International Aid


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International Aid

  2. 2. Institutions of Aid and Development <ul><li>International Monetary Fund (IMF) </li></ul><ul><li>World Bank (WB) </li></ul><ul><li>United Nations (UN) </li></ul><ul><li>Mission specific organizations: WHO, UNICEF, </li></ul><ul><li>Assorted Regional Development Banks and Cooperatives </li></ul><ul><li>Non-governmental Organizations (NGOs) </li></ul><ul><li>State actors delivering direct aid </li></ul>
  3. 3. Questions to Consider <ul><li>What did you know about IGOs before this lesson and was your image of them negative, positive, or neutral? </li></ul><ul><li>How has this information changed your perception? </li></ul><ul><li>Do you think the US is actively participating in aiding the global economy.  If so, how and if not, how not and why not? </li></ul><ul><li>What form of international aid disbursement seems best? </li></ul><ul><li>How should aid effectiveness be measured? </li></ul><ul><li>How can International NGOs genuinely incorporate input from the communities in which they work in assessing their aid effectiveness? </li></ul><ul><li>How can NGOs improve the effectiveness of their aid?  </li></ul>
  4. 4. A Brief History of Development Aid <ul><li>The World Bank and the IMF were created at the Bretton Woods conference in 1944 </li></ul><ul><ul><li>Twin institutions intended to ensure financial stability and security from economic shocks </li></ul></ul><ul><li>Focus shifted over the decades from poverty alleviation to debt management and structural adjustment to sustainable develop assistance </li></ul>
  5. 5. Adapting Strategies <ul><li>Five key factors identified for successful development: </li></ul><ul><ul><li>Build capacity – Strengthening governments and educating government officials </li></ul></ul><ul><ul><li>Infrastructure creation – implementation of legal and judicial systems for the encouragement of business, the protection of individual and property rights and the honoring of contracts </li></ul></ul><ul><ul><li>Development of Financial Systems – the establishment of strong systems capable of supporting endeavors from micro credit to the financing of larger corporate ventures </li></ul></ul><ul><ul><li>Combating corruption </li></ul></ul><ul><ul><li>Research, Consultancy and Training </li></ul></ul><ul><li>Comprehensive Development Framework: </li></ul><ul><ul><li>Development strategies should be comprehensive and shaped by a long-term vision </li></ul></ul><ul><ul><li>Development goals and strategies should be “owned” by the country, based on local stakeholder participation in shaping them </li></ul></ul><ul><ul><li>Countries receiving assistance should lead the management and coordination of aid programs through stakeholder partnerships </li></ul></ul><ul><ul><li>Development performance should be evaluated through measurable results on the ground in order to adjust the strategy to outcomes and a changing world </li></ul></ul>
  6. 6. MGDs: A Modern Framework <ul><li>The UN annually publishes the Human Development Index (HDI), a comparative measure ranking countries by poverty, literacy, education, life expectancy, and other factors. </li></ul><ul><li>The Millennium Development Goals are eight goals that all 192 United Nations member states have agreed to try to achieve by the year 2015. This was declared in the United Nations Millennium Declaration, signed in September 2000. </li></ul><ul><li>Millennium Development Goals </li></ul><ul><li>eradicate extreme poverty and hunger; </li></ul><ul><li>achieve universal primary education; </li></ul><ul><li>promote gender equality and empower women; </li></ul><ul><li>reduce child mortality; </li></ul><ul><li>improve maternal health; </li></ul><ul><li>combat HIV/AIDS, malaria, and other diseases; </li></ul><ul><li>ensure environmental sustainability; and </li></ul><ul><li>develop a global partnership for development. </li></ul>
  7. 7. Justifications <ul><li>Large disparities in the world difficult to bridge by traditional development processes </li></ul><ul><li>Insurmountable “poverty traps” which prevent growth </li></ul><ul><ul><li>Include issues such as: endemic illness, degradation of arable land, unstable political climate, frequent conflict </li></ul></ul><ul><li>Marginalized segments of populations remain bereft: women, children, chronically ill </li></ul><ul><ul><li>Particularly susceptible to death from preventable causes, often disenfranchised </li></ul></ul>
