Transcript HS4331 – International Health Theory

HS4331 – International Health Theory
Oct 6, 2008 - The Nature of Foreign Aid.
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AID
• Two kinds of foreign aid:
– Humanitarian aid: primarily for emergency relief
– Development aid: aims to create long term
improvement in…
• Health
• Economic wealth
• Other indicators of development
– Eg, human rights
– Eg, education levels
– Eg, government stability
AID
• Two distribution models:
– Bilateral aid: given by the government of one
country directly to another.
– Multilateral aid: given from the government of a
country to an international agency.
AID medium
World Bank
What type of aid is this?
multilateral
CIDA
bilateral
IMF
multilateral
USAID
bilateral
Note: The term “aid” is misleading, because almost all the
World Bank and IMF “aid” is in the form of loans
Terminology
• ODA = Official Development Assistance
– It’s what we usually mean by official foreign aid
• GDP = Gross Domestic Product
– total market value of all final goods and services
produced in a country in a year
– Traditional way to measure the size of an economy
• GNI = Gross National Income
– GDP + [income received from abroad, e.g. investment
interest] – [similar payments made to other countries]
Other (Debatable) Aid Categories
• Private aid
– Money given by private citizens to charities, which
then effect aid
• Remittances
– Money sent home by foreign workers
– World Bank estimates $1.2 billion transferred to
developing world via remittances in 2004
-free of government political agenda
-may reflect personal agendas (eg religious)
-IMF thinks this may have neg.
effect on economies
-remittances used by private
families, not countries
Specific Types of Aid
•
Project aid: given for a specific purpose e.g. building materials for a new school.
•
Programme aid: given for a specific sector e.g. funding of the education or health sector of a
country.
•
Budget support: A form of Programme Aid that is directly channelled into the financial system
•
Sectorwide Approaches (SWAPs): A combination of Project aid and Programme aid/Budget
Support e.g. support for the education sector in a country will include both funding of education
projects (like school buildings) and provide funds to maintain them (like school books).
•
Food aid: Food is given to countries in urgent need of food supplies, especially if they have just
experienced a natural disaster.
•
United Aid: The country receiving the aid can spend the money as they chose.
•
Tied Aid: The aid is used by the country donating it to build infrastructure, purchase goods etc.
•
Technical assistance: Educated personnel, such as doctors are moved into developing countries
to assist with a program of development. Can be both programme and project aid.
•
Emergency aid: This is given to countries in the event of a natural disaster or human event, like
war, and includes basic food supplies, clothing and shelter.
Humanitarian Aid
• Humanitarian aid is material or logistical assistance provided
for humanitarian purposes, typically in response to
humanitarian crises
• The primary objectives of humanitarian aid are to save lives,
alleviate suffering, and maintain human dignity.
– (c.f. development aid, which seeks to address the
conditions that may have brought about the crisis)
Humanitarian Aid
• The Sphere Project was launched in 1997 to
define a minimum set of standards for
humanitarian assistance
–
–
–
–
–
–
–
Care International
Caritas Internationalis
International Committee of the Red Cross
International Federation of the Red Cross
Oxfam
MSF
Etc
Humanitarian Aid
• Sphere Project
– produced the handbook, Humanitarian Charter and
Minimum Standards in Disaster Response
– Download it from here: www.sphereproject.org
• Decided upon 3 fundamental principles of
humanitarian assistance:
– The right to life with dignity
– The distinction between combatant and noncombatants
– The principle of “non-refoulement”
Humanitarian Aid
• Sphere Project
– “non-refoulement”
• A principle in international law –specifically refugee
law– which concerns the protection of refugees from
being returned to places where their lives or freedoms
could be threatened.
• Not the same as “political asylum”, which is the idea of
protecting individuals with proven threats to their
safety; rather, it involves large populations, generally in
war zones or after disasters
• Essentially, it forbids the repatriation of people to a
place where they will again be subjected to persecution
Development Aid
• Origins:
– Harry Truman, at end of WWII: “...In addition, we will provide
military advice and equipment to free nations which will
cooperate with us in the maintenance of peace and security.
Fourth, we must embark on a bold new program for making the
benefits of our scientific advances and industrial progress
available for the improvement and growth of underdeveloped
areas. More than half the people of the world are living in
conditions approaching misery. Their food is inadequate. They
are victims of disease. Their economic life is primitive and
stagnant. Their poverty is a handicap and a threat both to them
and to more prosperous areas. For the first time in history,
humanity possesses the knowledge and skill to relieve the
suffering of these people.“
The previous speech was given at the founding of NATO (North
Atlantic Treaty Organization). What does this suggest?
