Foreign Aid FAQs – #10 “Aid money is spent on the wrong things”

Foreign Aid FAQs – #10 “Aid money is spent on the wrong things”

There is a widespread belief that overseas aid money is either handed over to corrupt dictators and never reaches the people it is supposed to help, or is wasted on extraordinarily expensive projects which have little or no benefit for people living in poverty. These are perfectly understandable concerns – all public spending should be scrutinised and accountable to ensure that taxpayers are getting the best possible value for money. But do these accusations hold up?

During an episode of Question Time this January, the UKIP donor Arron banks declared that ‘We have to start working out our priorities. Is it to spend £12 billion [in foreign aid] that is misappropriated by foreign corrupt governments or spend the money on the NHS for people in this country?’[1] Firstly, the idea that we should cut foreign aid in order to pay for public services is tackled in this article. Secondly, the claim that the entirety of the UK’s aid budget ends up in the pockets of foreign governments is simply untrue.

The first thing to understand is how the foreign aid budget is actually spent. The vast majority of the aid budget is not given to foreign governments. In fact, the Department for International Development has committed to ending traditional ‘budget support’ – money given directly to developing country governments.[2] The proportion of the aid budget spent this way has been steadily declining, and in 2014 accounted for just 0.45% of the total aid spend.[3]

Around 40% of the aid budget goes to multilateral organisations – bodies such as UNICEF which bring together various governments, individuals, corporations, and foundations to act collectively.[4] This has both pros and cons. Multilateral organisations have economies of scale, world-class specialist expertise and a large reach, and are also widely seen as independent and politically impartial. However, sending money to multilateral organisations can reduce the oversight which the UK government has over exactly how that money is spent.

The other 60% is spent on direct assistance to developing countries. As seen above, only a very small (and falling) proportion of this is simply handed over to foreign governments to do what they like with. The vast majority is used to fund specific projects which the UK government maintains oversight of, and in fact the Department for International Development is one of the most transparent aid agencies in the world.[5] The bulk of this money is channelled through international development charities which work directly with local communities in developing countries, meaning that their governments don’t get a chance to misappropriate the funds.[6]

By all means let’s have a discussion about how to end corruption around the world. For example, a good start would be closing down tax havens which allow corrupt leaders to hide their ill-gotten gains. But lazily repeating the falsehood that aid spending first and foremost goes to corrupt foreign leaders is both dishonest and unhelpful.

The problems with aid

Overseas aid has achieved incredible things (see this article for some examples), but of course it is not perfect. Examples abound of money from the aid budget not being spent on the most impactful projects, to say the least. For instance, the infamous example of £3.8 million being used to fund the Ethiopian ‘Spice Girls’.[8] An increasing amount of aid money is not even leaving the UK, but is being spent on expensive consultants. The Times newspaper claimed that up to £1 billion a year from the foreign aid budget was spent this way, with one consultant reportedly paid £23,000 to write a 2-page policy brief.[9]

Source: http://www.globaljustice.org.uk/resources/poor-are-getting-richer-and-other-dangerous-delusions

Furthermore, too often the primary purpose of aid has not been poverty reduction, but it has instead been used to secure policy concessions (e.g. preferential trade deals, military support, privatisation of public utilities).[10] Of course, if aid is to contribute to a world free of poverty, this needs to end.

The public debate around foreign aid has been reduced to an uncritical ‘for’ camp and an irredeemably negative ‘against’ camp. Against this backdrop, it’s tempting to gloss over the failings of foreign aid when coming to its defence. However, we won’t build public support for aid by pedalling rose-tinted untruths.

It is perfectly possible to be critical of how the aid budget is spent while still supporting it in principle. If millions of pounds from the health budget were found to have been misspent, this would prompt calls for reform rather than for health spending to be scrapped. Those of us who believe that foreign aid is a good use of public money must put forward a positive vision of what the aid budget should be spent on, rather than uncritically defending it in its current state. Global Justice Now have done some excellent work in this area, releasing the report Re-Imagining UK Aid which sets out such a vision.

The foreign aid budget is not perfect, so let’s reform it. It’s time to move the public debate away from straw-man arguments and oversimplifications and towards a more nuanced discussion around the areas in which foreign aid is failing and the ways it can be improved.

[1] www.insuranceage.co.uk/insurance-age/opinion/2480294/blog-arron-banks-question-time-appearance
[2] www.gov.uk/government/uploads/system/uploads/attachment_data/file/573889/Bilateral-Development-Review-2016.pdf, p. 49
[3] www.gov.uk/government/uploads/system/uploads/attachment_data/file/538878/annual-report-accounts-201516a.pdf, pp. 149, 153
[4] www.theweek.co.uk/63394/how-is-the-12bn-foreign-aid-budget-spent
[5] www.gov.uk/government/news/media-reports-on-uk-aid-projects-setting-the-record-straight
[6] www.theguardian.com/global-development/2013/mar/20/uk-aid-spend-important-works
[7] www.gov.uk/government/uploads/system/uploads/attachment_data/file/573889/Bilateral-Development-Review-2016.pdf, p. 25
[8] www.telegraph.co.uk/news/politics/11228152/The-bizarre-recipients-of-British-foreign-aid.html
[9] www.theweek.co.uk/63394/how-is-the-12bn-foreign-aid-budget-spent
[10] Bruce Bueno de Mesquita and Alastair Smith, The Dictator’s Handbook, ch. 7


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Foreign Aid FAQs – #9 “They’re poor because they’re lazy”

Foreign Aid FAQs – #9 “They’re poor because they’re lazy”

A common attitude nowadays is that people are rich because they work hard and deserve to be wealthy, whereas people are poor because they are lazy, feckless and incapable. Does this idea hold up?

Many people living in developing countries actually work far harder than their counterparts in the developed world. For example, Mexico and Costa Rica have the longest average weekly working hours of the OECD countries at 42.9 and 42.6 hours respectively. Compare this with the average working week in the United States of 34.4 hours, and in the UK of 32.3 hours.[1]

People living in poverty aren’t in that position because they’re too lazy to earn a decent wage. They’re in that position because their national economies aren’t very productive. For example, poor soil quality and a lack of mechanisation in agriculture mean that many farmers in developing countries have to spend many hours performing back-breaking work just to produce enough food to feed themselves and their families, let alone produce a surplus to sell.

Many people living in the world’s poorest countries have no option but to send their children out to do manual labour, just to earn enough money to eat. The idea that these parents are so heartless that they would put their own children through this misery just out of their own laziness is not only offensive but downright ludicrous.

We tend to lose sight of the role that luck plays in our lives. The lottery of birth is still an extraordinarily powerful determinant of how someone’s life will turn out.

Those of us living in rich countries such as the UK benefit from centuries of history and economic development which we had absolutely no part in. It is because of this history that we have effective public institutions, democracy, high quality education and healthcare, comparatively high-paying jobs, etc. A person born in a rich country has a far greater chance of having a good standard of living than if that exact same person had been born in a developing country.

The concept of natural economic justice – that people are rich or poor purely as a result of their own individual talent and effort – is both dangerous and demonstrably false. The world is full of examples of lazy, untalented rich people who are wealthy because of who their parents were; and intelligent, talented, hard-working poor people who, because of circumstances beyond their control, haven’t had the opportunity to improve their lot in life.

The successful American investor Warren Buffett put it well when he expressed humility at the extent to which his own personal talent was responsible for his success:

I personally think that society is responsible for a very significant percentage of what I’ve earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you’ll find out how much this talent is going to produce in the wrong kind of soil. I will be struggling thirty years later. I work in a market system that happens to reward what I do very well – disproportionately well. [2]

It’s important to recognise that how our life turns out is not only a result of our individual skill and effort, but are in large part down to luck. Donating to international development charities and supporting foreign aid to help those living in poverty overseas is, in part, recognition that if the lottery of birth had turned out differently, we could so easily have been in their position ourselves.

[1] www.fortune.com/2015/11/11/chart-work-week-oecd/
[2] Quoted in Ha-Joon Chang, 23 Things They Don’t Tell You About Capitalism, p. 30.


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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Foreign Aid FAQs – #8 “Why has nothing been achieved?”

Foreign Aid FAQs – #8 “Why has nothing been achieved?”

The fight to eradicate global poverty has been going on for decades. Yet despite all the money that has been donated and all the work that has been done, international development charities are still running adverts showing how horrendous the situation is in some countries around the world and asking for money to help. This is understandably frustrating – What on Earth did they spend all that money on if not to solve this problem? you may think, Either they wasted the money or they’re too incompetent to spend it correctly – either way, they’re not getting any more of my money!

