do once the aid has been dispatched. Not all banks, such as the European/EU banks
traditionally require its recipients to practice good governance, transparency
and accountability, which screen out potential corruption.
According to an
International Affairs article of this year, the EC is specifically striving to
make development and reconstruction go hand in hand. However, many countries especially within the
EU, tend to make up their own aid initiatives rather
than working in harmony. Hence chaos,
lack of organisation and distribution management prevails on the part of
donors.
In saying this,
especially democratic recipients, must be held accountable for their own aid
management. USAID for example, sponsors
many judiciaries, political parties, parliaments and reconstruction projects,
but the danger in this is it is liable to sponsor an unfavourable party or
dictatorship, in the name of security/strategic purposes. For example, the
Conditions
placed on recipient countries in order to receive aid is not anything new. During the Cold War, third world countries
could choose which superpower to receive aid from, therefore the condition of democratisation wasn’t as enforced
as it has been in the post Cold War years. Many countries democratised anyway
after the fall of the
Conditionality is
increasingly becoming more about security and strategic purposes, rather than
winning a third world country over in superpower rivalry. In light of this, many NGO’s are worried that
security will out bit the urgency for aid where it is desperately needed. For example, the president of
By contrast,
In conclusion,
the three main points analysed above; democratisation, corruption and
conditionality are interwoven in the complexities surrounding aid to third
world countries.
In my educated
opinion, democratisation should not be a pre-condition for a country to receive
aid. There must be programs and
initiatives in place to examine a recipient country’s human rights record, its
spending habits and its own development patterns, whether it is a democracy or
not. However there must be encouragement
towards good governance, transparency and accountability. In the case of corruption, it would be a
positive step, if aid was directly filtered through non governmental
organisations (NGO’s). On the whole,
NGO’s are in the business of making poverty history and seeing direct results
on the ground of any developing country.
An independent watch dog body might be set up to:
In the immediate
G8 climate, debt cancellation and throwing still more millions at the problem
of third world poverty, seemed to be the order of the day; this of course was
nothing new. According to an article in
the Economist in July this year, the biggest critique by charities and NGO’s
was that it was too little too late. Some of the most impoverished countries
would receive more aid and have their debts written off, but the new aid would
not come until 2010. Of course aid cannot be distributed over
night, and the concern was also that, how would some of these donor countries
such as the
Hence, as
mentioned above, there must be an independent body of scrutiny in how donor
countries co-ordinate and distribute their aid.
Again, with
countries making up their own set of rules as they go along, with little regard
for whether recipients are reaping the benefits or not, can only ensure further
chaos and confusion on either side; thus fanning the flames of resentment and
widening the gap between rich and poor.
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