  8. 8. Failures of Commitment? 2007 International Aid Donated (Official Development Assistance) COUNTRY For each $100 earned in the country, how much is donated in aid Aid as % of income How close the country is to reaching the 0.7% goal Norway 95 cents 0.95 Already reached goal Sweden 93 cents 0.93 Already reached goal Luxembourg 90 cents 0.90 Already reached goal Denmark 81 cents 0.81 Already reached goal Netherlands 81 cents 0.81 Already reached goal Ireland 54 cents 0.54 Scheduled to reach in 2012 Austria 49 cents 0.49 Scheduled to reach in 2015 Belgium 43 cents 0.43 Scheduled to reach in 2010 Spain 41 cents 0.41 Scheduled to reach in 2012 Finland 40 cents 0.40 Scheduled to reach in 2010 France 39 cents 0.39 Scheduled to reach in 2012 Germany 37 cents 0.37 Scheduled to reach in 2014 Switzerland 37 cents 0.37 No schedule yet United Kingdom 36 cents 0.36 Scheduled to reach in 2013 Australia 30 cents 0.30 No schedule yet Canada 28 cents 0.28 No schedule yet New Zealand 27 cents 0.27 No schedule yet Italy 19 cents 0.19 Scheduled to reach in 2015 Portugal 19 cents 0.19 Scheduled to reach in 2015 Japan 17 cents 0.17 No schedule yet Greece 16 cents 0.16 Scheduled to reach in 2015 United States 16 cents 0.16 No schedule yet
  9. 9. Myths of Aid: Blaming the Victim <ul><li>While many accuse the LCD of failing to follow prescribed development strategies and ensuring their own stagnation, the evidence suggests otherwise </li></ul><ul><li>Africa has received increasing amounts of aid over the years—in fact, aid to Sub-Saharan Africa fell by 48% over the 1990s </li></ul><ul><li>Africa needs to integrate more into the global economy—in fact, trade accounts for larger proportion of Africa’s income than of the G8 </li></ul><ul><li>Economic reform will generate new foreign investment—in fact, investment to Africa has fallen since they opened up their economies </li></ul><ul><li>Bad governance has caused Africa’s poverty—in fact, according to the UN Conference on Trade and Development (UNCTAD), economic conditions imposed by the IMF and the World Bank were the dominant influence on economic policy in the two decades to 2000, a period in which Africa’s income per head fell by 10% and income of the poorest 20% of people fell by 2% per year </li></ul>
  10. 10. Bias and Prejudice <ul><li>Nations direct aid to where it will benefit them </li></ul><ul><ul><li>Towards nations with favorable economic practices </li></ul></ul><ul><ul><li>Towards politically sympathetic nations </li></ul></ul><ul><ul><li>Towards culturally similar nations </li></ul></ul><ul><li>Aid tied with conditions cut the value of aid to recipient countries by some 25-40 percent, because it obliges them to purchase uncompetitively priced imports from the richer nations </li></ul><ul><li>Example: US purchases American pharmaceuticals for HIV/AIDS relief programs and uses Caterpillar equipment to support construction of infrastructure </li></ul>
  11. 11. Continued <ul><li>Example: To take one example, much has been made of America’s generosity towards Africa under the Africa Growth and Opportunity Act (AGOA)…Under AGOA’s so-called rules-of-origin provisions, the yarn and fabric used to make apparel exports must be made either in the United States or an eligible African country. If they are made in Africa, there is a ceiling of 1.5 per cent on the share of the US market that the products in question can account for. Moreover, the AGOA’s coverage is less than comprehensive. There are some 900 tariff lines not covered, for which average tariffs exceed 11%. According to the International Monetary Fund (IMF), the benefits accruing to Africa from the AGOA would be some $420m, or five times, greater if the US removed the rules-of-origin restrictions. </li></ul>
  12. 12. Failures of Delivery? <ul><li>Economist William Easterly argues that large hulking Western institutions cannot deliver aid effectively and have squandered many resources and opportunities in the past. </li></ul><ul><ul><li>Makes distinction between bureaucratic planners and innovative searchers </li></ul></ul><ul><ul><li>Strong advocate of NGOs, locally rooted organizations </li></ul></ul><ul><li>Planners not mal-intentioned: their education, culture, society, etc., is geared towards perpetuating the existing system, so they cannot think outside of that “framework of orientation,” a critique offered by J.W. Smith </li></ul><ul><li>Others, such as Ha-Joon Chang note the hypocrisy of Western prescriptions </li></ul><ul><ul><li>Nascent world powers often engaged in protectionism to shelter industries </li></ul></ul><ul><ul><li>Free trade beneficial amongst well-matched competitors </li></ul></ul>
  13. 13. Alternatives <ul><li>BOP strategies: hope to unleash entrepreneurial and productive power of the underprivileged </li></ul><ul><li>Stabilize and Liberalize: nations such as China, India, Turkey have enjoyed growth by allowing large private investments from developed nations. </li></ul><ul><ul><li>Stability often presents a significant challenge </li></ul></ul><ul><ul><ul><li>Some areas “ungovernable” </li></ul></ul></ul><ul><ul><ul><li>Territorial disputes undermine government authority </li></ul></ul></ul><ul><li>Protectorship and Partnership: either rely upon a developed nation to directly control or closely assist </li></ul>
  14. 14. Haiti: Revisited <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul>
  15. 15. Other Considerations <ul><li>States are often tenuous at best—in many undeveloped regions, tribal, sectarian authorities command more respect </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul>