Is the UK Aid budget under threat from Conservative reforms?

Is the UK Aid budget under threat from Conservative reforms?

A recent opinion article by Zoe Williams highlighted the dubious spending of the UK Aid budget on private, for-profit investments in developing countries which masquerade as projects in the best interests of the most vulnerable in society. Luke Humphrey investigates the Conservative Party policy on the UK Aid budget and what it means for the future of UK Aid.

In the aftermath of the shocking 2017 General Election result, several Conservative manifesto pledges were dropped from the Queen’s speech. The Conservative pledge toward the 0.7% overseas aid commitment is confusing at the time of writing this, with disapproval of the policy from many in the party such as Nigel Evans MP and even Chancellor of the Exchequer, Phillip Hammond, who suggest a review of the aid budget in 2020. What is neglected from discussions about the Conservatives pledge on UK aid spending is a rethinking of what kind of projects fall under UK aid spending.

The 2017 Conservative pledge differed from that of the other mainstream parties in that it not only committed to spending 0.7% of Gross National Income (GNI) on overseas aid, but it also stated that the party would seek to change how overseas aid spending was defined, ultimately altering what the UK can spend aid on. Currently, the definition of what countries can spend their aid budget on in developing countries is defined by the OECD/DAC, who came up with it in 1972. However, this definition is now considered by the Conservatives as outdated and unsuitable for the development and political challenges of today.

According to Conservative MP and Member of the International Development Committee Pauline Latham who spoke at a recent Contemporary UK Development Aid Conference in Leeds, there are several parts of the OECD/DAC definition which have become obsolete and do not fit what is now needed in development spending. Despite acknowledging that parts of the definition need to be edited, removed and added to, Latham could not reference a single component of the existing aid definition that desperately needed changing under the Conservatives proposals.  Similar to the  idea of  Tory MPs riding rough-shod over the rewriting of the Human Rights Act, the idea that a group of MPs can switch around and adapt the definition of aid for their own purposes is worrying, as is the lack of clarity about what would change.

DfID Field Visit to Somali Region in 2017| UNICEF Ethiopia

There is an on-going debate across Whitehall about how much overseas aid spending should be in the national interest , and subsequently directly benefit the UK government.. In October of last year, Conservative MP and Secretary of State for International Development Priti Patel indicated that the UK aid budget under the Conservatives would be  more focused on benefiting the UK , arguing that we need to have an aid budget that “works in our national interest”. In an exclusive interview with Development in Action, ex-International Development Secretary and Labour MP Hilary Benn claimed that the UK aid budget “ is morally right, but it is also in our self-interest”. This question over the balance between the national interest and the interest of the poorest and most vulnerable in recipient developing countries is likely to spill over into the reframing of what falls under aid spending.

Considering the emphasis on reigniting relationships with the Commonwealth and African Caribbean Pacific group  (ACP)  states post-Brexit, we can begin to deduce what exactly aid spending might focus more on, according to the Conservative’s definition, despite the lack of clarity from the party themselves. Under the current definition, aid cannot be spent directly on facilitating and sweetening up trade deals. However, Priti Patel, among other Conservative MPs, has hinted at an aid for trade scheme which could benefit the trade negotiations led by the Secretary of State for International Trade, Liam Fox MP. So, it seems likely that aid spending on trade will be much more relaxed in the Conservative proposals for the new aid definition. This raises questions over what exactly the UKs aid priorities will look like over the next few years.

As the country moves closer to finalising   Brexit negotiations, will we see a move towards trade for aid over other priorities such as meeting the SDGs? Or will these changes in definition only seek to update the OECD/DAC definition by introducing new rules on more recent issues such as FGM/C, Climate Change and outbreaks of diseases such as Ebola and Zika? One thing is for sure, with the minority government, any definition will have to be wholly agreed upon by all Conservative and DUP members if it stands any chance of passing into the House of Lords, which will also have its own set of challenges to the Conservative party, as has been proven on controversial issues such as tax credits and the powers of parliament over final Brexit decisions.

Feature Image: Enough Food IF


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Pulling Strings: The Fine Print Behind Development Aid

Pulling Strings: The Fine Print Behind Development Aid

While development aid can provide countries and their citizens with the resources necessary to complete crucial infrastructure and relief projects, it often comes with an unintended price. Adam Grech examines the conditions that often come attached to aid, and the ways in which they can hinder, rather than promote, national development.

Across the world, numerous countries, companies, and NGOs contribute significant amounts of aid to nations in need. While the intentions of the majority of these groups are positive, in certain instances, the provision of aid has created significant burdens for the recipient states through the process of conditionality.

Largely beginning in the 1920’s, wealthy European nations began to provide aid to colonies under their administration for purposes of economic development. Following the Second World War and the implementation of the Marshall Plan, the United States became a large international donor, and entered into an arms race for global alliances with the Soviet Union. Both sides immediately began to use development aid in order to increase their respective spheres of influence.

While aid in exchange for political conditions has long been in place, during the 1990’s, there was a push towards specific obligations by nations providing development aid. The view was that elected regimes would provide more national stability and help to limit the ability of dictatorships to form in at risk areas of the world. Therefore, donors began to place a move towards a democratic government and liberal economic systems as requirements for developing nations in order for them to continue to receive aid payments.

The G8 give something back to Mother Africa | Jeff Weichel

Organisations that impose significant conditions on development aid such as the World Bank and International Monetary Fund, have been criticised for their imposition of structural adjustment conditions, for example, privatisation programs, liberal trade policies, as well as public sector reforms. As stated by the IMF, the intention behind elements of conditionality for development aid is to put into place measures that better ensure the repayment of the donation itself. This, however, is not always the case, and often, governments find themselves unable to financially cope with new economic systems or trade practices that are put into place.

Politically, countries such as China have also been able to use development aid and conditionality as a way to gain access to trade relationships and valuable resources. In Africa for example, China has been a significant donor, with over 60 billion USD in aid pledged to the continent. In many countries in which China has heavily invested in development projects, natural resources are abundant, and low interest loans are often provided in order to capitalise on their availability. In the Democratic Republic of Congo, China has exchanged development aid in the form of infrastructure projects for access to the country’s vast copper and cobalt stores as payment, and will extract over 7 million tons of minerals over the next 25 years.

This issue of ‘tied aid’ remains prevalent today, as the cost of the provisions purchased often significantly reduce the real value of aid received by recipient states. In some cases, the export of critical, and costly, aid imports by donor states has the potential to reduce the true amount of assistance received by 25 to 40 percent. Over the long term, and in combination with limited control over spending options of received aid, recipient countries are often left with limited sources of aid for development projects, hampering much of the progress assistance programs could make.

Of countries that have felt the impact of aid conditionality and debt repayment, those in Sub-Saharan Africa have come to bear the economic difficulties of these conditions placed on development aid severely. Despite numerous instances of aid forgiveness, nations such as Ghana have continued to struggle to repay outstanding aid loans. Although Ghana experienced success with investment in oil reserves in 2010, the Ghanaian government required an additional 1 billion USD bailout from the IMF, and its probability of defaulting on its payments have increased substantially since 2011. With little economic progress to show for, many developing nations now find themselves in a continuous and vicious cycle of substantial debt, making future repayment increasingly difficult.

IMF Deputy Managing Director, Nemat Shafik signs deal recognising the Africa Regional Technical Assistance Center with the Finance Minister of Ghana, Seth Terkper | IMF/Ghana MOU

These mixed outcomes hold significant consequences for the acceptance and delivery of development aid. For many receiving development aid, the perceived ‘strings’ that come with aid payments may seem daunting, and could discourage countries from accepting much needed assistance in the future. For donor nations and organisations, it will be important to ensure that more equitable aid payment and distribution protocols are established in order to provide more security for those countries receiving them, and in turn the citizens who are the ultimate beneficiaries of global development programs.

Feature Image: Fairphone | Flickr


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Why isn’t end of life care higher up the development agenda?

Why isn’t end of life care higher up the development agenda?

According to the World Health Organisation, over 60% of new cancer cases globally are from Africa, Asia, Central and South America. Although incidence rates are low, the number of people surviving the disease in these regions is even fewer. 70% of global deaths from cancer are in these four regions alone. Delays in diagnosis mean more people in developing countries are already at an advanced stage in their illness. Poor families may receive treatment that they can afford and is available, but it is not always the most appropriate and some forego treatment altogether.

A lack of palliative and end of life care is a global problem. Almost 80% of the global need is in the developing world, but most care is provided in high- income countries. Without such care, the millions of people diagnosed with diseases such as cancer, diabetes, lung and heart conditions or non-communicable diseases (NCDs) – the majority under the age of 65 – may face dying in pain, without dignity or the care that they need. Research shows this can have an impact on families who have lost a loved one, leaving them with painful or difficult memories that may stay with them into the future.

Palliative and end of life care can make a huge difference to people with chronic and terminal illnesses. The National Council for Palliative Care, a UK body, defines it as holistic care that takes into account a person’s physical as well as psychological, social or spiritual needs. It can help to improve quality of life, and for those nearing the end of life, can enable them to die in their place of choice, usually at home or in a hospice.

Although many in low and middle-income countries die at home, this often isn’t through choice, but rather as a result of poor healthcare systems and a lack of required care services. Few services exist in poorer countries and where they do, they are unable to meet the needs of rapidly growing populations. According to the Global Atlas of Palliative Care, in Pakistan, where NCDs are estimated to account for 50% of deaths, there is one palliative care service for every 90 million people (the total population is an estimated 193 million). In Turkey, which is recognised as a middle-income country, there is one service available for roughly every 360,000 people. This is in contrast to the Netherlands – a rich economy – where there is one service for every 200 people.  Just 58% of countries in the world had one or more hospice palliative care service in 2011, with integration within health services only the case in 20 countries globally.

woman lying down on the doorstep of a stone building with a small child looking away from the camera
Woman in front of the Home for the Sick and Dying Destitutes, established by Mother Teresa, in Kolkata, India |Photograph Zvonimir Atletic / Shutterstock

 

There are examples of where greater investment in palliative care is making a difference. Hospice Africa Uganda aims to provide affordable care and has achieved this in 80% of the country’s districts. However, initiatives like this are often at risk from the withdrawal of donor funding.

What else is being done?

Nine of the thirteen targets included within the UN’s Sustainable Development Goal for ‘Good Health and Wellbeing’ are identified as major health priorities. Included in this list for the first time are non-communicable diseases. Cardiovascular, chronic respiratory disease, cancer and diabetes together account for 82% of deaths worldwide. Despite being the cause of 60% of global deaths in 2000, they were noticeably missing from the Millennium Development Goals at their launch. The same could still be said of palliative and end of life care. While efforts are being made to prevent and control non-communicable diseases these fail to take account of the millions living with these diseases.

Conversations about death are often seen as taboo, but it is something that will happen to all of us. With more people living longer, talking early on about how we want it to happen is important now more than ever. Palliative and end of life care accounted for just 0.16% of the £2 billion spent by government and charitable funders on health-related research in the UK in 2014. Raising awareness at home could help to encourage greater investment in an area that is desperately underfunded and recognition of the urgent need for palliative and end of life care to be prioritised within the global development agenda. This is so that the growing numbers of people in the developing world diagnosed with NCDs receive the high-quality support that they deserve to help them live as well as possible until they die.

Find out more:

The Economist – The Problem of Pain

News Deeply – How Nurses and Cheap Morphine Made Uganda a Model for Palliative Care

The Guardian – Cancer rates are soaring in Africa, yet Tanzania’s radiotherapy hub stands idle 


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Nigerian education must break free from its colonial past

Nigerian education must break free from its colonial past

Since the 1980s, inadequate facilities, low achievement and poor attendance have plagued the Nigerian education system. Education policies have been volatile and bureaucratic. These issues have partly arisen from under-funding during periods of political instability, military rule and economic crisis. But many of the problems can be traced back to the Eurocentric curricula and teaching methods of the colonial era. Furthermore, in 2010, the primary completion rate was 76 percent and in 2014 junior-senior secondary transition rates were 16 percent. Post-independence reforms have not yielded long-lasting benefits and continue to align with the ideals of the colonial regime.

Although colonial education policy officially began with the 1882 Education Ordinance, the colonial administration started playing a more direct role in the system in 1925 with the publication of the Memorandum on Education Policy in British Tropical Africa. While this policy statement advocated an approach that was ‘adapted’ for ‘black Africa’, Nigerian education was primarily driven by the material incentives of the colonial regime. Throughout this period, the colonialists required “literate, but junior clerical and mid-level manpower…fit to work at government offices, trading companies and…educational institutions”. This “anxiety to produce clerks of the right calibre” explains the literary bias of colonial education, as well as the focus on examination-based certification.

Alongside the abolition of cultural heritage, colonial education contributed to a low demand for technical education, as literary professions provided more promising routes to material success. Even if the colonial curriculum was moderately adapted through industrial subjects and mother-tongue instruction, the individualistic and materialistic values underlying Western education were replicated in the Nigerian context. Schooling was viewed by Nigerian parents as a form of professional training that would help their children achieve Western living standards. These economic incentives directly opposed the goals of socialization and individual responsibility that guided traditional education in pre-colonial Nigeria.

With the advent of independence in 1960, the Nigerian government began to sponsor educational content that better aligned with national unity and economic self-reliance. This can be seen in the promotion of technical education, from implementing vocational subjects to developing polytechnics. They also implemented curriculum reforms, such as basic-level ‘religious and national values’ courses, aimed at contextualising learning and encouraging ethnic cohesion. Social Studies has also been promoted at secondary level to cultivate respect for diversity.

girl sitting at desk looking behind her and smiling
African girl in school classroom | Photograph Gagliardi Images/Shutterstock

 

However, although there has been increased employment and lower drop-out rates, ethnic and religious tensions have been heightened by a system of competitive grade progression that encourages cheating and discrimination against non-indigenes by school officials. Examination-based assessments give students little opportunity to interact with each other and their environment, leading to falling levels of knowledge attainment. Many Nigerian students and parents still have a literary bias.

Furthermore, the post-independence education system continues to equate education with economic gain. In 2014, the International Organization for Migration reported that academic education was still widely preferred to technical or vocational routes.  Nigeria’s economic transformation blueprint, Vision 20:2020 states that one of the primary goals of education is to provide adequate and competent manpower for economic transformation. So, the success of post-independence reforms has been hindered by a system that continues to align with the ideals of the colonial regime.

The creation of a culturally viable education system requires re-evaluating the educational purpose advanced by the colonial administration. Traditional African education could prove useful in this regard. Rather than a complete return to indigenous teaching, traditional culture and values could be revitalised to solve modern problems. This philosophy has proved successful in the culturally expressive, community-based learning of the Junior Farmer Field and Life Schools set up by the UN Food and Agriculture Organisation and the World Food Program. This would allow the Nigerian education system to address developmental needs whilst surpassing its imposed Western structures, acting as a mechanism with which to reclaim Nigerian legitimacy and heritage from the colonial past.

Find out more:

Daily Trust – States spending 7.3 of budgets on education

Vanguard – The Problem’s with Quality, Not Standards

Global Campaign for Education

Thumbnail image: African School Girl Writing outside her classroom, Mali | Photograph Riccardo Mayer/Shutterstock

 


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How to (not) do participatory development

How to (not) do participatory development

Participatory development has gained enormous popularity among practitioners wanting to encourage active participation in project decision-making and implementation. The idea is that communities gain a sense of ownership over the project instead of seeing it as an external intervention. In theory, participatory development puts local knowledge on the same level as expert knowledge and brings people together as equals, making it a sustainable, beneficial and bottom-up tool to address challenges and empower people to be active agents of social change. In practice, however, the approach has a number of issues:

  • Facilitation: Participatory development uses an array of methods to encourage people to voice their needs, understand the challenges they face and assess their decision-making power within the community, however, it is usually outsiders – whether national NGO workers or staff of overseas agencies – who introduce people to the methodologies, facilitate the process of data collection, analyse the gathered information, and translate it into development projects. This begs the question, is the outcome a true portrayal of power dynamics and people’s needs or are the results appropriated to serve organisational priorities?
  • Power versus no power: Imagine you are a recruit of a national NGO conducting participatory research for a future poverty reduction project in a rural community. You have the contacts of a few people actively engaged in development activities and you invite them to carry out a transect walk and a social mapping exercise to help you identify the most vulnerable people and the poorest households. The community representatives include themselves and their friends in these categories because they are aware that a future project will bring benefits and they don’t want to miss the opportunity. Overlooking local power relations may lead to the empowerment not of the most vulnerable, but of those who already have a dominant position in the community.
  • Participation as a cost: A poor cocoa farmer in rural Ghana is asked to participate in a community discussion for a project targeting poor educational infrastructure in his village. It is October, the cocoa crop year is starting and the farmer is in a hurry to harvest and sell as much cocoa as possible. It is hard to imagine that he would participate in a discussion in which he fears he would only be a passive listener instead of engaging in an income-generating activity that would pay for his children’s school fees.
  • Government through community: The words ‘participation’ and ‘empowerment’ are very common in development discourse. External development agencies may use the participatory approach as a pretext, to interfere in local patterns of decision-making and change practices to ones that are easier to manage, transforming local decision-making structures into ones that are more easily governable by outsiders.
African man holding up jar of honey
Thomas Djangme, bee keeper in Ghana supported by Village Aid | photograph © Village Aid

 

So, what does work?

When projects are sensitive to the cultural, social and political context of the community and the facilitators have an awareness of the critiques of participatory development, they have the capacity to achieve something truly empowering. Village Aid, a UK NGO working in Africa, developed an approach combining the rights-based and participatory methods, and focuses specifically on citizenship building and ‘deep’ political literacy but uses participatory processes that are already present within the community. Village Aid projects are context-specific and facilitate interactive participation which creates a more overarching transformation. People begin to understand their rights and gain an ability to secure them which, in turn, helps them find solutions for their problems without the need for external interventions. Isn’t this the ultimate goal of participatory development?

Find out more about the work of Village Aid here

Read more about participatory development

Feature image: Village Aid


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Colombia: On the Path to Peace?

Colombia: On the Path to Peace?

Colombia has suffered with civil conflict for many years. Here, Gabriela Helm questions whether the recent peace treaty really means peace.

Since the 1950’s, Colombia has been a turbulent country consumed by civil conflict. A war began in protest about social justice and people’s rights fought between left wing guerrillas such as the Revolutionary Armed Forces of Colombia (FARC) and the Colombian Government.  Other groups such as the Leftist National Liberation Army (ELN), The Maoist People’s Liberation Army (EPL) and the 19th of April Movement (M19) are all factions involved in the violent and bloody civil war that has claimed hundreds of thousands of lives. Drug wars, guerrillas, murders, kidnappings, and crime have all become a way of life for the Colombian people who have endured and suffered the civil war for over five decades but is this all finally coming to an end?

On the 23rd of June, a long awaited peace deal was officially signed between President Santos and the FARC leaders.  Although over the last year progress has been made in the form of FARC members laying down their arms and agreements over certain terms of the peace deal, it was still rocky waters until the end. There have been countless setbacks over the years however after 3 years of peace talks which began in November 2012, real change has begun.

Pedro Szekely/Creative Commons License
Pedro Szekely/Creative Commons License

Already in the first half of 2016, before the peace deal was officially signed, the people of Colombia were starting to hear and feel real change. Adverts on TV promote the path to peace whilst showing how many lives have been affected and that everyone should look positively to the future. Numbers of kidnappings and homicides have drastically dropped making the streets of Colombia safer.  The most important fact is that after decades of violence and conflict, the people of Colombia are ready to change.  67% of Colombians asked from 5 major cities said they would go to vote in a plebiscite, and of those 61% would vote in favour of the peace treaty, parts of which have already been made public. That is 4% more than two months ago. We can only expect that number to rise as the people realise peace can now be a much nearer reality.  It is vital that the Colombian people are ready for change, that’s including the Government, the FARC, and other rebel group members.

This is a momentous occasion for the Colombian people, some of whom, have never experienced life without war, however there is still a long way to go. What sort of ‘peace’ can the Colombian people imagine or have they been so desensitised with the war that a mere drop in violence and crime will go unnoticed? For peace to be achieved, do the government now need to help and enable the people to live well and freely? What about improving the standards of living, reducing poverty, and increasing the provision of education? Furthermore, we still need to consider the threat from the still active ELN group.

The ELN, the other major Guerrilla group, seem reluctant to engage in peace talks and already in 2016, they have been involved in numerous kidnappings and bombings. Peace negotiations will not begin unless the ELN cease their kidnappings which proves to be an obstacle in the way of Colombia gaining complete peace from the civil war. With the FARC laying down their arms, this also comes with many risks and could lead to the ELN gaining more power. There is a strong possibility that dissatisfied members of the FARC may aid the ELN by passing over their weapons or even joining the ELN forces if they believe the fight should continue; even taking over regions that the FARC will not occupy. The ELN may see this peace deal as an opportunity for them.

Edgar Jiménez/Creative Commons License
Edgar Jiménez/Creative Commons License

The peace agreement comes after serious talks regarding the many factors which need to be agreed before the country can finally start moving forward. With thousands of combatants involved, their re-integration to society needs to be carefully thought out. So far, 50,000 combatants have laid down their arms with just over 12,000 successfully completing the reintegration program, with another 17,000 working through the process. The process is a long one with all involved, including women and children needing to be re-integrated successfully back into society. In this area it could be said Colombia, so far, has been successful; looking at the figures where over 70% of the ex-combatants are in employment.

For the first time in the last 5 decades, real potential in the outcome of the peace treaty can be seen. Although some issues still remain to be dealt with, the signing of the treaty is something which will bring joy to most Colombians as Colombia’s path to peace has begun. If all is successful, for the people this will mean, less danger, less violence, and more freedom. The civil conflict has hindered Colombian’s development by huge lengths and hopefully with the conflict behind them, the country can now concentrate on finding much needed solutions to its other major problems.


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ISIS: If bombs aren’t the answer what is?

ISIS: If bombs aren’t the answer what is?

Terrorism and conflict are still a constant presence in the 21st Century, the latest expression of which has emerged in the form of ISIS. As cynicism of interventionist foreign policy grows, Raphael Kiyani explores what alternatives could be pursued to end the threat of ISIS.

ISIS, the Jihadist death-cult, has consumed the international discussion with its expansion of power and the many sickening atrocities they’ve inflicted on humanity, both towards Muslims and Non-Muslims alike. Military intervention whether through bombing or boots on the ground is widely considered to be a last option. So a question arises – if bombs are not the answer- what is? Here I shall put forward some practical international actions that could be undertaken to eliminate ISIS.

‘Back’ Assad

By no means a perfect man and this can be viewed as controversial but, it’s fast becoming clear that  the West’s hatred for Assad is scuppering the opportunity to obtain vital intelligence in order to co-ordinate in the region. Take the liberation of Palymra, now freed from the clutches of ISIS due to strategic co-operation between Assad’s Syrian Army and Russia – no carpet bombing, just precision airstrikes that aided the Syrian Army to retake the historic city. Whilst, yes, a few weapons were used through Russian intervention, it was largely a victory by Syrian government forces – demonstrating that putting aside differences with the Syrian President to thwart ISIS can remove the need for mass military intervention.  Secondly, if Assad were to be removed from office, a power-vacuum would occur which would lead to further instability. Many now believe Assad needs to be kept in power to stop ISIS, including UK military chief Sir David Richards.

Quapan / Creative Commons License
Quapan / Creative Commons License

Diplomacy

To end ISIS and the emergence of other terrorist networks, better, more coherent political solutions need to be reached. More pragmatic approaches could be the key to fostering a more stable Middle East including open and genuine dialogue with Russia, China and Iran for instance. New political settlements could very well cultivate a better future for the region without the need for bombing. Various figures in both the political and military establishments are beginning to agree that interventionist policy is not necessarily the answer to terror – From security and foreign policy analyst Daniel L. Davies to former French PM Domininque de Villepin

Back the Kurds

The Kurdish forces already fighting ISIS on the ground are a key ally and non-lethal aid could very well turn the tide in their favour. The International Community could improve their intelligence co-ordination with secure-communication equipment and GPS applications, strategic fighting could be improved with night vision goggles and means of travel could be improved in the form of functioning spare parts for vehicles the Kurdish forces have captured.

Arian Zwegers / Creative Commons License
Arian Zwegers / Creative Commons License

Stop arming ‘Rebels’

So-called ‘Rebel’ groups in Syria funded, armed and trained by The West to topple the Assad regime have been causing instability and violence across the region. In fact numbers of their members and weaponry have made their way to ISIS for financial reasons. It’s clear that vast swathes of ‘Rebels’ are not freedom fighters at all but mercenaries and to continue to support them is, in effect, to support the rise of ISIS. Furthermore, ‘Rebels’ that haven’t joined ISIS aren’t largely fighting them but fighting Government forces in Syria. For Western nations it seems there’s now a question of priority – what is more important? The removal of Assad or the defeat of ISIS?

Re-assess Allies that support Jihadists

Saudi Arabia, Qatar, Kuwait and Turkey are allies that have exported and financed Jihadist ideology across the Middle East. Fresh talks and perhaps even sanctions on the regimes are necessary to stop the spread of toxic Islamic extremism. It legitimises ISIS and fuels their very existence. Turkey is evidently going further than this – fighting the Kurdish forces already fighting ISIS and there is much evidence that points to Turkey directly facilitating the rise of ISIS, including a black market oil trade. Combating this would begin to dramatically cut ISIS off from power and funds.

Putting an end this vile group  – ISIS, ISIL, IS, Daesh – whatever you wish to call them, for good, will involve us taking a good, hard look at our priorities, expanding our range of options and swallowing some bitter pills.

 

 

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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The true nature of Statistics in Development

The true nature of Statistics in Development

Here, Gavin Shepherd provides an analysis of the statistics that underpin the very notion of what constitutes as ‘development’.

Development is a good thing. The idea that people around the world should have access to the same basic standards of living is not a new idea, and is indeed a noble one. People wanting a ‘better life’ is a concept that spans borders, culture and any number of other labels. Development has become common knowledge in so far as everyone believes it needs to happen. This is not a bad thing in and of itself, but questions have to be asked. It is not the why but the how that should be the focus.

The UK, in the year 2015, spent approximately £12,239 million in Overseas Development Aid (ODA), or a ODA: GNI ratio of 0.71%. Great. Governments love large budgets. It means they are doing something, right? However, for all the numbers flashed around there are some hard facts. An estimated 9.6% of the global population live in extreme poverty. Extreme poverty being classified by the World Bank as earning below US$1.90 per day. On the face of it, this can be seen as a victory. The number of people living in extreme poverty is falling. This statement, however, is completely arbitrary. Why is US$1.90 the golden figure. One should factor in Purchasing Power Parity (PPP), currency values and any number of other statistics. Development and data have become synonymous with each other.

Simon Cunningham / Creative Commons License
Simon Cunningham / Creative Commons License

Development has become an exercise in budgetary excess or constraint. The message is drowned out in a sea of currency exchange. Governments follow the maxim that inertia is the worst of evils. If one is not acting, then one is not dealing with issues. ‘If it aint broke legislate anyway’. This is not to say that conventional wisdom on development is working. But infuriatingly it is also not to say that it is not working. The fact of the matter is that it will take time, measured in decades, rather than merely years, to be able to fully assess the impact of the development policies of today. This statement is at the heart of the issue. Governments don’t have decades with which to be judged by. A four or five year, as a broad generalisation, election cycle does not lend itself to long term introspection.

Taking the UK as an example; we see policy being made with the rejoinder that the full consequences may not be fully realised before the end of the governmental term- and of course there is always the chance of a new government changing the whole playing field. This scenario is why statistics have become the end game of development. It is infinitely easier to measure development in terms of statistics as it is easier to quantify the so called results. This leads on to the classification of developed and developing countries, but one amongst a myriad of other classifications.

Fatimeh Nadimi / Creative Commons License
Fatimeh Nadimi / Creative Commons License

This is not to say that statistics do not have their place. They are fundamental to any discussion development, However, statistics are only as solid as the foundation upon which they are placed. Take GDP (gross domestic product) versus the Gini coefficient. GDP are oft quoted as the signifying development, or a lack thereof as the case may be. But, can we say that a country has developed if there is vast inequality amongst its population- which would entail a high Gini coefficient?

Development is a blanket term for many different cooperative and competitive ideas and strategies. Whichever strategy one chooses will determine evidence and outcome. The danger comes when the emphasis is on supporting an agenda rather than development actually occurring. We should always remember the distinction between writing a cheque and taking responsibility.

 


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Tax avoidance and International Development: An Elephant in the Room

Tax avoidance and International Development: An Elephant in the Room

Following the Panama Papers, Aaron Cohen-Gold examines the need to put international tax avoidance at the heart of the development agenda.  

The Panama papers revealed many secrets. The tax affairs of the Cameron family; the hypocrisy of the Icelandic President; the gross behaviour of select Multi-National Companies (MNCs); and the complicity of British territories in tax avoidance schemes worth hundreds of billions of dollars a year.

But one revelation, conveniently overlooked, encapsulates the tale of global inequality better than any other: the sheer number of African businessmen, officials and Western MNCs willingly cheating the world’s poorest continent out of billions of dollars. Consider Uganda, where oil and gas companies diverted $400 million of tax through offshore accounts in Mauritius; or the corrupt Tanzanian ring of officials and businessmen who leaked $120 million of tax from national energy providers; or Kenya’s second most senior judge, linked to 11 different companies in the British virgin Islands worth over $100millions dollars. All this on a continent where 414 million people live on less than $1 a day.

Those on the political right use such observations to call for disengagement from Africa; they question why we should provide aid to a continent being plundered, often most ruthlessly, by its own leaders. On a purely economic plain, divorced from the very real social, health and economic benefits of aid, their frustration is justified.

Matthew Straubmuller / Creative Commons License
Matthew Straubmuller / Creative Commons License

Though estimates vary – often due to a lack of government data – almost every African country loses more than 5% of its GDP in illicit financial flows; indeed, several African countries leak almost 20% of their annual GDP through avoidance and evasion schemes.  For perspective, a similar rate in Britain would mean the annual loss of more than $500bn – enough to fund our NHS five or six times over.