Aid is often linked to other foreign
policy agendas, including security
Let’s not forget…
Canada’s #1 recipient of foreign aid is:
Afghanistan
The USA’s #1 recipient of foreign aid is:
Iraq
Criticism of Aid
• Criticisms of intent:
• Aid is seldom given for reasons of pure
altruism
• Often given as a means of supporting an ally
• Often given as a means of influencing the
political process in a recipient country
• Aid by capitalistic organizations, like the World
Bank and IMF, seen as only meant to open up
new markets for Northern countries
Criticism of Aid
• Criticism of effectiveness:
• Much foreign aid is “stolen” by corrupt
bureaucrats in recipient country
• Much foreign aid is “stolen” by corrupt
bureaucrats in donor country
– Too much aid is absorbed by administration in donor
country
• No evaluation process, so we don’t know what
“good” we’re actually doing
• Are we getting enough “bang” for our buck?
More Criticism of Aid
• Ideology
– Many aid programmes are ideologically driven,
and not scientifically based
• Focus on faith-based interventions
• Focus on free market economics
• Debt
– Because so much aid is given in the form of debt,
it actually causes more damage in the long term
by increasing the indebtedness of recipient
country
Example of Agenda-Stricken Aid
• The Marshall Plan
-post WWII (1947)
-named for US Secretary of State George Marshall
-plan for the US to fund the rebuilding of Europe, to make
her profitable and better able to fend off Communism in
the future
-resulted in a very strong and wealthy Western Europe
Criticism:
-not altruistic, but an attempt to gain control over Western
Europe, as the Soviets gained control over Eastern Europe
-not effective, since nations with biggest investments
(Britain, Sweden, Greece) saw least growth, while those
with smallest investments (Austria) saw most growth
More Criticism of Aid
• James Shikwati (Kenyan economist):
– Aid is ultimately damaging since in almost all cases of bilateral aid, the money
is given to corrupt leaders to disburse, resulting in skewed distribution and
damage to the local economy
– Aid used by (African) politicians to manipulate people and influence votes
– Food aid dumped at low cost on peasants, killing the indigenous food industry
– Libertarian
– Believes more trade is best way to alleviate poverty
Opposing View
• Jeffery Sachs (American economist):
– “Africa’s governance is poor because Africa is poor”
– 2005 report
(hwww.unmillenniumproject.org/reports/fullreport.htm)
• Calls for increased development aid
• Calls for reallocation of aid priorities
– Essentially opposite view to Shikwati’s: that we need to
overwhelm poverty with serious aid commitments
– Read interview with him here:
www.motherjones.com/news/qa/2005/05/jeffrey_sachs.html
Opposing View To The Opposing View
• William Easterly (another American
economist):
– Read his response to Sachs’ plan here:
www.washingtonpost.com/wp-dyn/articles/A255622005Mar10.html
– Read his on-going correspondence war with Sachs here:
www.nyu.edu/fas/institute/dri/Easterly/SachsDebates.htm
– “Poverty never has been ended and never will be ended
by foreign experts or foreign aid. Poverty will end as it has
ended everywhere else, by home grown political,
economic, and social reformers and entrepreneurs that
unleash the power of democracy and free markets.”
Why Do We Have Aid?
• Is it for altruistic purposes?
– We want to do good in the world
• Is it for strategic purposes?
– We want to develop foreign markets for our products
– We want to bribe foreign governments to obey our wishes
– Reward our friends, punish our enemies
– Prevent the creation of refugees, terrorists, disease
• Is it for image purposes?
– No one wants to look cheap
• Is it for domestic purposes?
– International development is a multimillion dollar industry
– Keep highly paid consulting firms in business
Foreign Aid per
capita, 2007 (from
nationmaster.com)
-government aid
only
Foreign Aid per GDP,
2007 (from
nationmaster.com)
-government aid
only
0.7%
• In 1969, Prime Minister Lester Pearson wrote
a report for the World Bank called “Partners in
Development”
• Recommended that all developed nations
should give 0.7% of GNI as foreign aid (ODA)
• In 1970, the UN passed a resolution under
which almost all developed nations agreed to
the 0.7% commitment
0.7% cont’d
• By 2005, the average committed nation was donating
0.47% of GNI
• Canada was donating 0.34%
• Canada’s highest donation was in 1975, when we gave
0.53%
• Countries who have met their commitments:
–
–
–
–
–
Denmark (0.85%)
Luxembourg (0.83%)
Netherlands (0.73%)
Norway (0.87%)
Sweden (0.78%)
From:
www.tbs-sct.gc.ca