The first thing to say in response to this is that an enormous amount has been achieved in the field of international development. For example, below are some key achievements of UK foreign aid since 2011:[1]

  • 11 million children supported into education.
  • 30 million people prevented from going hungry.
  • 7 million malaria nets distributed.
  • 5 million people given access to clean water and sanitation.
  • 67 million children immunised against preventable diseases.
  • 13 countries supported to have freer and fairer elections.

Yet despite all this progress, the task is far from complete. Poverty has not been eradicated, and billions of people around the world still have a standard of living which is far below what most people in the developed world experience.

So why has this issue not been solved yet? Part of the reason is the sheer scale of the problem. More than 60% of the world’s population live on less than $7.40 a day – the amount which it has been calculated is required to achieve normal human life expectancy of just over 70 years.[2] That’s about 4.2 billion people. Each year, rich countries spend around $125 billion on foreign aid, which is an awful lot of money. But divide this by 4.2 billion people and it works out at just $30 each per year, or $0.08 a day. So while the generosity of people in the developed world has meant that a large amount of money is devoted to tackling global poverty each year, unfortunately it is still not enough given the scale of the problem.

Another reason is that global poverty is an ongoing problem. For instance, vaccinating children against preventable diseases is not a one-time fix, but something that needs to be done again and again for each new generation. Lots of work has been done to get developing countries to a stage where they are self-sufficient, for example South Korea was previously an aid recipient but is now not only self-sufficient but is itself an aid donor. However, until this is achieved for every country, some will still require ongoing assistance.

Climate change is undoing some of the good work which has been done over the years, and is creating additional work which needs to be done. Developing countries have been hit hardest by climate change, having to cope with more frequent extreme weather events and droughts, and falling crop yields. They are having to spend a lot of money just adapting to climate change, never mind actually improving their situation. For example, climate change adaptation costs Sub-Saharan African countries a total of $10.6 billion a year.[3]

Progress in eradicating global poverty has not been as rapid as we may have liked because of growing global inequality. The gap between rich and poor has been steadily growing to the point where now 8 billionaires have the same amount of wealth as the poorest half of the world’s population.[4] This extreme level of inequality is a major barrier to developing countries reaching a point where they are self-sufficient.

It’s important to be honest about the limitations of aid. The sheer scale of global poverty means that charity alone cannot solve the problem. Nor can it, when what is given to developing countries with one hand in the form of foreign aid is taken with the other through debt repayments, repatriation of corporate profits, tax avoidance, unjust trade rules, land grabs, etc. (see this article for more information).

Aid and charity have an important part to play in the eradication of poverty, but they must be accompanied by the creation of a global policy environment which supports developing countries and gives them a fair chance at catching up with their rich counterparts, rather than the current policy environment which is rigged in favour of the rich and has allowed an ever greater proportion of global wealth to be concentrated in the hands of a few. Only when this is achieved will we be able to eradicate global poverty for good.

[1] www.gov.uk/government/uploads/system/uploads/attachment_data/file/538878/annual-report-accounts-201516a.pdf
[2] www.theguardian.com/global-development-professionals-network/2015/nov/01/global-poverty-is-worse-than-you-think-could-you-live-on-190-a-day
[3] www.healthpovertyaction.org/wp-content/uploads/downloads/2014/08/Honest-Accounts-BRIEFING-webFINAL.pdf
[4] www.theguardian.com/global-development/2017/jan/16/worlds-eight-richest-people-have-same-wealth-as-poorest-50


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Foreign Aid FAQs – #7 “I’d rather give them the money myself”

Foreign Aid FAQs – #7 “I’d rather give them the money myself”

Widespread concerns about dodgy and unscrupulous overseas aid charities not sending donations where they’re supposed to have led some people to instead express a wish to donate money, clothes, food, etc. to those in need directly, thereby bypassing the charity ‘middle-men’.

These concerns have been fuelled by negative coverage of international development charities in the press, which has claimed that these charities spend a lot of money on wages and so hardly any of the money actually gets to where it’s supposed to. However, these claims are based on a fundamental misunderstanding of what overseas aid charities actually do. In general, these charities do not operate as cash transfer schemes. Read our previous article on this topic to find out about how overseas aid charities actually spend the donations they receive.

Rather than increasing the impact of your donation, giving money directly to those living in poverty overseas can actually achieve less than if you had donated to a charity. If you’re planning on travelling to a developing country with the goal of donating directly to those in need, the costs involved (flights, travel insurance, vaccinations, food, accommodation, security, etc.) will eat up a significant amount of your donation.

But let’s say that you were planning on travelling to a developing country anyway, or that you’re transferring money to someone you know in the country who can then distribute it for you. That will maximise your impact, right? Well, actually this still won’t achieve as much as if you had donated to a charity. Donating directly to a person or family living in poverty will certainly help to alleviate their situation in the short-term, but it will have limited long-term impact.

International development charities conduct research to ensure that donations are spent in areas where they will have maximum impact. Then, rather than giving money to people directly, they invest donations in projects which will have a long-term impact in the community. For example, donating food to someone living in an area suffering from poor harvests will have less of an impact than investing in an irrigation project which allows the local community to be self-sufficient and reduces the chances of poor harvests occurring in the future. Unless you are donating a large enough amount of money to entirely fund such a project, it makes sense to let charities combine individual donations and create a greater and longer-lasting impact than these donations could have achieved alone.

Donating directly, rather than through established charities, can cause many issues. For example, crowdfunding has recently emerged as an alternative way of donating to worthy causes. Organised by well-meaning individuals, crowdfunding appeals are meant to cut out the much-maligned ‘administration’ costs of official charities, meaning that all of the money goes where it is intended. However, there are numerous examples of these appeals encountering unforeseen problems – from struggling to track down the intended recipients, to encountering controversy as to where to spend the money raised in excess of what was required, to being taken to court for an unexpected bill.

Established charities have systems of governance and accountability in place which make sure that donors’ money is spent transparently and effectively. The proportion of donations spent on administration is not wasteful, as often claimed, but ensures that problems like those mentioned above are avoided or effectively resolved.

Non-financial donations

What about donating things other than money? Whenever a natural disaster hits, the first instinct of many kind-hearted people is to donate food, clothing, blankets and other goods to be sent to those affected. However, the costs of sorting, processing and transporting these donations can very often exceed the total value of the donations themselves.

Instead, humanitarian aid charities use monetary donations to buy supplies, wherever possible, in the affected country or region. Not only does this improve value for money, but also helps to support the local economy. Additionally, they do not wait until disaster strikes to buy these supplies, but keep strategically-placed warehouses around the world pre-stocked so that they are ready to respond as soon as an emergency arises.

If you’d like to donate something other than money, you could donate items to a charity shop, or donate your time to volunteer for a charity or run a fundraising event. In doing this, you will generate money which can be quickly and easily sent where it is needed most.

Donating directly to people living in poverty overseas may mean that your entire donation goes to your intended recipient. However, at the end of the day it will also mean that your donation will not have as great an impact as if you had entrusted it to an international development charity. And surely it is the impact which matters?


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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Foreign Aid FAQs – #6 “Their own government should help them”

Foreign Aid FAQs – #6 “Their own government should help them”

It is without a doubt true that governments should help their own people. However, this phrase is often used to mean that the welfare of people living overseas is a problem for their own government to deal with and no-one else.

The problem with this idea is that the concept of each government having absolute responsibility for taking care of their citizens only really works if each state is equally capable of doing this. In reality, because of accidents of geography and the course of history, some states have more capacity to look after their citizens than others.

For example, in 2009 the UK was able to collect the equivalent of $13,806 in tax per person. Compare this with even a relatively affluent developing country like Brazil which – with an almost identical tax rate – collected just $3,957 per person.[1] This enormous difference in tax receipts means that the UK is far better placed to take care of its citizens than Brazil is. The point of foreign aid is to get all countries to the stage where they can collect enough tax to ensure the welfare of all their citizens.

In many cases, developing countries are struggling to overcome poverty because of the actions of developed countries such as the UK. Climate change, disproportionately caused by developed countries, is disproportionately affecting developing countries. Climate change adaptation is already a significant cost for many developing countries, costing Sub-Saharan African countries a total of $10.6 billion a year.[2] It seems only fair that the UK assists with this cost.

Furthermore, the present wealth of the UK is built on the profits of imperialism, which held back the development of many present-day developing countries. Foreign aid is not just an act of charity, but well-deserved compensation for these wrongs.