Rather than withdraw from the African continent, the entire world has a responsibility to act for two reasons. Firstly, as a recent UN report discovered, developing countries lose roughly £100bn of tax every year through offshore financial hubs – many of which exist in places like Panama, Ireland, and the British virgin islands. Put simply, as the African Union recently lamented, all the money that leaves Africa illegally ends up somewhere else in the rest of the world.  It is not, in other words, purely an ‘African problem’ from which we can disengage; it is the institutions, countries and laws of the wider world that facilitate this gross injustice. Indeed, the average African tax rate wouldn’t need to be so high on ordinary Africans if the wealthiest paid their fair share and if the world invested in effective tax-monitoring systems in Africa. This is fundamental to the sustainable development of African states. 

Secondly, while the holes in Africa’s financial system threaten to drown ordinary Africans in poverty, it also threatens to render our enormous investment in foreign aid and international development unsustainable. In 2014, a UN Sponsored investigation found that at least twice as much money seeps out of Africa every year through tax avoidance, evasion and criminal activities than enters the continent through foreign aid. Focusing only on offshore tax havens, for every $1 gained through aid programmes, Africa loses $1.30 through offshore trading. In macro terms, the developed world is financing its own tax inequalities – while Africans and African states are plunged into ever-deeper poverty. To be clear, this does not mean that we should cease giving aid. We should do the opposite and invest in the future of ordinary Africans even more. But we can no longer afford to do so without tackling the tax elephant in the room.

Emergency aid, vaccinations and educational programmes are clearly invaluable – and Britain has much to be proud of in this area, particularly in its work under the last Labour government. But unless we empower governments in poor and developing countries to collect the taxes they are owed – without which governments can only borrow more debt to finance public services – we will impose a glass ceiling on the enormous benefits of grass-roots development projects. A healthier and increasingly aspirational population won’t want to remain in countries plundered by global inequalities – they will, as Europe can testify, seek a better life elsewhere. It is for this reason that the UN General Assembly recently described reform of the world’s finance and tax laws as the number one means of implementing the promises in last year’s Sustainable Development Goals.

allispossible.org.uk / Creative Commons License
allispossible.org.uk / Creative Commons License

In turn, this necessitates two conclusions. First, if we are serious about tackling global poverty and inequality – and if we want to successfully develop the world’s poorest countries – international tax reforms have to be at the centre of the world’s agenda. Second, and this cuts to the heart of an issue currently in the minds of many Britons, no one country – not even one continent or free trade area – can tackle this problem in isolation. Indeed, no single problem in today’s world exists in a bubble; we already recognise that poverty rates are intricately connected to conflict, terrorism, corruption, health, and education levels. The same principle should now be applied to how we view international tax avoidance and evasion.

The world of 2016 is interconnected; inequalities are now produced on a global scale. Whether in relation to war, migration, tax or terrorism, this demands more international cooperation than ever before. In the interests of international development, tax avoidance should now form the centre of this discussion. It is in all our interests – especially for those of us committed to social justice – to ensure that we learn this lesson from Panama sooner rather than later.

 

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Implementation – What Is It & Why Does It Matter?

Implementation – What Is It & Why Does It Matter?

Academics and public policy practitioners often spend excruciating amounts of time identifying the most efficient and effective policies. Here Chris Minch discusses that, after all this hard work, an all too common mistake is to neglect the process of implementing these policies.

“Build a better mousetrap and the world will beat a path to your door.”

As the calls for evidence-based policymaking, monitoring and evaluation, and ‘what works’ grow ever louder, the above adage may ring true. Development policymakers and practitioners all over the world are clamouring for innovative and effective interventions.

But actually taking these interventions and turning them into positive results in the real world is an extremely complicated process that is frequently not done well. So how do we ensure that policies or programmes (or mousetraps) will actually deliver results for people in need?

Well maybe we can’t. But to give us the best possible chance, enter: Implementation Science.

Implementation tends to be a word that people bandy about without close examination or thought as to what it actually means. At its simplest, implementation is defined as the way in which a plan for doing something is carried out. It focusses on operationalising a plan – “the How, rather than the What”. It can refer to the delivery of any policy, service, or intervention.

Ed Schipul / Creative Commons License
Ed Schipul / Creative Commons License

However, successful implementation involves overcoming challenges at multiple levels of society. This makes it very difficult. Implementation Science, then, is the study of the best methods for improving the quality of implementation. Essentially, it formalises learning from good and bad examples of implementation, using it to guide practitioners to successfully overcome these challenges and convert innovations into positive results.

Apart from making logical sense, how do we know that focussing on implementation actually makes a difference? Numerous policies and programmes have been hyped as the next big thing in development before failing to deliver on their promise and being swiftly dismissed as fads (think of the Washington Consensus).

Granted, some of these ideas may have been junk. But it’s also likely that many failed to jump the ‘implementation gap’ – the original research was good but when trying to scale it up or apply it in different contexts, it wasn’t implemented correctly. For example, one study has found that controlling issues relating to the implementation of a service (in this case, an intervention to prevent youth substance abuse) would have made the intervention 12 times more effective.

Microfinance for development provides an informative example. It originated in 1970’s Bangladesh, where Professor Muhammad Yunus established the Grameen Bank. The Bank aimed to deliver small loans to impoverished people who could not supply any collateral, thus giving them more opportunity to set up/expand income generating activities. The idea was deemed so influential that, in 2006, Yunus and the bank itself were jointly awarded the Nobel Peace Prize.

However, the actual impact of microfinance has subsequently been questioned and the general feeling is that it has failed to live up to its potential. Part of the reason was the rapid deviation from the Grameen Bank’s original, donor-funded model. The political and ideological shift towards neoliberalism in the 1980’s and 1990’s caused microfinance to adopt a commercial model that aimed to create self-sustainability through higher interest rates, private ownership and profit-driven incentives.

Mediamolecule / Creative Commons License
Mediamolecule / Creative Commons License

The result has been a loss of fidelity and the overreach of microfinance into areas beyond its remit. Loans have been provided to groups of people who are, for a multitude of reasons, unable to invest it in productive or entrepreneurial activities. This leaves them with ever-increasing debts that they have no hope of paying back. Further, microfinance institutions have failed to anticipate that demand for microcredit is limited. As a result, new firms moving into the sector have simply displaced old ones, adding little value in terms of jobs and investment. The system is not achieving its full potential.

As one webpage states: “the core of microfinance programmes go beyond mere access and distribution of money, to deeper issues of how money is utilised”. As such, there is a need to avoid a one-size-fits-all approach and instead identify suitable product types for specific contexts. There is a need to identify community leaders and groups who can take responsibility for managing and informing microfinance projects. There is a need to accept that microfinance has limits and should not be rolled out universally.

Implementation Science can help to uncover some of these deeper issues and provide important insights into dynamic factors such as leadership, capacity, learning from experience, evaluation and communication. Future posts will cover some of these elements in more detail and seek to show that, whether it’s microfinance or mousetraps, Implementation Science has a role to play in realising the innovation’s potential for positive change.

 

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Private entities in the development sector

Private entities in the development sector

 The International Development sector has grown considerably in recent years. Here, Jesus Rodriguez argues that despite the much needed extra funds, greater accountability and transparency are also needed to prevent the misuse and misallocation of vital resources.

International development is slowly becoming more and more popular, the rise of NGOs, big and small, private donors and foundations, and the subject is becoming more widely offered at undergraduate level. What used to be a fairly niche area of knowledge and research is beginning to open up more as money is entering the sector and funding more projects and opportunities, which is ostensibly a good thing. Yet one must wonder whether such an influx and growth of private agents in development is necessarily a good thing insofar as these actors naturally have wants and goals. Therefore with increased funds comes a greater amount of control, interest, and specific agendas. Though the same questions can be asked of foreign aid that is a separate issue for a separate post. The decision behind examining the private sector follows from the recent influx of these actors and because they do not necessarily have to follow the same protocol as other actors in the development community. In this piece I will be discussing the growth of private agents/contractors and analyse their performance through the case study of USAID’s use of private contractors in Haiti. This piece will argue that while greater funds will always be welcomed in the development sector there must be careful regulation and monitoring in regards to how actors that gain access to these funds function, to prevent negative outcomes.

As more money has been poured into development it has become more lucrative as a sector, prompting the growth of private contractors working on behalf of governments. Private organisations are often used by governments as subcontractors to state mandated development initiatives. The rationale behind this is that as private contractors compete for opportunities they will strive to achieve the best result possible at the lowest price, yet this is not necessarily the case in reality.

US Army Africa / Creative Commons License
US Army Africa / Creative Commons License

The example of USAID’s efforts in Haiti’s long term development in the aftermath of the 2010 earthquake perfectly encapsulates this. USAID functions as described above, used a number of subcontracts to fulfil different goals, yet in this case the majority of the work contracted went to one specific subcontractor, Chemonics International, a private international development company. To be brief the results were appalling, millions were spent on unnecessary facilities while thousands were without the bare necessities, with perhaps the most damning evidence being the multi-million dollar industrial park with air-conditioning, running water, and electricity while the local town had none. Though Chemonics professes to have been wholly participatory in their approach, local officials’ testimonies do not agree and there is little evidence to support Chemonics’ claims. This occurred owing to the way the contract had been set out. It had been done in such a way as the majority of the 25 page contract was redacted, making it impossible to audit or hold the company accountable.

A similar pattern is found with other subcontractors used by USAID, who are essentially allowed to operate without any real accountability while receiving funds. This leads to more money being spent than necessary, beneficiaries not receiving what they need, and the damaging of the international development sector both in reputation and in the field through the perpetuation of sloppy groundwork. If one thing can be taken with this example it is that the agenda and incentive for profit making has overpowered that of wanting to provide benefit to others.

Mediamolecule / Creative Commons License
Mediamolecule / Creative Commons License

Though the wants for profit and development are not necessarily opposed, the incentives behind both can be counterproductive, especially if followed like in the example above. Should the functioning of private contractors continue like this, it is worrying what the future of development will look like. For any policy initiative to be successful there must be adequate regulation and accountability, without this there is little incentive to act according to demands. In the public sector we have elections and clear pathways of progression. Without mechanisms such as these private entities will continue to act as they please as there is little alternative in subcontracting if all organisations function in a similar manner.

Accountability mechanisms specifically for private contractors could include reinforced contracts with clauses of accountability that could invoke legal action if they fail to act appropriately and greater transparency regarding these government contracts; allowing all to scrutinise these actors and adding to a larger dialogue concerning how development contractors should operate. That being said we are still in the relatively early days of private entities acting in the development sector, though it is possible that they may be able to function effectively, early indicators are not too promising.

 

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Is Panama the Tip of the Iceberg? Economic Crimes and Environmental Crimes have been rife in Developing Nations for Decades

Is Panama the Tip of the Iceberg? Economic Crimes and Environmental Crimes have been rife in Developing Nations for Decades

With the revelations of the scandalous Panama Papers, Luke Humphrey looks at the detrimental effect of tax avoidance and other economic crimes outside of the Western World.

Last month the world got a glimpse of the secretive and complex economic arrangements set up by some of the developed world’s most powerful people. However these economic crimes (or economic immoralities as they may also be known) not only effect developed nations, but developing countries such as Zambia, Somalia and the Democratic Republic of Congo (DRC) as well.

It’s no secret that in developing countries and failed states fraud and bribery amongst political figures is common, however we now have irrefutable evidence that it is perhaps just as common in developed countries as well. The actions of many Northern companies such as Associated British Foods, Walmart, Primark and Shell all committing economic and social crimes in developing countries due to them having little regulation and law on tax, health and safety and environmental degradation.

The Weekly Bull / Creative Commons License
The Weekly Bull / Creative Commons License

Perhaps one of the most famous tax avoidance crimes was by Associated British Foods, depriving the Zambian government of millions every year through lucrative tax loopholes involving tax havens in Ireland, Mauritius, Holland and Jersey ultimately ended up paying “virtually no corporation tax”. According to The Guardian, this has seen Zambia lose up to $27 million in tax each year from Associated British Foods. The avoidance not only damages the Zambian Government, but also locals in the surrounding area, who have to compete with a sugar trade giant which creates pre-tax profits of up to $123 million each year. This story is common in relationships between developing countries and Northern companies. However, the main reason this story came to light is due to ActionAid finding evidence of the Associated British Foods tax avoidance. So much like the Panama Papers, these companies can only be held to account once someone has spent years trying to unravel and release their economic crimes (and even then, as seen with the Associated British Foods case, and almost every other story of tax avoidance by the world’s most powerful, little is done to hold them to account for their actions).

Whilst in the UK we are calling for our MPs tax returns, people in Zambia, the DRC, Nigeria and Somalia have no voice to demand answers from their political and economic elites. But it’s not just tax avoidance these developing countries suffer from as a result of exploitative relationships with some of our best known brands. European and Asian trawlers are often accused of raiding and plundering fishing stocks off the coasts of Somalia and Senegal due to their unregulated surrounding sea. Elsewhere oil companies are accused and under investigation for various crimes including toxic waste dumping by oil trader Trafigura in the Ivory Coast – ending up in a €1 million fine for unlawfully dumping. In Nigeria, Africa’s largest oil producer, pumping out 2.5 million barrels of oil per day, 12 foreign oil firm executives came under investigation in 2011 by the country’s Economic and Financial Crimes Commission due to alleged bribes of up to $100 million. There is no doubt that in these countries, and many other developing nations, Northern companies exploit their lack of voice to commit economic crimes similar to those that have occurred in Nigeria, Zambia, Somalia, the DRC, Ivory Coast and many more.

Dominic Alves / Creative Commons License
Dominic Alves / Creative Commons License

But why these countries? Unlike Panama, Mauritius or Luxembourg, these countries aren’t considered tax havens where the richest of the world can hide away secret bank accounts. These countries do usually have tax legislation on income, inheritance and corporations, which are enforced across the nation. However these are some of the most fragile and instable nations in the globe – Somalia and the DRC alone are often referred to as ‘failed states’. Therefore bribing political officials, dumping toxic waste or funnelling pre-tax profits to tax havens is easily done, as the people and governments of these countries have little, if any voice on these matters. Like Panama, it is the richest white-collar workers who elevate themselves above the law, feeding on loop holes and insecurity. Yet in the cases in Zambia, Nigeria, Somalia and many more, the people cannot demand answers and force tax return information to be made public, subsequently pushing out the political elites who have committed these crimes like we have seen in Iceland.

So when considering the effects of the Panama papers and tax avoidance in the UK-which is estimated to cost HMRC £16 billion a year – we also have to consider the damning amount of exploitation of fragile and unstable states around the globe who have no say on the actions of their political and economic elites. Economic crime by the world’s most powerful is not just a crisis for the developed world, but for the world’s poorest countries as well.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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What Is Left To Discover in Development Practice and Why Do Alternative Theories Rise and Fall So Quickly?

What Is Left To Discover in Development Practice and Why Do Alternative Theories Rise and Fall So Quickly?

Neoliberalism has been the dominant ideology in development since World War Two. Luke Humphrey analyses the ideology and critiques its influence upon more modern development theories.

Ever since development theory became a popularised academic study after World War Two, there has been specific periods of varying development practices from the beginnings of Neoliberalism in the 50’s and 60’s to human rights based approaches in the 90’s. Every decade or so brings in a new wave of development thought, changing perceptions and ideologies on how to best develop. However as development becomes more and more contested with concepts of participatory development, gender mainstreaming and environmental development to name a few, why does neoliberalism still reign as common sense in economic development?

Strategies such as post-development, participatory development and gender mainstreaming have simply not been explored and implemented properly. Neoliberalism encapsulates so much economic development rhetoric because those who believe its ideology follow it so stubbornly and with so much conviction that in institutions such as the World Bank and IMF, it is unquestionable common sense. It has dominated the development paradigm for decades and every development theory which has tried to enter the mainframe since has been hampered by neoliberalist dominance. New alternatives to development such as post-development theory which is championed by Arturo Escobar and Wolfgang Sachs posed that the Western ideals of privatisation and market-led economic growth were specifically in line with their political ideologies of what it meant to be developed – material wealth, job security and property. Therefore most neoliberal development schemes have failed to achieve any support or backing from local indigenous people in countries like Bolivia, Ecuador or Peru. So the right course of action is to focus on development which is considerate of indigenous land rights and traditions, building on the societal systems they have already created and hold dear.

Heinrich-Böll-Stiftung / Creative Commons License
Heinrich-Böll-Stiftung / Creative Commons License. Photo of Wolfgang Sachs.

This new development theory could have revolutionised the practices that NGOs and INGOs conducted in developing nations in the 80s and 90s. However the most powerful development institutions continued the constant peddling of neoliberal development through Structural Adjustment Programmes and Poverty Reduction Strategy Papers which forced developing nations to completely restructure their economies in favour of market fundamentalism. The criticisms of post-development was that it was too generalized about the current development paradigm in that not all neoliberal development had been disastrous for the countries it had been implemented in, and that post-development was non-progressive and oppressive of values. But these ‘oppressed’ are the same values that have been tirelessly pushed into development theory until it is the only legitimate choice. What Escobar and Sachs tried to explain was whilst some developing nations such as India, South Africa and Brazil may embrace the materialistic value of neoliberalism (at high social and traditional costs), many South American states not only reject those values on a local level, but also at a state level.

This is one example of many. Whether it be Post-Development, Gender Mainstreaming, Participatory Development or Human-Rights based development, all have either been remoulded to fit the neoliberal development sphere (subsequently losing their objectives and meaning) or they have been rejected because they simply can’t fit into this neoliberal world. But the facts are that no other development method has been pushed further than neoliberalism, along with its materialistic Western values. So how is any other theory supposed to be implemented, when neoliberalism not only dominates development theory, but our core values and ideologies upheld in the majority of large international institutions which are actually capable of making a change on a big scale?

International Monetary Fund / Creative Commons License
International Monetary Fund / Creative Commons License

Ultimately this isn’t a case of neoliberalism vs the world, but a political and cultural battle of deregulated capitalism that is constantly sold as our only viable option in large scale development, against theories of local knowledge, protecting traditional rights and bringing gender into the forefront of development. Neoliberalism has created false hopes for many developing nations of deregulated, market-led growth which hasn’t really developed a single economy since World War 2. Any country which has developed in the past half century has followed their core economic beliefs with a mix of protectionism and deregulated capitalism (South Korea, China, India, Singapore, Hong Kong, Malaysia – the list goes on). It is the countries that hold out against capitalism the longest, protecting their economies until they are strong enough to compete with the Western world, that have grown consistently and have lost the least from the seemingly consistent financial crises. To truly have a diverse and balanced field of development theory it is not neoliberalism that has to be tackled, but the whole framework and ideology of materialism and market fundamentalism that must be confronted powerfully.

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Military and security forces: the problems with the new international aid workers.

Military and security forces: the problems with the new international aid workers.

Recently changes have been made to what constitutes as foreign aid. In this article, Sam Wigglesworth questions if military and security spending should be incorporated within aid budgets.

The OECD has officially redefined what foreign aid means after the UK lobbied to be allowed to use overseas aid budgets to support the military and security forces in fragile countries “as long as this still promotes development goals.”

Additionally, the OECD has said that “tackling violent extremism [will be] formally recognized as a development activity”

This isn’t to say that tackling violent extremism shouldn’t be recognized as a development activity. Studies tell us that areas that suffer from poor social and economic development create an environment where violent extremism is more likely to flourish. The recent General Assembly meeting of the United Nations just echoed a similar opinion, hearing that “the deadly links between violent extremism and extreme poverty could be broken through the creation of jobs, a reduction in inequalities and by building just and inclusive societies.”  This all falls under the remit of development, or more officially, official development assistance (ODA) which is “government aid designed to promote the economic development and welfare of development”. However, the argument lies in whether the military and security forces are the most suitable institutions to be concerned with this goal.

Ultimately it’s a move that charities fear will lead to less cash being spent on directly alleviating poverty and instead give nation’s carte blanche use these funds to serve their own “domestic and foreign policies” reducing the capacity of development assistance to promote economic development. It is a reality that may fearfully come to pass, as the long history of foreign military involvement in a sovereign nation has rarely helped to promote any real economic or social development in a fragile state, arguably because this isn’t what a military is for. It serves a purpose, often one involving the protection of national interest which rarely serves the interest of another state, regardless of the somewhat aspirational names given to military interventions (Operation Uphold Democracy and Operation Peace for Galilee to name but two).

DFID - UK Department for International Development / Creative Commons License
DFID – UK Department for International Development / Creative Commons License

 

Additionally, there is the argument to be made that the increasing use of drone warfare and airstrikes in military operations, one of Obama’s lesser accomplishments, makes the institutions who partake in this type of warfare as wholly unsuitable to be aligned with any sort of realistic development goals. While the establishments justifying these operations argue that this new type of warfare is highly effective, with the ability to target select “individuals, automobiles and sections of structures such as rooms in a large house” with minimal harm to non-combatants, this evidence is optimistic at best, according to articles and data compiled by news organizations such as the Huffington Post and the Bureau of Investigative Journalism. Moreover, the CIA itself has acknowledged that drone strikes and other “targeted killings” of terrorist and insurgent leaders can in fact “strengthen extremist groups and be counterproductive.” Additionally, this type of warfare has made it increasingly difficult for humanitarian groups to operate, given the ambiguous status of armed drones under international law and the classified nature of their operations. By this logic, the military and security forces are barely the best solution to tackle the terrorist threat, let alone as the institutions most likely to promote economic development in a fragile state.

Furthermore, the problem of granting security forces and military of a foreign state by virtue of their sole presence in a sovereign nation can often undermine any confidence citizens have in their own government, yet again limiting their capacity for achieving economic growth. While often inefficiency and corruption plague fragile states government bodies, the reality is strong governance and institutions are vital to ensuring development aid. If these mechanisms were strengthened instead of undermined, overseas development assistance could be used more effectively. Additionally, in fragile states, a country is less likely to become a breeding ground for destabilizing terrorist activities. Should there be overt interference by a foreign military body, any possibility of achieving stronger governmental institutions is destabilized and legitimacy is lost. Either the more liberal factions were unable to stop the foreign forces entering their sovereign borders or it was implicitly allowed.

DFID - UK Department for International Development / Creative Commons License
DFID – UK Department for International Development / Creative Commons License

 

The probability of the military and security forces impacting a specific demographic also makes them unsuitable to be concerned with economic empowerment in fragile states. Women and girls are acknowledged to be “uniquely and disproportionately affected by armed conflict’ and this sentiment was echoed famously by Major General Patrick Cammaert who stated: “It is now more dangerous to be a woman than to be a soldier in modern wars.” This reality makes post-conflict reconstruction and development in fragile states difficult and reduces the capacity for women to drive forward peace initiatives that can promote development, peace and security. The United Nations recently undertook three peace reviews which reflected the “indisputable” evidence of the impact of women’s participation and leadership on the “increased effectiveness of humanitarian assistance and likelihood of sustainable peace.” However, if we are diverting funds to the very institutions that can play a massive role in limiting the development of women’s work in post-conflict reconstruction, we undermine a sector of the population who can drive forward peace in fragile states and encourage economic investment and development.

Yet the establishment institutions fail to give any evidence contrary to their own the proper recognition, and yet again, as it always inevitably does, the focus shifts to more military and security minded resolutions to achieve development goals. Ultimately, this makes the reality of achieving any sort of real progress with regards to poverty reduction and economic growth minimal. Instead, it’s far more likely we are condemned to spend a few more years chasing our collective tails, trying to work out why, for all our resolutions and commitments, development progress remains static and foreign policy as intrusive as ever.

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Lessons from Africa (Part One)

Lessons from Africa (Part One)

China Pakistan Economic Corridor (CPEC) is generating euphoria in Pakistan. In the first part of the two part series ‘Lessons from Africa’, Asad Abbasi briefly looks at the global context of CPEC. 

The China Pakistan Economic Corridor (CPEC) is set to be the biggest investment of any kind on infrastructure in Pakistan. By 2030, China will invest a total of $46 billion in energy, transport, fibre optics and Gwadar port. It forms part of the 3,000 km corridor that China is building with the aim of reducing the transportation time of oil and goods from the Middle East from 12 days to 36 hours.

CPEC has brought euphoria in Pakistan. A recent survey shows that the ‘majority of people (in Pakistan) believe that China-Pakistan Economic corridor (CPEC) will have a good impact’. The Prime Minister of Pakistan has called CPEC the ‘future’; the President has called it a ‘benefit to the region’, while the Chief Ministers of Punjab and Sindh have hailed it as a ‘gift’ and ‘life line’.

IAEA Imagebank / Creative Commons License. Picture of Pakistan's Prime Minister Nawaz Sharif (Right).
IAEA Imagebank / Creative Commons License. Picture of Pakistan’s Prime Minister Nawaz Sharif (Right).

Above all, Chief of Army Staff, most powerful man in the country, has vowed to protect CPEC and is making ‘all the efforts’ to ensure its success. It is likely that no less than ten thousand special security troops will be placed to protect ‘CPEC projects’.

Is it the titillation of $46 billion that excites everyone? Is development for all automatically guaranteed with this investment? The first question is perhaps rhetorical, but the second is important. I address it by looking at China’s investment in Africa, which shows that if proper institutions are not built and workers are not protected then economic growth will foster severe inequality.

China Pakistan Economic Corridor (CPEC)

In Pakistan, CPEC is advertised as a prelude to growth and development.There are reservations from political parties, who fear that Punjab, province of ruling party, will get superfluous share of the wealth and insist a ‘rightful’ share of CPEC investment should be divided among all provinces However, as all parties are keen to take advantage of CPEC, it is likely that a resolution will be found in the near future.

nznationalparty / Creative Commons License
nznationalparty / Creative Commons License

 

For Pakistan, CPEC might represent ‘prosperity’, ‘unity’, etc., but for China it is just one small part of Yi Dai Yai Lu. This is usually translated into English as “One Belt One Road” (OBOR) but according to Tim Summers, senior consulting fellow at Chatham House, the English translation fails to convey the dynamic meaning that the phrase encapsulates. Yi Dai Yai Lu conjures up two different epochs of Chinese history: Silk Road of Tang Dynasty (618-906 AD) and modern silk maritime trade routes from coastal China. The aim of the project is to connect China with 65 countries in Asia and Europe. China estimates that OBOR will add $2.5 trillion to its trade over the next decade.

The recent fall in local demand means that Chinese factories are producing more than they sell at home. This ‘overcapacity’ of Chinese firms means that China needs to look elsewhere to make efficient use of its capital.  One Belt One Road provides opportunities for Chinese firms to invest abroad. PwC estimates that since 2013 ‘projects worth $250 billion have already been contracted’ to Chinese companies. In future, OBOR will bring even ‘more investment opportunity for Chinese enterprises’.

There is one problem—trust. There are many reservations about Chinese investment. The Heritage Foundation estimates loss of deals worth $200 billion due to ‘nasty surprise of some sort’. Some say it is because stakeholders in many countries do not trust state-funded Chinese investment. China will have no such complication in Pakistan, particularly as the two countries have been developing an increasingly cosy relationship for some time. Investment risk will be minimal since it is closer to home and Pakistani Army has vowed to protect it, so CPEC is a win-win for Chinese corporations. Is it also win-win for Pakistan?

 
This article was originally published on the London School of Economics South Asia Blog and is reproduced with the writers permission.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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The West boasting Gender Equality to the developing world – throwing stones in a glass house

The West boasting Gender Equality to the developing world – throwing stones in a glass house

Gender mainstreaming has been the buzz word in the international development sphere for the past two decades, but has it actually achieved anything? Luke Humphrey questions whether the West’s boasting of their ‘gender equality’ has led to its failure in the developing world.

Over the past few decades we have seen all manner of attempts to embrace different approaches by numerous development institutions. From human rights to grass roots to participatory development, all have had their merits and failures. However now what seems to have taken the development reins is ‘gender mainstreaming’ (the institutionalisation of gender in development practices). Now it’s not to say that gender equality and feminism are not vital to development, it doesn’t take a genius to work out that if you do not aim to achieve gender equality, you are excluding half of the population. But the way Western institutions boast this idea of gender mainstreaming comes from a misinformed and hypocritical stance that we, the West have achieved gender equality.

Let’s start with the basics: women on average get  .  A shocking statistic, but even more so when you consider that in the developing countries, The UK is no great exception; their pay gap is in line with the rest of the developed countries – just under 20%. Surely in politics we fare better? Only 29% of our MPs are female, yet in In fact the UK is worse than many ‘third world’ countries including Bolivia, Senegal, Namibia, Mozambique, Ethiopia, Burundi, Tanzania, Uganda, and Zimbabwe. Only 9% of executive directors are women, only 7% of chief directors in the FTSE100 are women and 12% of jobs in the STEM sector are held by women.

 

jrf_uk / Creative Commons License
jrf_uk / Creative Commons License

 

Dr Lata Narayanaswamy – a highly respected and one of my favourite lecturers at the University of Leeds wrote an article for the online magazine ‘Girl’s Globe’ in May 2014. In this she discussed her experiences growing up being taught that menstruation was “unclean” or “polluted” and that she was “untouchable” during it. What is perhaps most eye opening in this article is the fact that this didn’t happen in some third-world country but in Toronto in the 1980s. But this is what we are to believe isn’t it? That things like that don’t happen in Western societies and if they do its only rare, extreme cases. Yet here we have a case more common than we would care to admit, where a girl of only 11 has been taught by (educated and well respected) parents, that a normal and regular body function is unclean and shameful.

Only a few weeks ago Labour MP Jess Philipps was heavily criticised for her comments about rape culture in the UK in comparison with the Cologne sex attacks on New Year’s Eve. The Daily Mail were filled with outrage, citing “furious responses” from around 3 or 4 twitter users – the equivalent of all of Birmingham according to them. Yet the latest rape statistics show the past year to have the most reported rape and sexual assault crimes since records began in the UK. Of the 88,106 reported rape crimes, victims were most likely to be between 15 and 19, and of the total number of women raped, 30% were under the age of 16 and 25% under the age of 14. So why, in a supposedly developed country which claims the authority on gender equality to preach it to others, is rape and sexual assault on the rise – and most predominantly happening to underage people?

European Parliament / Creative Commons License. Picture of International Women Day 2012.
European Parliament / Creative Commons License. Picture of International Women Day 2012.

 

This is something intrinsically linked with why this approach of ‘gender mainstreaming’ is not in line with the feminist ideology which has pushed it so far into development practice. In many cases the ideas of gender equality have been reshaped and distorted to fit the neo-liberal policy which the World Bank and DfID seem intent on ramming down our throats. By approaching gender development with a neo-liberalist perspective, these organisations fail to understand the unique structure of inequality in each country. Gender mainstreaming for projects in Bolivia (the country with the 2nd highest female to male MP percentage) has arguably worsened equality in local politics. This is because previously feminized community spheres have been opened to men, leading to previously all-women organisations, to become organisations dominated by men (as argued by Suzanne Clisby). Since the 1995 Beijing World Conference on Women where gender mainstreaming was introduced, gender equality in nations like India, Bolivia and Afghanistan has continued to stagnate or regress. Market-led development undeniably increases gender inequality and that is what we continue to see.

If gender equality is to be truly tackled, the developed world must first look internally to see where they are failing, understand that the structures of inequality are unique to each country and that neo-liberal gender mainstreaming will never achieve true gender equality in any country – developing or developed.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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The Refugee Crisis: The Shame of Europe

The Refugee Crisis: The Shame of Europe

In the days that followed the death of Aylan Kurdi, there was a global display of grief, horror and outrage at the human cost of the refugee crisis. Even tabloids which had previously published notoriously (and vulgar) anti-immigrant sentiments, joined the chorus of voices demanding something be done to ensure an end to the death and misery of those making the perilous journey. Two months later, the Daily Mail published a cartoon of refugees storming the borders of Europe, accompanied by rats. The image encapsulated what the UN high commissioner for human rights described as “sustained and unrestrained anti-foreigner abuse, misinformation and distortion” from the British media. However, I believe the hostile response to refugees goes beyond this. Bias against foreigners is entrenched in the political establishment of Europe, which often targets migrants as a means of distracting from domestic policy failures. This results in the prevalence of anti-immigrant attitudes. Now, over a 120 leading figures from the field of economics and international organisations have signed a letter, condemning the woeful response of the British government to the refugee crisis. It is these views I wish to echo and support, as I believe this is a fundamental moral issue which is shaming Europe.

Firstly though, I would like to confront the economic arguments, which are often used by anti-immigration zealots, as a means to justify opposition, which in such circumstances, would otherwise be deemed as callous. Even in one of the most open and liberalised economies in the world, free movement of labour is contested within the mainstream political establishment. The adverse impact of migrants on the economy was a key theme of the Home Secretary’s Party Conference speech this year. However, I believe such views to be empirically wrong. Consider every great hub of developed economic activity across the world today. From New York to Hong Kong, we notice that every advanced region has at some point in their history experienced an influx of migrants. Regardless of the reason, be it war, famine, persecution, modern human history is abundant with examples of mass migration. In the days prior to the industrial development, economic conditions were intrinsically linked to population size. Agriculture has diminishing returns, so the more people working on a single plot of land, the less production there is. Industrial, capital based production however is different. We have constant or increasing returns. For each additional unit of labour and capital, the production increases either proportionately or even more rapidly. In essence, a developed society can sustain increasing populations, providing resources are available.

Kosovar refugees fleeing their homeland. [Blace area, The former Yugoslav Republic of Macedonia]. United Nations Photo / Creative Commons License
Kosovar refugees fleeing their homeland. United Nations Photo / Creative Commons License

This leads to the next line of argument, which I’m basing on the theory of circular and cumulative causation. Assume we have two regions within one nation, and suddenly one finds itself more prosperous, leading to increased wages. This will attract migrants from the other region, and as they arrive they enter the work force. The demand they bring to the economy, and the labour they provide encourages increased production, which stimulates profit growth. Profits are re-invested back into production, causing further expansion, creating more employment opportunities. Firms are attracted to the region, as it is close to a thriving consumer base, and a large pool of potential labour. The increased population results in greater tax revenue for the government, which leads to higher spending on public services such as education and health, as well as the local infrastructure. This does more to appeal to wider business, while improving the productivity of the local population. In effect, success drives success, and the influx of labour is vital for this process. In a dynamic and advanced capitalist economy, resources flow to where there is demand and prosperity. Ultimately this results in a scenario where a developed nation can sustain larger populations, through the simple fact migrants stimulate the growth which attracts resources in the first place. In addition to this, Europe has further incentive to welcome refugees, given that the region is facing an increasingly ageing population. In short, there are plenty of economic reasons to welcome refugees.

However, development economics is not just about monetary gain. Arguably the primary aim is to eradicate poverty. Amartya Sen, the celebrated economist and philosopher, once described poverty as the “deprivation of opportunity”, and by treating refugees with the contempt we have seen, we are not only accepting poverty, but supporting its continuation. The arguments of our government and many across Europe do not stand up to the scrutiny of economic analysis. By refusing to help those in Europe or offer the safe and legal routes to safety every human should be entitled too, we are not discouraging fleeing refugees. In every case of migration there are push and pull factors. The government is ignoring the intolerable and brutal conditions which are pushing people from Syria and other war torn and economically destitute nations to seek refuge in Europe. Refugees don’t base their decision on the welfare system of Europe. In fact, you’d be hard pressed to argue that the average refugee has a comprehensive knowledge of the vastly different welfare systems that exist across Europe. Instead they come because Europe is held as a beacon of human rights, civil liberties and economic prosperity. In neighbouring states, refugees find safety, but no opportunity. In Lebanon for example, to maintain residence, refugees must sign pledges to not work. Without the chance of bettering their lives, or providing their children with an education, they become forced to pursue refuge elsewhere.

DFID / Creative Commons License
DFID / Creative Commons License

 

The British government policy to reduce the scale of rescue operations in the Mediterranean was implemented based on a similar premise that this would act as a deterrent, yet the bodies continue to wash ashore. This should be enough to warn us that such a strategy is doomed. All this idea will achieve, is to push desperate refugees further into the hands of people smugglers and other clandestine activities, which endangers their lives, and makes the situation even more difficult for Europe to effectively deal with. Following the line set by the aforementioned leading economists, I believe it is time Britain acts to take a fair and proportionate share of refugees and establish safe, legal routes into the EU. We will not solve this crisis through inaction, in the hope it will just disappear. Now, more than ever is the time for Britain to display its humanity. Some believe what we are doing currently, to be enough. When refugees are giving tags to wear so they can eat, some would point out this is better than what they had. This is an awfully low bar to set for ourselves. If we ever hope to one day achieve universal development, we can’t strive to be better than our worst. Only when we can exceed our best expectations can we feel pride in how we have helped those in need. Only under a humanistic approach to refugees, migrants and human life in general can we achieve universal economic development.

By Dean Hochlaf

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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The Role of Tax in Developing Countries

The Role of Tax in Developing Countries

Increasing the amount of tax collected in developing countries is crucial for development. Here, Joanne Rolling argues that tax revenue has a wide array of benefits: spurring infrastructure, strengthening the social contract, and encouraging good governance.

Tax tends to be a rather technical and niche issue. Due to its niche status, it can easily be considered to be obscure or unimportant in the larger debates on humanitarian aid and development. Yet this is a mistake because development requires money to finance it, and money must be acquisitioned from somewhere. Hence there needs to be increasing discussion of the role of tax revenue in international development because it is a vital, yet often absent, component of advancement.

The current situation shows that low-income countries typically collect taxes of between 10-20 percent of GDP, while the average for high-income countries is more like 40 percent. Clearly there needs to be an organised effort to help developing countries increase their tax revenue to match a similar level as developed nations. The current problem we have in the global tax system, which affects the developing world particularly acutely, is one of chronic unfairness as businesses that can afford to pay are failing to do so. The issue can be outlined by the findings from a report commissioned by Concord. Concord, the European NGO confederation for relief and development, found that in tax revenue alone, at least $100bn was lost from developing countries through insufficient international tax policies. One example study found that if corporations paid fair amounts of tax, Honduras could “increase healthcare or education spending by 10-15 percent if the practice of profit shifting by US multinationals was stopped”. Multinational companies are evading social responsibility through their failure to contribute little or no tax. Corporate tax evasion strategies, referred to as ‘base erosion and profit shifting’ (BEPS), can be done through measures such as transfer pricing manipulation. Global Financial Integrity in Washington estimates the amount at several hundred billion dollars lost annually due to transfer mispricing.

 

Steve Rhodes / Creative Commons License
Steve Rhodes / Creative Commons License

 

There are various methods and types of taxation both for individuals and businesses and corporation tax is not the only potential avenue. The Africa Research Institute produced a paper arguing that property tax would benefit the African economy in raising revenue. They write that, “property taxation is widely regarded as highly progressive and equitable because the sum due is determined by wealth rather than being a percentage on transactions.” This ‘wealth’ tax is another potential strategy in which those that can afford to pay more, do so, and hence can help to build national infrastructure such as social housing through tier tax contributions.

There are several reasons for wanting to encourage global taxation. First of all, the implementation of domestic taxation allows developing countries to begin to finance their own infrastructure and hence to take control of their national development. In theory at least, higher tax revenues should mean that the state is able to invest and deliver a comprehensive range of public services such as schools, hospitals, the police force and social security. This allows a country to move from dependence on foreign aid and to a more sustainable and long-term approach to development. Moreover, the 17 Sustainable Development Goals set as part of the 2030 Agenda require a huge amount of financial investment. In order to fund the ambitious targets of the SDGs, developing countries can contribute through raising tax revenue at home.

Global Alliance for Tax Justice / Creative Commons License
Global Alliance for Tax Justice / Creative Commons License

 

There is also a deeper sociological reason behind taxation. Taxes establishes a certain social bond between the individual and the state. With the notion of the citizen and the state engaged in a ‘social contract’ comes the responsibility of the individual and the government to cooperate and participate in good governance. This issue of good governance, in the form of Government transparency and accountability in handling tax revenue and spending it in the benefit of its citizens, must also be a priority in addressing the economic situation of developing countries. Establishing a process of taxation could help stimulate and regulate good governance in developing countries. One practical way in which developed nations can empower the developing world to take charge of their own welfare is through such things as training and equipping tax inspectors, investing in institutional infrastructure, ensuring tight legal regulations, and supporting civil society groups.

Global tax justice is an issue which deserves much more consideration than it currently receives. By setting up a collaboration between Governments, tax experts and NGOs and adopting practical strategies around domestic taxation, the developing world can make progress in steering their own development in the international community.

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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A Defence of Foreign Aid: Why we need Global Development

A Defence of Foreign Aid: Why we need Global Development

During a time of austerity, Britain still continues to allocate 0.7% to foreign aid. Dean Hochlaf defends the target.

Last month, flooding devastated widespread areas of Northern England. This is likely a result of decreasing investment in UK wide flood defences. However, some voices within the political establishment, used this as an opportunity to attack the foreign aid budget. This is a misguided approach, and only serves the false rhetoric that somehow the developing world and developed world are independent of one another. The truth is global development benefits us all. The global economy has never been more integrated, and foreign aid can simultaneously improve domestic economic performance, while at the same time alleviate the brutal conditions caused by poverty, that afflicts far too many in the world today.

Britain is only one of a handful of nations that has achieved the UN target of 0.7% of spending on foreign aid, but hardening attitudes has seen a majority of British people call for a decrease in our aid spending. This, I suspect is due to the general economic malaise Europe is facing. In times of hardship, it is much easier to turn attention inwards, but I fear such an attitude is more detrimental to our interests. Politicians also have a negative impact on public perception of foreign aid. This may be due to the political economy. Benefactors of foreign aid wield little power here in the UK. If there were a transfer of funds away from the military or corporate welfare, this would be more likely to incur a backlash from influential economic agents. Another feature of foreign aid is that the effects are intangible in the short term. It is natural for people to desire immediate gratification from public spending, especially when they are enduring hardships themselves, however this comes at the expense of the long-term economic benefits Britain and the developed world will gain from investing in the future of developing nations, and fostering their economic potential.

Ian Britton / Creative Commons License
Ian Britton / Creative Commons License

 

There is a debate at the moment regarding the significance of foreign aid. I am inclined to believe the evidence which has shown, if foreign aid is targeted appropriately it can make important contributions to the growth of the developing world, and achieving the Millennium Development Goals which revolve around lifting people out of poverty. Why then would the growth of developing nations positively impact Britain? It helps to consider how inefficient a world mired by poverty really is. For the poorest, even small increases in spending can have immense marginal gains. Tiny improvements in healthcare and education for those at the bottom of the global economy can improve their productive potential greatly. Additional units of capital that foreign aid can help provide, will generate much greater returns in a developing nation with very little capital than it would in the developed world. In short, foreign aid can stimulate growth through improving the capabilities and potential of the millions trapped in poverty.

Britain, as an extremely open economy, can only gain from improvements in the global economy, which will arise as a result of foreign aid. There will be wealthier, and larger markets for British firms to explore. A greater pool of skilled labour and potential investment partners. As developing nations expand their production, they will increase their supply, which will lead to cheaper imports from these regions. Furthermore as they attain middle income status, domestic demand for British goods will likely increase, especially given our exports are dominated by high quality, income elastic goods. Given that our own manufacturing industries are in decline, and exports are in a slump, this could be imperative for future economic success. In addition to this, the IMF is also warning of “diminished prospects” with emerging markets facing economic turmoil, which threatens the global economic outlook. A decline in the prospects of developing nations will hinder our economy, and furthermore it will deprive millions of a brighter future. If we don’t act now, the shadow of poverty which haunts the development process will worsen and undermine all the progress we have made. How many people will we lose to poverty, who would otherwise have gone on to make significant contributions to the global economy and society?

Defence images / Creative Commons License
Defence images / Creative Commons License

 

While on the topic, we need to stop questioning which nations receive foreign aid. Foreign aid from Britain is targeted at helping the sick and improving educational opportunities for children. Helping these people shouldn’t be conditional. An argument I have often heard regards India as a nation unworthy of foreign aid, on account of their space program. This misses the point of development entirely. There are millions in India that still face chronic poverty. The government also has a space program. These are not mutually exclusive, but this is precisely what we should be encouraging. Developing a sector that can generate technological improvements, jobs and demand for the type of manufactured goods the developed world produces, is vital for the development process. We should not use the existence of a sector that is crucial for long term growth, as justification for removing aid that goes to the poor and vulnerable.

Whether we like it or not, we live in a globalized world. Economic integration is now commonplace, and barring any major international conflict or disaster, we are unlikely to return to the world of isolated nation states. As a result, the developed and developing world have a symbiotic relationship. What affects one, will affect the other. Foreign aid should not be caricatured as charity. It should be recognised as an investment into our fellow citizens of the global economy. It should be seen as an investment into our partners and friends in a world facing an uncertain and volatile future. The merits of international aid may need to be studied in more depth, so that we focus our efforts into the areas which will reap the most rewards for the people receiving aid, and the future economic success of the world. However, we cannot fall into the populist trap of attacking aid to compensate for domestic failures. Britain benefits from aid. The gains may not be noticeable immediately, but improving the economic state of the world is vital for our universal success, our national security, and our future prosperity. For these reasons, Britain cannot shy away from its international responsibility, and that is why our foreign aid should be defended.

Dean Hochlaf has a Masters in International Finance and Economic Development from the University of Kent. He takes interest in the development of Latin America. He tweets @DHochlaf.

 

 

 

 

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Does GDP growth increase society’s wellbeing?

Does GDP growth increase society’s wellbeing?

For decades much of academia and policy-makers have focused on improving Gross Domestic Product (GDP). However, recent evidence suggests that forever higher levels of GDP may not necessarily translate into bettering society’s wellbeing. Here, Irene Menéndez Fuente addresses this pertinent question, a question which is likely to be in the spotlight in the near future.

For decades, we have been using Gross Domestic Product (GDP) as an indicator of well-being and progress in societies. The general assumption is that the higher the GDP the greater a society’s wellbeing. The reason to understand that GDP means development, is that money can be used in institutions or services that contribute to create a better nation. However, this isn’t always the case and money is not always used to increase society’s wellbeing.

Since the 1970s, the high importance we give to GDP has been contested by several scholars wondering if economic growth effectively helps to achieve greater well-being. Alternative indicators trying to measure other factors have been developed. Such as the Happy Planet Index (HPI) that measures happiness based on subjective well-being and life expectancy of citizens, as well as the ecological footprint of a country. Or the Social Progress Index (SPI) that measures the performance of a country in a set of factors, which all together are understood as necessary for social progress. The surprising fact is that in all of them we find an exceptional case. There is one country – Costa Rica – that scores very high despite having low levels of GDP.

Simon Cunningham / Creative Commons License
Simon Cunningham / Creative Commons License

 

In the two lasts HPI in 2009 and 2012, Costa Rica obtained the highest scores, obtaining the same levels of subjective well-being as Austria and the same life expectancy as Slovenia. In the SPI, it has scored higher than European Union countries such as Italy or Croatia. In the Sustainable Development Solutions Network (SDSN), which exclusively uses surveys to measure subjective well-being, Costa Rica scores number 12 out of 158 countries, ahead of countries such as Luxembourg, Belgium or the United Kingdom who have much higher levels of GDP.

So, does Costa Rica have the magic formula to achieve development accompanied by wellbeing?

Costa Rica has developed along its history different characteristics that have helped to enhance the general wellbeing of its citizens.

It has been recognised as the country of highest democratic stability, in comparison to other presidential governments of Latin America. The reason is the establishment of human rights protection, a good quantity of social policies, including universal education and health, or instruments that allow people to participate more in politics, such as the possibility of referendum and popular legislative initiative. Inclusive institutions and freedoms led to the empowerment of civil society, which translates to more freedom and a better democracy.

Although GDP in Costa Rica is quite low compared to other countries with high levels of wellbeing, the existence of good governance as well as the constant GDP growth that the country has been experimenting in the last 15 years translates in more and better social services. But, despite the efforts of the government on developing poverty programs, Costa Rica suffers of constant levels of poverty and inequality. So why is there still high levels of well-being? The universality of social services and human rights has improved the well-being of the poor, since although they have not enough own income, the existence of universal social services allow them to have their basic needs covered, at least more covered than they would have in countries in which health or education are not public and this fact directly translates into greater wellbeing. Also, efforts of the government in developing anti-poverty programs, have enhanced well-being by maintaining the status of people’s capabilities, although they have not achieved to reduce poverty. Nevertheless, if Costa Rica follows the actual trend of inequality growth, an increase in inequality along with an increase of GDP growth, could have consequences to the current status of well-being of the people already in poor contexts. Following the Easterlin paradox, poor people will compare themselves with rich people, creating the desire of a set of needs that will be impossible to achieve, which could mean a decrease in social well-being.

Finally, culture seems to have a very important role in enhancing well-being of the Ticos (Costa Ricans). A “pura vida” (good life) lifestyle that could lead to set people aspirations in objective and possible ones, the importance of social relations in their society, that several studies have suggested to improve directly subjective well-being and the feelings of pride and national identity that contribute to social movements that have helped to achieve social aspirations, are some of the ways in which the culture of Costa Rica helps to enhance well-being.

Therefore, the case of Costa Rica suggests not only that GDP is not necessarily correlated directly with well-being but moreover that once achieved a certain level of GDP, aiming solely for GDP growth does not make sense to development. The important thing of these new movements and indexes is the change of position of means and ends. They are putting GDP not as the ends of development but instead, GDP is one between other means to achieve well-being and it is not necessarily the most important one.

There is no magic formula to enhance well-being, but under conditions of basic democracy, a vibrant culture, good governance, and a strong economy, seems to help enhancing people´s well-being, which finally should be what really matters.

 

“Development is about transforming the lives of people, not just transforming economies” Joseph Stiglitz


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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