Hope & Justice*
24 06 2007Hope and justice means ‘getting your feet wet’ and sometimes, that can be extremely uncomfortable. (*from 12 Good Hours of Daylight)
After my last development post, some readers commented on the less desirable consequences of aid. Pointing out how we like to do these things, but the reality on the ground can be vastly different. We don’t really want well meaning charities simply handing resources into the hands of less altruistic local elites who can cynically manipulate the system.
The question is – how to sidestep the murky politics and get help directly to the people who need it the most?
In fact, there is growing disquiet with the way that aid programmes are impacting around the world and a growing debate about the impacts - positive and negative. The extreme message from some is that we should even stop some of these aid programmes.
“The Kenyan economics expert James Shikwati, 35, says that aid to Africa does more harm than good” and argues they should just stop as discussed at Marc Andreessen’s new blog from an much earlier interview in 2005.
P.J O’Rourke once described government as, other people spending other peoples money with no real thought to the consequences because it was, after all OPM.
“A politician who portrays himself as “caring” and “sensitive” because he wants to expand the government’s charitable programs is merely saying that he’s willing to try to do good with other people’s money. Well, who isn’t?”
At TED Global (June 2007 in Arusha, Tanzania) there was heated disagreement between Bono and Ugandan Andrew Mwenda on the politics of aid.
Where does the government money go? He argues that it goes disproportionately – roughly 25% of the Ugandan national budget – to “public administration”, in other words, “mostly patronage”. He points to 70 government ministers and 114 presidential aides, “who never see the president except on television… and then the President advises him, not the other way around.” There’s 333 members of parliament – “you need Wembley Stadium to hold our parliament.” Mwenda believes that cutting international aid would force governments to cut their own spending and address these core questions like corruption.
In a brighter moment, Madame Okonjo-Iweala told her own story about a doctor saving her sister’s life -”When someone is saving a life, you don’t care that it’s aid – you want the person to be alive” and urges us to do business with Africa instead.
To quote from a previous TED speaker Asraf Ghani (talking about Afghanistan)
“The aid system is broken,” says Ashraf Ghani in his powerful, reform-oriented talk. He discusses how to mobilize capital for state-building; why technical assistance fails; and why classic economic theory proved useless in Afghanistan, which is “dominated by the drug economy and a mafia.”
He emphasizes the necessity of investment (”A dollar in private investment is equal to 20 dollars of aid”) and design ingenuity to rebuild broken states. And he offers a blueprint: the 10 key functions that a state should perform, from providing infrastructure to enforcing the rule of law…Afghanistan should not be approached as a charity, but as an investment “
Better infrastructure has been mentioned quite a few times, Iqbal Quadir (also on TED) makes the point that 1 mobile phone can make a huge difference in countries without much infrastructure. In his video presentation Iqbal Quadir explains why “aid does damages: because it empowers authorities instead of people,” and advocates a new approach to development from below, “by the people for the people.”
Microfinance and microenterprises programmes have been highly successful in transforming the geopolitical landscape in many of these countries. Even a simple thing like finding better ways to cook meals with cleaner burning fules can have a huge impact as Amy Smith’s story shows. (Fumes from indoor cooking fires kill more than 2 million children a year in the developing world.)
To put things into local perspective – this year in NZ we are talking about NZ$400m+ over the next budget period. Here are some comments on changes to NZ’s aid budgets from Paul Reynolds which is worth reading in full.
“Tucked away in the recent New Zealand budget was the welcome news that New Zealand had increased its aid and development contribution by $70 million.
The 20.2 per cent increase over the 2007/08 financial year was reported as being the biggest increase to Official Development Assistance (ODA) in decades, Over half the new funding will be spent in the Pacific, particularly in Melanesia, and Asia would also benefit.
The increase takes the New Zealand ODA to $429 million in 2007/08 or 0.30 per cent of gross national income (GNI). Further funding over the three following years would achieve 0.35 per cent by 2010/2011 and aid would have reached $601m.
This is in contrast with previous OECD figures which had NZ’s as one of the least generous of international donors, at US $257 million (NZ $361m) in 2006 – 0.27 per cent of Gross National Income (GNI). This in turn was reported as being far below the 0.46 per cent average effort by OECD countries and the no better than New Zealand achieved in 2005.”
I’d like to think that $400m and the private sector aid programmes are doing the very best they can – and that the unintended consequences are minimised as far as possible.
One great example of NZ aid that works, are these two water supply projects in Mongolia and Cambodia by sustainable engineering consultancy Synergine and a prominent NGO.
Intriguingly, a man described as “New Zealand billionaire Stephen Jennings is turning his focus from Russia’s oligarchs to new assets in Africa where his investment bank Renaissance Capital plans to double its investments to $1.3 billion this year.” Jennings also noted that “Africa’s longest expansion in more than three decades was fuelling demand for capital from overseas.”
It could be worth tracking these RenCap projects. Not all trade is positive, just as not all aid is negative. Person to person (p2p) microfinance for example works.
Microenterprise programmes seem to be the most successful. More debate is welcome on the role of trade which comes from Kofi at Annansi Chronicles.
See also my post at Idealog on Hans Rosling and gapminder software which shows new ways to present numbers to effect policy change. (The s/w makes it easy to view trends at country level for example.) See Granta on African voices and Jennifer Brea
As Derek Lind puts it in his song ‘Hope & Justice’ – be careful what you pray for – you gonna get your feet wet. Hope and justice take commitment and results take real effort.
“That puddle on the mosaic floor
Might just be what you’re praying for
It might be justice dripping at your feet
It might be justice be careful what you speak
You pray justice come rollin’ like a river
It’s a sure-fire bet – gonna get your feet wet“
I’d guess that most people want to see aid programmes continue – but how to make sure that the aid gets to those who need it most; and does so in a way that encourages local enterprizes and self help is the dilemma.
What do you think about the role of development aid? Can we do better?
development aid 
TED.com 
microenterprise 
TEDGlobal
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I like the microfinance approach and the general development of Peer to Peer lending. I have used Kiva (www.kiva.org) which has been really interesting. People pay their loans back pretty quickly.
Here you are empowering people to make their own future by creating value for themselves. I think Aid has a place but it doesn’t look to have worked other than in the medical arena. It also encourages corruption and leakage with at least 25% of the money, and sometimes much more, disappearing en route.
It’s a bit like government bureaucracy
What i like most about P2P lending is that the web can enable this to happen and therefore bring huge efficiency gains. At the moment middleman costs (administration and checking) mean interest rates are high. I would hope that this process can be further enhanced to bring lower rates to borrowers. Still it should be noted that the interest rates do not prohibit borrowing or repayment.
People just need some capital to get going.
Money is just energy and we should spread it around but lets make it more connected. Aid is an old model and i think the web can take it to the next level.
Any takers?
Raf – I agree with you – see my earlier post on P2P lending regarding Kiva, Prosper and Zopa programmes at http://www.dialogcrm.com/blog/2007/02/21/creative-banking-is-not-an-oxymoron/
I’m also tracking a programe caled http://www.heifer.org/ which provides animals to families in 50 countries at a very grass roots level. Hope to write about that later on.