There are also pragmatic reasons why the UK should continue to send aid to developing countries. It is an excellent way to improve foreign relations and, after all, the aid recipients of today are the trading partners of tomorrow. Helping other countries to develop also contributes to the creation of a more stable world, as states plagued by poverty and inequality are much more likely to be unstable.

Additionally, it is a way to reduce immigration. People born in poor countries are driven by the perfectly natural impulse to seek out a better life for themselves and their family, which often leads them to attempt to move to a wealthier part of the world. Improving the quality of life in their home country therefore reduces the incentive for them to emigrate.

“But what about corrupt dictators and despots?”

Given the examples of Robert Mugabe and other dictators dripping in wealth while the majority of their population struggles to get by, it’s tempting to think that if only these tyrants were toppled, their countries’ problems would be solved. However, more often than not they would simply be replaced by an equally corrupt dictator and these countries would still be poor. Dictators don’t just occur because of individual immorality, but because there are structural factors in place in poor countries which allow dictatorships to easily take hold.

The leader of a poor country essentially has two choices as to what to do with the limited amount of public money at their disposal: use it to improve the lives of their citizens (building roads, hospitals, etc.) or use it to enrich themselves and their key supporters. A good leader would of course use it for the former, but these kinds of leaders tend not to last long. All money spent on helping the public is money which an opportunistic rival can promise key supporters should they replace the current leader. If all dictators around the world were immediately deposed and replaced with benevolent rulers, there would still be plenty of rivals waiting in the wings to take the reins of power – and the opportunities for self-enrichment that come with them.

Part 1 (clip ends at 4.30)

Part 2 (clip ends at 13.30)

When we talk about ‘rich’ and ‘poor’ countries, it doesn’t refer to how much currency they have. Rather, it refers to how productive their economies are. Developed countries like the USA and Japan are rich because their economies have a large proportion of high-productivity industries such as manufacturing, which produce a comparatively large amount of value in a short period of time. This means that workers receive higher wages and the government collects more tax which it can then invest back into the economy.

Developing countries are poor because a greater proportion of their economies are occupied by low-productivity industries such as textile production, agriculture and mineral extraction. One of the objectives of foreign aid is to help developing countries to transition from low-productivity economies to high-productivity ones.

Improving the productivity of developing countries’ economies can actually help to reduce the chances of despots hoarding the nation’s wealth for their own benefit. In a relatively poor country which relies on a few low-productivity industries (e.g. oil or mineral extraction), rulers can get by just keeping the small number of people which run these industries happy. As economies become more productive and therefore reliant on a greater number of industries, rulers must keep a greater number of people happy in order to remain in power, and are therefore set on the path from dictatorship to democracy.

By giving developing countries the nudge they need to reach this productivity threshold, foreign aid can pave the way to democracy and bring about a world where every government is willing and able to help their own people.

[1] fusiontables.google.com/DataSource?docid=1cWAzCSaIBlgUpWJBFXslH31NLh6bCfrn6mvtCA#rows:id=1
[2] www.healthpovertyaction.org/wp-content/uploads/downloads/2014/08/Honest-Accounts-BRIEFING-webFINAL.pdf


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Foreign Aid FAQs – #5 “Foreign aid fuels overpopulation”

Foreign Aid FAQs – #5 “Foreign aid fuels overpopulation”

Concerns about overpopulation, or the ‘population explosion’ as it’s sometimes called, are widespread at the moment. The logic surrounding these concerns is understandable – it seems as if there aren’t enough resources to go around in developing countries, therefore sharing them out amongst more people is only going to make the problem worse.

From this perspective, it appears that overseas aid is fuelling the problem of overpopulation by ‘artificially’ keeping people alive whose environment can’t support them, who then go on to have even more children whose environment can’t support them, and so on.

However, aid spending is actually helping to reduce the number of children being born per family rather than increasing it.

It’s important to understand why people in some developing countries tend to have lots of children. Because there is little or no welfare or pension provision in these countries, people have to rely on their children to look after them if they become too sick or old to work. Because so many children die before they reach adulthood, these parents need to have lots of children to guarantee that enough of them will reach adulthood to be able to look after their parents. For them, having lots of children is both an economic burden and an economic necessity.

The way to encourage people living in such countries to have fewer children is not simply to tell them not to have as many babies. By improving child health and economic security, foreign aid is helping to remove the incentives to have so many children.

The UK went through a similar process in its history. During the 18th century around 4-6 children were born per woman but only 2 of these survived to adulthood. As healthcare and living standards improved, fewer children died and there was therefore less of an incentive for families to have lots of children, leading to the stable birth rate the UK has today. Present-day developing countries have been able to achieve the same results in a fraction of the time. For example, 7 children were born per woman in Bangladesh in 1970. By 2012 that figure had dropped to 2.2, the level required for a stable population.[1]

By helping developing countries to move through the same process that the UK did in previous centuries, and which Bangladesh did between 1970 and 2012, foreign aid is not fuelling population growth but is actually helping to slow it down.

[1] data.worldbank.org/indicator/SP.DYN.TFRT.IN?


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Foreign Aid FAQs – #4 “Overseas aid charities are fraudulent”

Foreign Aid FAQs – #4 “Overseas aid charities are fraudulent”

We’ve all been there – you’re walking down the high street and someone in a brightly coloured t-shirt stops you to ask for donations to help people living in poverty overseas. A nagging doubt appears in your mind: How much of my donation will actually go to the people who need help?

These doubts have been fuelled by recent newspaper articles claiming that international development charities spend a lot of money on wages and so hardly any of the money actually gets to where it’s supposed to. What a scandal! you may think, These charities are frauds, taking money that was meant for those in need. I’ll never donate to them again!

However, these claims are based on a fundamental misunderstanding of what overseas aid charities actually do. In general, these charities do not operate as cash transfer schemes. When you donate £10, that money isn’t put on a plane and flown over to be given to a family living in poverty. Why? Because while this would alleviate some of their problems in the short-term, international development charities aim to achieve much more than that. International development is about asking questions like ‘Why are these people poor in the first place?’ and tackling the root causes so that poverty can be not just alleviated but eradicated.

The issue of global poverty is much more complex than simply giving poor people money. If it were that simple we would have solved it by now. That’s why overseas aid charities carry out research to understand more about the problem so that they can tackle it more effectively; they engage in political lobbying and campaigning to try and change the rules that keep poor countries poor (e.g. tax havens and unjust trade deals); and they invest donations into projects in developing countries (e.g. irrigation and sanitation) which will have a long-term impact far in excess of what would have been achieved simply by handing over a lump sum.

When people donate to an international development charity, all of this is what their donation funds. You can think of it as like donating to a cancer research charity – that money isn’t sent directly to people with cancer, but instead funds an ongoing process aimed at permanently eradicating the problem.

“But charities waste so much money on fundraising and staff wages”

This is a completely valid concern; no-one wants any amount of their donation to be wasted. The vast majority of charities are also concerned with getting as much impact from their donations as possible. That’s why they are governed by trustees – professionals who voluntarily give their time to ensure that the charity is efficiently and effectively run.

Any business that doesn’t invest in its future is doomed to not be around for long. The same is true of charities which don’t invest in fundraising. It may leave a bitter taste in the mouth to think that a portion of your donation is paying for an advertising campaign or for the wages of the annoying person who just stopped you on the high street. But if the portion of your donation which is invested in fundraising encourages another person to donate, then you’ve essentially doubled your impact, and surely that’s worthwhile?

Charities make use of volunteers as much as possible to keep their running costs down, but there are some tasks which require a qualified person to be working on them full-time; and this means that they need to be paid. Charity workers have been portrayed in the media as dodgy and shameful, dipping their hands into funds which were meant to go to the needy. Again, this is based on a misunderstanding of what international development charities actually do. As discussed above, their workers do so much more than process donations. They don’t just enable charitable activities to happen; often their work is the charitable activity.

Sure, charity CEOs probably shouldn’t be getting 6-figure salaries, but there’s nothing dodgy about charity employees getting paid for the work they do. They have bills to pay like everybody else and join the charity sector knowing full well that they will get paid less for doing the same job than if they worked in the private sector. It may be uncomfortable to think that when you donate to charity, that money is going to pay someone’s wages. The truth is, whenever you spend money you’re paying someone’s wages.

When you hire a plumber you’re paying their wages; when you buy milk you’re paying the farmer’s and the shop assistant’s wages; when you buy an iPhone you’re paying a whole host of people’s wages – all the way from the Apple store employees to the people mining the raw materials. The point is that you’re happy to pay their wages because you want the product or service that they provide. The question is whether you think eradicating global poverty is a service which you want to be provided.

Charities have been accused of becoming ‘an industry’ or ‘too corporate’. The fact is that the modern corporation has proven to be a highly efficient and effective structure for getting things done. Just look at the enormous global reach and influence of companies like Microsoft and Coca Cola, and imagine what a charity with that kind of power and influence could achieve. If we’re serious about ending global poverty as soon as possible, surely it makes sense for charities to become as ‘corporate’ as possible, and harness this enormously powerful structure to do something good.


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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Foreign Aid FAQs – #3 “We send too much money abroad”

Foreign Aid FAQs – #3 “We send too much money abroad”

Given the significant amount of coverage which the UK foreign aid budget receives in the press, in political discussion, and in charities’ external communications, the public would be forgiven for thinking that the UK sends vast swathes of money overseas. The UK does spend a significant amount of money on international development – in fact it was the first G7 country to meet the UN’s 45-year old aid spending target. The current foreign aid budget stands at approximately £12 billion which is around 1.6% of government spending.

Overall, rich countries send a total of around $125 billion in foreign aid to developing countries each year.[1] Now that is a lot of money, and governments of wealthy nations use this as evidence of their generosity. However, the dominant ‘aid narrative’ glosses over the various ways in which rich countries extract wealth from developing nations, effectively taking back their aid contributions. Below are some examples of how this is achieved:

Debt

In the olden days (pre-1980s), the responsibility was on lenders to make sure that their loans would get repaid. Lending to riskier countries (e.g. those in the developing world) offered a higher rate of return, but carried with it the risk that the borrowing country would default on its loan and the lender would lose out.

This all changed in 1982 when Mexico defaulted on its loans. The US Treasury and the International Monetary Fund, rather than incurring the huge losses which this would have entailed, decided to step in. Instead of letting the loan default, these organisations rescheduled the debt in exchange for Mexico’s adoption of certain economic policies which opened the country up to foreign interests and which are widely regarded to have damaged the Mexican economy, making it more difficult for them to repay.

This treatment, known as ‘structural adjustment’, then became standard. The result has been that the amount of debt owed by developing countries has spiralled as more and more interest was piled onto loans which should have been defaulted on while new loans had to be taken out to cover the repayments, leading to debts many times larger than the original sum. In many cases, so much interest is accrued that the original debt is repaid several times over. For 2015, the debt service paid on external debt by low and middle income countries exceeded $800 billion.[2]

Tax Avoidance

Tax avoidance is theft, plain and simple. Multinational corporations take full advantage of public spending on infrastructure, education, law enforcement, etc. in the countries in which they operate, and then don’t pay for it. Unlike theft, however, for the most part tax avoidance is perfectly legal and carried out through a process known as trade mispricing.

Let’s say that I own an internet search provider – let’s call it ‘Moogle’ – operating in the USA, the UK, and the British Virgin Islands. Now, profits have been good this year and Moogle US and Moogle UK have both made $10 million. However, Moogle British Virgin Islands, since it really only exists on paper, has no profit at all to show. Before the end of the tax year I decide that what the US and UK branches need is a snazzy new logo, so they each pay Moogle British Virgin Islands $10 million for this important work. And would you look at that, hey presto! When the taxman comes round to Moogle US and UK, they unfortunately haven’t made any profit to be taxed on. Perhaps they should take a leaf out of the British Virgin Islands branch’s book where there is $20 million awaiting significantly more ‘business-friendly’ tax rates.

Tax avoidance in developing countries effectively constitutes a transfer of wealth from the public purse to the private coffers of multinational corporations by and large headquartered in the rich countries. In 2012, developing countries lost approximately $991 billion in illicit outflows – greater than the combined foreign aid and foreign direct investment they received that year.[3]

Of course, tax avoidance does not just benefit multinational corporations based in the West, but also wealthy companies and individuals within developing countries who wish to conceal their profits from the tax authorities. However, large-scale tax avoidance is only possible because of the existence of tax havens, the vast majority of which are controlled by a handful of Western countries. For instance, the largest network of tax havens has the City of London at its centre, which controls secrecy jurisdictions throughout the British Crown Dependencies and Overseas Territories.[4]

Trade Rules

Global trade rules can be highly varied, but the most important are those concerning tariffs and regulation of foreign investment. Tariffs are taxes which countries put on foreign goods in order to give an advantage to their own industries. For example, when Japan’s car industry first started out it couldn’t compete with foreign imports, so the Japanese government introduced tariffs which allowed the domestic car industry to grow and nowadays it is one of the best in the world. Regulation maximises the benefit which developing countries get from foreign businesses operating on their soil – for example, requiring them to transfer technology or buy materials from domestic suppliers.

The main thrust of international trade agreements in recent years – primarily as a result of pressure from rich countries – has been to reduce tariffs on manufactured goods (by and large produced in developed countries), and to reduce regulation. Reducing tariffs means that emergent manufacturing industries in developing countries are outcompeted by more established rivals in the developed world, meaning that developing countries are stuck in low-productivity industries such as agriculture and textile manufacture. Reducing regulation means that corporations based in the developing world are able to exploit cheap labour or extract natural resources in a developing country, send the profits back home, and contribute little or nothing to the country’s economic development.

It’s difficult to give an exact figure as to how much these unfair and one-sided trade rules have cost developing countries, but economist Robert Pollin of the University of Massachusetts has estimated the cost at $500 billion a year.[5]

Conclusion

A recent report by Global Financial Integrity which comprehensively examined international financial flows found that for every dollar in aid received by developing countries, $24 is lost through other means.[6]

Of course foreign aid is not the only money which developing countries receive from their wealthy counterparts. In 2012, developing countries received a total of $1.3 trillion from aid, foreign investment, remittances, income from abroad, etc. At the same time, $3.3 trillion flowed out of them, meaning that they experienced a net loss of $2 trillion that year.[7] That’s $2 trillion that could have been spent on combating poverty, improving healthcare, developing industry, or adapting to climate change. Far from being recipients of enormous swathes of cash, overall developing countries are net creditors to the rest of the world.

Source: http://www.globaljustice.org.uk/resources/poor-are-getting-richer-and-other-dangerous-delusions

The fact that the UK spends billions of pounds each year in aid to developing countries is common knowledge. However, the vast amount of money that rich countries receive back from developing countries is not nearly as well known. Perhaps public attitudes towards foreign aid would shift if more people knew that, far from sending too much money abroad, the UK and other rich countries currently do far more harm than good in the developing world.

[1] www.oecd.org/dac/stats/aidtopoorcountriesslipsfurtherasgovernmentstightenbudgets.htm
[2] www.data.worldbank.org/indicator/DT.TDS.DECT.CD?end=2015&locations=XO&name_desc=false&start=1970&view=chart
[3] www.gfintegrity.org/report/2014-global-report-illicit-financial-flows-from-developing-countries-2003-2012/
[4] www.theguardian.com/global-development-professionals-network/2017/jan/14/aid-in-reverse-how-poor-countries-develop-rich-countries
[5] www.aljazeera.com/indepth/opinion/2013/04/201349124135226392.html
[6] www.theguardian.com/global-development-professionals-network/2017/jan/14/aid-in-reverse-how-poor-countries-develop-rich-countries
[7] www.theguardian.com/global-development-professionals-network/2017/jan/14/aid-in-reverse-how-poor-countries-develop-rich-countries


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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Foreign Aid FAQs – #2 “Foreign aid should be cut to pay for public services”

Foreign Aid FAQs – #2 “Foreign aid should be cut to pay for public services”

In any given episode of Question Time, especially during episodes in which the NHS funding crisis is discussed, there is a high chance that at some point someone will suggest that a simple way to raise money for public services would be to cut the foreign aid budget.

For one thing, the foreign aid budget isn’t the eye-wateringly large amount of money which people seem to think it is. For 2015 it stood at £12.1 billion. That’s just 1.6% of government spending, about the same as what the government spent on the railways.[1]

Secondly, it doesn’t seem right that reducing assistance for the world’s poorest people is always the first suggestion for where we should source extra public money. The UK’s aid budget is portrayed as this vast, wasteful sum of money that is inexcusable given the cutbacks in other areas of public spending. What is hardly ever mentioned is the enormous amount of money which the UK government spends on corporate assistance, or which is lost through cuts to corporation tax and corporate tax avoidance. Below are some examples:

  • £44 billion in corporate tax breaks.[2] For example, capital allowances which allow businesses to write off billions spent on machinery, vehicles, IT and office equipment against corporation tax.
  • £35 billion on legacy costs of the bank bailouts.[3] Much of this cost is interest payments on long-term borrowing which was used to fund the bailouts following the 2008 financial crash. The government is effectively retaining the ‘bad’ parts of the banks taken into public ownership following the crash, and selling off the ‘good’ parts at a net loss. Furthermore, the banks are protected somewhat from regular market mechanisms and assessments of risk because the UK government effectively guarantees to underwrite these risks.
  • £16 billion in wage subsidies.[4] In-work tax credits effectively subsidise businesses by allowing them to pay their workers less than they need to live, safe in the knowledge that the government will top up their wages. Similarly, housing benefit allows landlords to charge rents far above what their tenants can afford, inflating the rental market.
  • £15 billion in hidden transport subsidies.[5] Airlines do not pay tax on fuel, corporation tax on their ‘economic activity’ within the countries they operate in, or VAT on ticket sales. Train companies enjoy lower duty on fuel.
  • £15 billion lost through procurement from the private sector.[6] The government spends a total of £238 billion (one third of total spending) on procuring services from the private sector. It has been estimated that it could save £15 billion if some services were instead run by the public sector. This is due to the costs involved in drawing up contracts, monitoring projects, project overruns, and picking up the pieces when private sector companies fail. The government also has to pick up additional costs in benefit payments and/or tax credits when workers are laid off or paid less when private companies take over the running of a public service.
  • £14.5 billion in subsidies and grants.[7] These include subsidies to agriculture, train companies (separate from the hidden subsidies mentioned above), the nuclear industry, and the defence industry. Additionally, grants are given to businesses to encourage them to invest in a certain area or to prevent them from collapsing.
  • £12 billion lost to corporate tax avoidance.[8] This is technically legal, as opposed to tax evasion which is illegal, and almost exactly matches the UK aid budget.
  • £5.4 billion lost from cuts to corporation tax since 2010.[9] These tax cuts mean that businesses are paying nearly £8 billion less in corporation tax per year. This could potentially result in more inward investment, but it has been estimated that it will result in a net tax loss of £5.4 billion. The UK already has by far the lowest corporation tax rate in the G7.
  • £3.8 billion in energy subsidies.[10] These subsidies benefit providers of electricity, gas, and oil. They also include legacy nuclear costs – primarily post-production clean-up.
Source: http://www.globaljustice.org.uk/resources/poor-are-getting-richer-and-other-dangerous-delusions

This is not to claim that all of the spending mentioned above should immediately be scrapped, or that none of it has any beneficial impact. The aim of this is to illustrate that there are far more areas of government spending than just foreign aid which could be reviewed when considering what, if anything, should be cut to generate more money for public services.

For those who benefit from the aforementioned subsidies – and for the politicians who represent them – it suits their interests to divert public attention away from the huge amount of financial assistance they receive from the public purse. Much better to encourage people to criticise the relatively small amount of money spend on the foreign aid budget. It’s a classic diversionary tactic, as cynical as it is effective.

So next time a public figure is eager to highlight the foreign aid budget as an easy source of money to pay for public services, ask people to think about if they have any vested interests and if they are trying to divert attention away from the vast sums of money which the UK government spends on corporate assistance. Why are the poorest always the first to pay when money is tight?

[1] www.ukpublicspending.co.uk/uk_budget_detail_16bt12015n_306065#ukgs303
[2-8] www.speri.dept.shef.ac.uk/wp-content/uploads/2015/07/SPERI-Paper-24-The-British-Corporate-Welfare-State.pdf
[9] www.ft.com/content/c0afbfc4-02af-11e4-a68d-00144feab7de
[10] www.theguardian.com/politics/2015/jul/07/corporate-welfare-a-93bn-handshake


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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Foreign Aid FAQs – #1 “Charity begins at home”

Foreign Aid FAQs – #1 “Charity begins at home”

The original meaning of this proverb was that a person’s first responsibility is for the needs of their own family and friends. However, nowadays the ‘home’ referred to is frequently not an individual household, but the UK as a whole. When discussing overseas aid, this phrase is often used to argue that the UK should tackle its domestic problems before spending money to help those in need abroad.

This phrase is bandied around as if it’s some kind of universally acknowledged truth – like ‘practice makes perfect’ or ‘scissors beat paper’ – which automatically trumps any other argument. Really, it’s just a group of words which doesn’t make that much sense if you encourage people to think about it for a while.

The point of charity is to help those who need it most. Imagine if someone’s house burned down, and their next door neighbour refused to help because they had rising damp in their walls and so needed to sort that out first because, after all, ‘charity begins at home’. Only the most heartless person would do that, right? The scale and urgency of need must surely be taken into account when deciding where charity is deserved.

Those of us living in the UK are very fortunate that our collective ‘home’ has wealth in abundance. It may not feel like it at times – to someone on a zero-hours contract struggling to pay the rent it must feel like a kick in the teeth to be told they’re fortunate to live in a rich country. The truth is, there is an enormous amount of wealth in this country which could be put to use solving domestic problems if only the British public would vote for policies aimed at tackling economic inequality. In much of the developing world, no matter who they vote for (if they even get to vote) they will still be poor.

It’s hard to even imagine the hardship which exists in some parts of the world. The scale and urgency of their problems make ours seem small by comparison. In the UK it is (quite rightly) a national scandal that so many people are reliant on food banks; in Chad, people routinely starving to death doesn’t even make the headlines. Here, the NHS is experiencing a funding crisis; in Malawi, there is no universal healthcare and medical services are struggling to cope with an AIDS crisis. Here, it is claimed that the ongoing Brexit debate is tearing the country apart; in Colombia, lives, families and communities have been torn apart by decades of civil war.

We have the resources in this country to tackle our domestic problems and help those in need overseas. It doesn’t have to be a choice. Many countries around the world have significant and urgent problems which they need help to solve. If the UK abandons foreign aid because ‘charity begins at home’, we are no better than someone refusing to help their newly homeless neighbour because of their own troubles with rising damp.


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 unseen dilemmas of the sudden rise of Asia from a Southeast Asian perspective

The unseen dilemmas of the sudden rise of Asia from a Southeast Asian perspective

Bridget Jeanne shares her experience growing up in Singapore, and discusses the costs and the dilemmas her Asian neighbours and herself fight to establish themselves in the world.

I grew up in Singapore (a small Southeast Asian country situated between Malaysia and Indonesia) and saw the country change profoundly from the days of my childhood to the industrialised city today. Despite its young age and small land mass, Singapore saw itself grow rapidly and with its fellow Asian neighbours even more so in the recent decades. From the 1990s, countries in the Asia Pacific saw their living standards improve multi-fold and raised many out of extreme poverty. In 2013, China and Japan were home to the world’s second and third largest consumer markets respectively with at least 13 other Asian countries following not too far behind in the highest hundred. As consumer markets patterns shift from Europe to Asia, the western superpowers are critically re-assessing their foreign policies and trade agreements so as to grow alongside their Asian counterparts. But as western leaders and policy makers work with Asia, they neglect the unseen dilemmas that came about Asia’s rapid rise – for example, the impending loss of language and the racial hierarchy in the commodification of Asian culture.

2014-07-18-15-22-44

For youth in Asia, the influx of western products and culture have quickly become part and parcel of daily life. In Singapore, English was made the language of instruction to cut across language barriers and encourage racial cohesion. Not necessarily a bad thing but alongside public policies to aid the rapid economic growth, we saw British and American television shows dominating our screens and the common use of speaking only English even at home, leading to an erosion of local programmes and the younger generation not being able to speak ethnic languages. While Japan and South Korea retain a stronghold in local programming, the loss is apparent for smaller countries which struggle to find a balance between using English and local creoles. The number of young people in Singapore who are able to speak their native language and/or local creoles are dwindling (with my own ethnic language almost gone) – it may be interesting to note however an increase in interest in learning Asian languages as opposed to Western languages among my peers. To prepare for 2008 Beijing Olympics, China went on a massive campaign to learn English. Here we see the largest Asian country preparing themselves to bridge the language gap with foreigners, a sentiment our western counterparts rarely express. Growing up my parents encouraged me to learn Chinese because it would afford me greater opportunities but ironically English has afforded me to go further. Language is a vehicle for cultural growth and because its capacity for growth is not seen equivalent to the languages of our western counterparts, it may lead to the erosion of less prominent Asian languages.2014-09-24-15-29-24

As Asian youths become progressively accustomed to western culture (including the use of English) they are also simultaneously becoming more aware of how western culture engages with Asian culture and the racial hierarchy. We noticed the lack of critical coverage on the Chinese policeman shooting the young African boy in the U.S. as we got bombarded with the black-and-white fight. The West also has a history of commodifying Asian culture and traditions – demonstrated by the series of food and cultural videos home to BuzzFeed’s YouTube channel. Sometimes in those videos, they aren’t accustomed to the different food and culture and though it may simply be a difference in taste buds, it can come across and often does as ignorance. The West glorifies Korean beauty but looks down at the consumption of bugs in Asian demonstrating a selective commodification without a critical lens – encouraging the racial hierarchy that already exists in Asia. It’s admittedly difficult to breakdown and even then with no complete certainty of how the West’s portrayal of Asia has impacted the diverse Asian population, but from my observance it has definitely created a dilemma for people in Asia – of who we are and where we stand in the world.

 

 


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How can technology support development?

How can technology support development?

Recently UNDP’s (United Nations Development Programme) Innovation Facility released its “2015 Year in Review report”. Here, Kris Gulati draws upon the report to look closer at how innovation can support international development.

Technology and innovation are often labelled as the biggest drivers of development in the near future. This message was wholeheartedly endorsed in the 2015 Gates Annual Letter:

“But we think the next 15 years will see major breakthroughs for most people in poor countries. They will be living longer and in better health. They will have unprecedented opportunities to get an education, eat nutritious food, and benefit from mobile banking. These breakthroughs will be driven by innovation in technology — ranging from new vaccines and hardier crops to much cheaper smartphones and tablets — and by innovations that help deliver those things to more people.”

The UNDP Innovation Facility’s 2015 Year in Review report demonstrates how innovation can be used to address numerous development problems and to support the progress of the SDGs (Sustainable Development Goals).

“We believe that achieving the Sustainable Development Goals (SDGs) requires investments in testing new ways of doing business. Calculated risk-taking to identify more effective solutions that add value for the people affected by development challenges – people and their governments, our users and clients.”

zsoolt/Creative Commons License
zsoolt/Creative Commons License

Indeed the examples in the report demonstrate that innovation and technological progress have worked in a plethora of countries and contexts. The following examples (from the report) show how technology can be harnessed to tackle a wide array of problems:

Poverty:

Gaining better access to reliable data is invaluable to NGOs and governments. Great data enriches how organisations develop and implement policy. However existing methods of data collection are quite poor. Household surveys and censuses are used often, however these are generally conducted at five and ten year intervals.

The UNDP collaborated with other partners to pioneer an unconventional method of data collection. It utilised collecting data on electricity consumption and night time lights from satellite imagery in order to gauge better information on households.

Create employment and foster productivity:

A fascinating project set up in Macedonia collected real-time data that provided an in-depth analysis of crop conditions using drones. This data is then distributed to farmers and allows farmers to manage crops more effectively, increasing efficiency in the agricultural industry.

Renewable energy:

Accessing electricity nationally is still a major problem in Kenya. This means that many Kenyans either go without light, or resort to unsustainable sources such as kerosene lamps. An initiative began in the mid-1980s to begin a solar panel market. However, it failed to take off, despite considerable demand, and favourable conditions in Kenya. The reason for this was the poor design, quality, installation, and maintenance of the panels. The UNDP and Kenya Renewable Energy Association (KEREA) collaborated to implement a voluntary accreditation framework. Vendors with the accreditation must comply with a set of standards to ensure good quality solar panels. This initiative has bolstered the market allowing many more Kenyans to access electricity.

China produces 6,032 kilo tonnes of e-waste (discarded electrical goods). The UNDP created an app that allows people discarding the waste to upload a photo of their waste. Sellers can then contact them and offer them a price for their waste. The app has been massively successful and now gets over 250,000 visits per month.

These examples are beneficial for buyers, sellers, and the environment.

Corruption:

Papua New Guinea ranks 145 out of 175 countries in the Transparency International’s Corruption Perception Index. A shocking 40% of the country’s annual budget (approximately $6.5billion) is lost to corruption and mismanagement. The UNDP co-created an anonymous app to report corruption, allowing people to confront the systemic corruption with relative ease and without potential harm.

Early warning systems:

Approximately 20% of the population of Bangladesh is prone to floods but the existing system does not always deliver messages effectively or on time. The UNDP helped to create a warning system that is triggered through mobile phones, allowing communities upstream to signal to those downstream of potential disasters.

United Nations Development Programme/Creative Commons License
United Nations Development Programme/Creative Commons License

So is technology the answer?

These initiatives are well thought out and have shown to be successful. However, we must be cautious about neglecting other aspects of development – those that technological progress must work within.

The brilliant Duncan Green highlights two potential areas of concern:

  • Development is centred around domestic politics: Governments must work for their citizens and only systems of accountability can ensure that citizens have an effective state. Technology can help this but cannot ensure this.
  • Abstracting from the complexity of development: Thinking that technology can be the sole driver of development and the solution to all problems is an easy trap to fall into. Technology has to work within existing complex structures in order to ensure development occurs and is sustained.

The aforementioned examples demonstrate how technology is and will become an increasingly powerful tool in development. However, history and the history of development point to numerous occurrences where the over-reliance on single ideas or methodologies never work effectively in isolation.


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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.

 

 


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The Soviet Union: Lessons in Dissolution, Development & Discovery

The Soviet Union: Lessons in Dissolution, Development & Discovery

The USSR should never be viewed through rose-tinted glasses. In the voyage for utopia, a sea of blood was crossed and a workers’ paradise was never actualised. Nevertheless, a recent poll shows that 57% of Russians would resurrect the old system. Tal Tyagi explores why this is the case and concludes that the Soviet experiment provides important lessons in international development.

Poll after poll provides similar results. In 2009 nearly 60% of Russians severely regretted the demise of the USSR. Even in the former satellites nostalgia is strikingly high. In 2010 a whopping 46% of Romanians said they favoured communism. According to a 2009 poll 57% defended the legacy of the former GDR. So strong are such attitudes that where communist parties are allowed to operate, this is reflected in voting behaviour. In Russia the second largest party is the Communist Party of the Russian Federation. In the Czech Republic they are the third biggest party and in East Germany Die Linker, which is in part made up of former GDR government members, is the largest party.

This certainly contradicts our image of those trapped behind the iron curtain. While it may have been a hunger for food and for freedom that brought about the demands for a new order, the transition to the Western model was chaotic at best and at worse chimerical.

Amidst the turmoil of transition, previously non-existent unemployment and homelessness took hold. In many instances party bureaucrats who controlled the administrations of certain services became multi-millionaires over night. Citizens felt like they had been robbed. Fukuyama´s triumphalism that liberal democracies had swept away the socialist dictatorships was not quite evident in Russia. Far from a golden age of human rights and market miracles, it is widely regarded as an explosion of looting and corruption. Popular protests sparked by a rise in poverty were put down by force when Boris Yeltsin ordered the army to have them killed or arrested.

Manhhai / Creative Commons License
Manhhai / Creative Commons License

While the Soviet system was regarded by Western economists as a failure, since its collapse life expectancy has fallen by ten years and in some republics, GDP fell as much as 50%. Therefore, a re-evaluation of this model is in order.

During the Cold War, the two superpowers competed for hegemony. Nikita Khrushchev´s taunting of Western ambassadors with “We will bury you” seemed laughable and ludicrous. The strength of the American dream was not just reflected in its freedoms but in the fridges of the American people. While it was true that on average Americans enjoyed a higher standard of living, when comparing two models a multitude of factors have to be taken into account. A command economy in the temperate climate of Western Europe would almost certainly fair better than a market system in sub-Saharan Africa. This would not be a fair test.

Russia which suffers from frigid winters was largely still feudalistic even by 1917. Since the USSR´s inception it was surrounded by enemies, ravaged by Civil War and then devastated by WW2. These severe disadvantages cannot be deemphasised when comparing with the US.

The success of the ´American dream´ is as much a result of luck as it is of liberty. Established in 1776 and arising from civil war in 1865, the USA had far more time to establish. Her advantages were being made of coal, oil and uranium, much greater climatic variation and peaceful neighbours either side. In WW2 the US lost around 292,000 compared to the 27 million lost by the USSR.

Even when comparing West and East Germany, the major industrial and agricultural centres were located in the West which also received a large portion of Marshall Aid.

Economist Robert C. Allen argues that the success of the Soviet system can only be seen upon comparing it to the most under-developed regions of the world in Asia, Africa and Latin America. In spite of all its disadvantages and problems, the USSR was the second most developing economy in the twentieth century, just after Japan. The rapid industrialisation, mass literacy campaigns, universal healthcare and education along with its propensity to defeat the Nazi war machine, sparked the imagination of movements across the globe.

Ceri C/ / Creative Commons License
Ceri C/ / Creative Commons License

 

The Soviet claim to ´modernization within a generation´ led to several emulation attempts in the post-colonial world. While the US was widely perceived to be pursuing a project of neo-colonialism, the USSR was seen as the alternative. The Chinese revolution, the Cuban revolution, the Saur revolution… Even those leaders, who were not explicitly communist, borrowed aspects.  India´s Nehru described the Soviet system as a “new civilisation, towards which the world would move” and Ghana´s Nkrumah would receive the Lenin Peace Prize in 1962.   In the early 1950s the Soviet Union began a program of technical and economic aid to the underdeveloped nations. Soviet aid, over $6 billion by 1966, was generally low-interest loans, industrial equipment on credit with technical assistance, and long-term commodity purchase agreements.

Strikingly, even in the West, the Soviet model was taken as a serious challenger. In the 1930s at the height of the Great Depression, since the planned economy was not interlinked, the USSR was relatively unaffected. With full employment, rapid industrialization, dams and spectacular projects like the Dnieper Hydroelectric Station and the Moscow underground, the role of the state was given increased credibility in the eyes of policy makers. This was in part, what set the stage for the New Deal.

The foundations of what drives innovation were fundamentally challenged. Milton Friedman´s philosophy is that “the world runs on individuals pursuing their self interests” and that genius and discovery is the exclusive realm of entrepreneurs. However, Sputnik, Yuri Gagarin, nuclear power transferable through a grid, laser eye surgery, the AK-47 and Tetris were just some of the achievements the system could boast without the profit motive.

Overall, the Soviet experiment should never be glorified but neither should the entire chapter be dismissed as just a blunder in human history. Shortages of consumer goods and a thriving black market were failures. However, its ability to transform a backward agrarian economy into a superpower, to double life expectancy and to pioneer the space race were not. In today´s Russia nobody misses the secret police or the shortages but they do miss the housing and healthcare. Therefore, surely something from the Soviet experiment can be salvaged?

 

 

 


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 Globalisation increase or decrease inequality, or neither? 


Does Globalisation increase or decrease inequality, or neither? 


Globalisation has changed the world dramatically. Whether this is for the good or the bad is highly contested. Mainstream sources continually remain defiant on spurring out the benefits of globalisation. Here, Anastasia Nicosia questions this status quo and asserts the possibility that globalisation is increasing inequality.

Globalisation can be best understood as a set of political-economic institutions and policies which contribute, if not generate, enhanced interdependence between countries through the creation of a free global market. This process of global integration is thought to bring benefits to all countries, as market mechanisms are advertised by some as the most efficient enablers of development and economic growth.

However, and in reality, globalisation operates in different ways amongst different countries, bringing enormous economic benefits to some and equally immense negative social and environmental consequences to others. Stigliz has stated that globalisation in itself is neither good nor bad. As long as a country enters the “free” global market at its own right and under its own terms, globalisation can bring enormous benefits.

Asia Society / Creative Commons License
Asia Society / Creative Commons License

 

Hence, in the right hands and at the right time, entering the free market can boost a country’s economic and social development. The United Kingdom opened its border in the 19th century in a time of national prosperity, a prosperity it managed to achieve thanks to its protectionist laws which shielded its own workers from foreign competition. Once it was ready to compete globally it embraced globalisation. Other European countries and the United States followed shortly after, once they felt they could catch up and compete with other market.

However, globalisation processes in the wrong hands and at the wrong time can increase inequalities both within and between countries. The current stream of rapid globalisation is led and sponsored by international financial institutions, such as the IMF (International Monetary Fund) and the World Bank, thus making contemporary globalisation more similar to the latter type than to the former one undertaken by the now developed countries. Naomi Klein reports in her bestseller “The Shock Doctrine” (2007) the many times in which neoliberal policies, such as deregulation, privatisation and liberalization, have been imposed on countries borrowing from both the IMF and the World Bank. Of the many, Chile, Argentina, South Africa, Poland and Russia are just a few cases in the long list of imposed-globalisation procedures. International financial institutions, led by the very same countries that are now developed because of a more cautious entrance into the free market, are now “inviting” less developed countries to reach prosperity in a completely different manner to their own development process.

Lars Plougmann / Creative Commons License
Lars Plougmann / Creative Commons License

 

List, in 1841, had already predicted this contemporary globalisation situation when he described that once a country obtains economic greatness, it kicks away the ladder which it used to reach such prosperity, in order to deprive others of the means to obtain it. Hence, developed countries, by prohibiting through their lending institutions various economic policies such as protectionism and restrictions on imports to developing countries, they are effectively kicking away the ladder they themselves used to become developed. They preach to developing nations the benefits of free trade when they themselves did not go through that difficult path in the first place. By introducing developing countries into the free market ahead of time, international financial institutions are increasing global inequality, since developing countries are stuck in an inferior position to their developed counterparts to which they are dependent for both technology and investments. By imposing as conditionalities deregulation and free trade, weak borrowing economies to the IMF and the World Bank will have to enter the global market, and since they are not fully developed they will not pose a threat to the developed countries.

Once inside such a dispersing global market they will not have the chance to develop in the same way the current rich countries had, therefore they will probably never pose a threat to the latter. Economically weaker countries cannot compete with the world. Indeed opening up to the free market has been followed by the disruption of hundreds of local businesses everywhere in the developing world, as for example in Jamaica. Since developed countries, through the Bretton Woods institutions, have repeatedly been kicking away the protectionist ladder they themselves used to develop, globalisation can be seen as increasing inequality, as they have turned the process into an economic, political and social domination rather than interdependence.

 

 

 


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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Global Citizenship & Me – My DiA Journey by Sarah Burns

Global Citizenship & Me – My DiA Journey by Sarah Burns

Sarah BurnsName: Sarah Burns

Placement: Seva Mandir

Year: 2010

What is your favourite moment from interning with one of DiA’s placement partners?

I couldn’t chose just one moment. I had so many amazing opportunities and experiences during my placement, both professional and personal.

What skills and experience did you develop through interning with DiA one of DiA’s placement partners?

Sarah Burns 2I think the main group of skills I developed, which were also the most transferable, centered around working independently, using my initiative and taking responsibility for the work being done. As an intern I was given pieces of work which no one else in the team were working on so it really taught me the importance of taking ownership of a piece of work and having the confidence to take the necessary steps to drive the work forward.

Throwing yourself into a new country, culture and environment and having to build working relationships across cultural and language barriers is an incredibly challenging and rewarding experience. At the end of my placement I felt I had the confidence in myself to tackle any new work situation. Coming back to the UK and joining the management committee really cemented those skills. It gave me the opportunity to use them and take the lead in shaping the charity during each committee year.

 What did you do once you returned to the UK?

Immediately after my placement in India with DiA I travelled to Nepal to complete another Internship. On my return to the UK I began applying for jobs and joined the DiA management committee. I was on the committee for three years. I joined in 2011 as Secretary and became Chair in 2012 for two years.

How did you time involved with DiA help shape your understanding of global citizenship?

Sarah Burns 3I applied to DiA because I felt their focus on global citizenship correlated with my own views. So I would say that I had a good understanding of global citizenship on joining and this was developed during the UK and India orientation days. But what my experience through DiA did do was provide me with real life situations where I was able to reflect on my own connections with people all over the world. One of my most vivid encounters was during my first week in India when I turned a corner and saw clothes from the UK high street being sold on market stores. This immediately made me question the clothes I buy and how and where they are produced, and how the things I buy can affect communities on the other side of the world.

Has this shaped your subsequent professional (or further voluntary) experiences and/or your personal outlook?

I have no doubt that the skills and experience I gained through DiA had a positive effect on my employability when I returned to the UK. Not only has it allowed me to develop important skills, it has given me great examples of these skills and knowledge to use in applications and interviews. In my roles it has allowed me to approach tasks with flexibility and confidence. Even today, 5 years on from my placement I reflect on how it has shaped my skills and ability to respond to challenging situations.

Personally, it has had a huge impact on my views and behavior. My experiences overseas have fed into the decisions I make about how I live my life, from the things I purchase to the causes I support. I also now have an amazing network of friends and contacts from my time in India and as a member of the committee in the UK. 

What are you doing now?

I currently work for Resource Futures, an independent environmental consultancy business.

What advice would you give to people thinking about applying to the DiA India Internship Placement Scheme?

I would encourage interns to get involved with any extra activities within their host organization or community. It’s a great way to learn more about different projects/departments to your own, meet other volunteers and staff members and generally feel more involved with the organisation. Take every opportunity to ask questions and talk to other volunteers and interns about their roles.

 

Join Development in Action and Tenteleni for the Global Citizenship Forum 2015: ‘At home and overseas: The impact of young volunteers’. An interactive, audience-led discussion and Q&A on the contribution of young volunteers to development.

Tuesday 17th November, 6pm at Rise London, 69-89 Mile End Rd, London E1 4TT.  More information, including that of guest speakers available at gcf2015.wordpress.com


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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Global Citizenship & Me – My DiA Journey by Josh Reece-Moore

Name: Josh Reece-MooreJosh

Placement: Deep Griha Society

Year: 2014

What is your favourite moment from interning with one of DiA’s placement partners?

I have so many positive memories from the experience so it’s hard to look back and pinpoint a specific moment although I thoroughly enjoyed bonding with everyone that I worked with in the office. Everyone was so welcoming and I really felt at home because there was such a strong sense of community. I found that things fell into place and happened very organically.

What skills and experience did you gain through interning with DiA / one of DiA’s placement partners?

I gained valuable experience that university could never have provided me with. When I was studying I found myself stuck in a marking matrix which wasn’t at all true to real life and in my mind I was shifting from focusing on letters and grades to people and experiences in the ‘real world.’ It was really, really refreshing to collaborate with others, which is something that I love doing.

Through DiA I was given the chance to initiate my own project and learned how to plan, deliver and manage creative workshops. I also learned how to work effectively when facing cultural barriers and how to improvise and explore during these workshops in ways which were completely new to me. Communication skills were also essential in order to pass on my subject knowledge and I became aware of different ways to communicate visually and also through gesture.

Josh 2

The experience you gain definitely contributes to both your personal and professional development. I became so much more culturally aware and I absolutely need to take time out next year to go back to India.

What did you do once you returned to the UK?

After an uncomfortable flight home I slept for ages and then went to the supermarket to buy a feast of food that I had been craving while I was on placement. After I got that out of the way I joined the DiA committee, adjusted to life back in London and I began to make digital copies of the results from our workshops.

A lot of people always ask whether or not the fabric from my collaboration with DGS was made here or in India. I used a printer based in London called Bags of Love and produced a small collection of samples which I then entered into creative competitions. I have now found more time to collaborate and I want to bring even more designs out from the sketchbooks that we produced in India.

How did your time with DiA help shape your understanding of global citizenship?

When I first got involved with DiA I knew very little about development issues or the concept of global citizenship – if I’m completely honest it was something that I’d never heard of before.

We attract involvement from a diverse range of people and I think it’s safe to say that what I learnt with DiA would never have been covered in my creative education. I’m continually learning through experience what it means to be global citizen and am always interested in how others interpret the definition. I’m sure that the Global Citizenship Forum that we’re hosting this year with Tenteleni will provoke interesting discussion points around the topic!

What are you doing now?  

I’m managing the India Programme for 2015/2016 to make sure that it runs smoothly and that we take advantage of as many opportunities as possible. We are completely run by volunteers and we all put in a lot of hours behind the scenes to ensure that our programmes are as strong as possible.

I have also just started a new job which I’m really excited about where I’m hoping to gain more management experience. I still find time to work on creative projects alongside these commitments.

What advice would you give to people thinking about applying to the DiA India Internship Placement Scheme?

Ask the committee a lot of questions because the majority of us have travelled and are more than happy to discuss what life will be like while you’re on placement. Don’t forget that your journey doesn’t end when you arrive home!

 

Join Development in Action and Tenteleni for the Global Citizenship Forum 2015: ‘At home and overseas: The impact of young volunteers’. An interactive, audience-led discussion and Q&A on the contribution of young volunteers to development.

Tuesday 17th November, 6pm at Rise London, 69-89 Mile End Rd, London E1 4TT.  More information, including that of guest speakers available at gcf2015.wordpress.com


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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‘International’ Development? Why We Need to Understand the Importance of Locality

‘International’ Development? Why We Need to Understand the Importance of Locality

The term ‘International Development’ is often used without consideration of the underlying meaning and implications of it. Peter McNally explores the theoretical underpinnings of the term and provides a reconceptualisation of the term.

As much as we talk about ‘international development’, it remains quite a vague term. It describes many different sectors and encompasses everything from small internationally-minded charities to multi-billion pound government aid budgets. Its objectives are similarly nebulous – not least because of perennial uncertainty around what ‘development’ really means.

Increasingly, the use of this catch-all term seems somewhat problematic and outdated. However, it’s not the ‘development’ part that’s the problem – it’s the ‘international’ part. The reason being that this term suggests some form of transnational uniformity. Thinking of things in such a way implies the existence of a set purpose of ‘development’ – and pathway to achieving it – that applies worldwide.

Suffice to say, this is not a good implication to be making. Rather, it is important to understand that there is no single path to development, nor consistent experiences thereof. The different development trajectories of Southeast Asia and Sub-Saharan Africa are a prime example of this. In 1960, each of these regions had an aggregated GDP per capita of below 500 USD. However, by the year 2000, the former had risen to just short of 1200 USD, whilst the latter had all but stagnated at around 500 USD.

Clearly, no kind of internationally applicable, template of development trajectory took hold here. Rather, each of these different regions experienced unique manifestations of development. Indeed, the same can be said for every different country, town and community within these regions. Simply put, there is no uniform development pathway, nor consistent set of development objectives, that can be applied uniformly worldwide. As such, the term ‘international development’ is misleading.

However, the problematic nature of the term should not detract from the intentions that often underlie it – namely, attempts to achieve goals relating to social, economic and cultural justice all over the world. To avoid this, let’s try to think about development in a much more localised way: one that is nuanced, based on local effectiveness and needs, and respects the diversity of these needs across the globe. Framing development in such terms will help us to do it better in three primary ways.

Firstly, we must remember that different areas are subject to different circumstances – and different people want different things. As obvious as this seems, this is something that international development programmes have not always appreciated. Perhaps the most famous example of this is PlayPumps, where we learned that no amount of government money or celebrity endorsements can make up for insufficient consultation with a local community about what problems they have and how they can be solved.

Picture of PlayPumps in use. Picture by Media molecule / Creative Commons License
Picture of PlayPumps in use. Picture by Media molecule / Creative Commons License

Essentially, solutions that are locally generated – or devised in genuine consultation with a range of local stakeholders – have the best potential for effectiveness. This doesn’t mean that we should leave people outside of our own locality to look after themselves, just that maybe conventional macro perspectives aren’t always appropriate. Add into the mix the propensity of assessments of development to focus on indicators like GDP per capita – a measurement based on western notions of development – and you can see how local needs and preferences are often deprioritised by such programmes.

Secondly, it will help us to see development as a cohesive rather than divisive project. We so often hear about ‘developing countries’, the ‘global south’, and even still the odd ‘third world’ comment here and there. But consider this: there are parts of ‘developing’ countries which are richer than parts of ‘developed’ countries, and parts of ‘developed’ countries which are more in need of support than their ‘developing’ counterparts. For example, Cuba has a higher literacy rate than the US, and the richest neighbourhood in Lagos is wealthier than the poorest neighbourhood in London. By recognising local levels of development in this more atomised way, we can see that it applies to all of us – realistically, nowhere has finished developing. This will help to finally dispel the othering, anachronistic way in which development is commonly seen today, and who it is commonly understood to be for.

Finally, if you’re like me, you probably want to know how you can contribute to development in the most impactful way. So, here’s the good news – having a more localised perspective is a great way to do that. We have all heard the numerous criticisms of ‘voluntourism’ over the past few years: the impact of certain organisations sending temporary unskilled labour to developing areas is as sketchy as the ethics of doing so. In such cases, these voluntourists’ motives for going seem quite dubious. Indeed, if your aim is to have the most impact, then you must consider what you and your organisation can offer that is in any way more impactful than local people implementing local solutions. If you can’t think of anything, then maybe consider supporting organisations that seek to empower people to do this. In the meantime there are likely to be plenty of worthy – if less glamorous – development projects closer to home which are ripe for your contributions.

Ultimately, this is what development should be all about: empowerment. It is arrogant to think that people from developed countries are any more creative, innovative or enterprising than those living in developing communities. What they may have to offer are unique resources, technology and facilitation skills. So, let’s do development in a way that focuses on sharing and co-operating in the name of empowerment. Appreciating the innumerable different micro-scale development situations and needs all over the world will greatly enhance our ability to do this.

You can follow Pete McNally on Twitter: @_petermc

 


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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