, , , , , , , , ,

Many in the first world imagine the amount of money spent on aid to developing countries is massive.

In fact, it amounts to only 0.3% of GNP of the industrialized nations.

Most wealthy nations spend far more on military than development.  Northern countries exhibiting mercantilist, or monopoly capitalist principles, rather than free market capitalism, even though that is what is preached to the rest of the world.

Aid Amounts are dwarfed By Effects Of First World Subsidies, Third World Debt, Unequal Trade, Etc.  Aid does not aid the recipient, it aids the donor.

There are numerous forms of aid, from humanitarian emergency assistance, to food aid, military assistance, etc. Development aid has long been recognized as crucial to help poor developing nations grow out of poverty. In 1970, the world’s rich countries agreed to give 0.7% of their GNI (Gross National Income) as official international development aid, annually.

This year it is estimated that $37 billion—roughly half of global aid—is “phantom aid”  

Year after year almost all rich nations have constantly failed to reach their agreed obligations of the 0.7% target.  Instead of 0.7%, the amount of aid has been around 0.2 to 0.4%, some $150 billion short each year.

Considering the typical aid amount at around 0.25 to 0.4% of GNI for over 40 years, the total shortfall is a substantial and staggering amount: just under $5 trillion aid shortfall at 2012 prices:

And you wonder why we have problems in the world. 

Rich nations have rarely met their actual promised targets. Recent increases [in foreign aid] do not tell the whole truth about rich countries’ generosity, or the lack of it. Moreover, development assistance is often of dubious quality.

For example, the US is often the largest donor in dollar terms, but ranks amongst the lowest in terms of meeting the stated 0.7% target.

Most aid does not actually go to the poorest who would need it the most.

For example,

  • The US recently increased its military budget by some $100 billion dollars alone
  • Europe subsidizes its agriculture to the tune of some $35-40 billion per year, even while it demands other nations to liberalize their markets to foreign competition.
  • The US also introduced a $190 billion dollar subsidy to its farms through the US Farm Bill, also criticized as a protectionist measure.
  • While aid amounts to around $70 to 100 billion per year, the poor countries pay some $200 billion to the rich each year.

Some of the largest benefactors of European agricultural subsidies include the Queen of England and other royalties in Europe. 

Furthermore, aid has often come with a price of its own for the developing nations:

Sub-Saharan Africa is a massive $272 billion worse off because of ” free” trade policies forced on them as a condition of receiving aid and debt relief.

Aid amounts are also dwarfed by rich country protectionism that denies market access for poor country products, while rich nations use aid as a lever to open poor country markets to their products.

Aid systems based on the interests of donors instead of the needs of recipients’ make development assistance inefficient.

  • In effect then, there is more aid to the rich than to the poor.
  • The US, Europe and Japan spend $350 billion each year on agricultural subsidies (seven times as much as global aid to poor countries)
  • These subsidies are crippling Africa’s chance to export its way out of poverty.

Rich countries might be going through some tough times but that doesn’t change the fact that they owe the rest of the world. Rich countries need to switch from traditional forms of aid-giving to supporting global goods in new ways.

The UK gave not £10, not £1, but 56p ($0.91) in overseas aid for every £100 ($163) we earned as a country. On average, since 1990, we have given even less, 35p ($0.57).

Being truly generous requires rich countries to undergo fairly profound changes in the way they have lived for the last few decades.

We are creating is hugely unequal societies that will in the long run bite our hands off.

To suggest that we should seek to help the poorest at home by withdrawing support from people abroad who are much poorer, while the rich make off with their millions, is surely morally indefensible in any philosophy. It will take a long time to carry out the radical reform needed to bring aid to something verging on sanity and fairness.

Rich countries need to be more generous not less and, they should be proud when they stand in solidarity with the worse off. For the OECD countries to meet their obligations for aid to the poorer countries is not an economic problem.

It is a political one.

Just look at the most recent EU plans to allow only 5,000 refugees for resettlement by asylum seekers in response to the Mediterranean refugee crisis.

Wow I can’t say but I am impressed.

If they offered 5,000 places to persons qualifying for protection. That would be one 30th of the number of immigrants who reached Europe in 2014. This year more than 36,000 of them have arrived in countries like Italy, Malta and Greece.

They need to make a commitment to resettle all the refugees who get over to Europe immediately as a basic humanitarian gesture, and then they need to get onto the problem of providing the resources and the funds to countries that have been decimated by Western foreign policy over the last 10-15 years. That would cost again a fraction of the amount of money that was spent on occupying Afghanistan, bombing Iraq; the amount of money that is pumped into Israel to ensure that they clamp down and repress the Palestinian people.

Western powers need to end their war policy in the Middle East, recognize the responsibility for the catastrophe in the region, and pump billions of pounds of emergency aid into the destroyed countries.

With the recent Earth Quakes in Nepal the eyes of the world will once again focus for a few weeks on the disaster and Aid. There will be the usual outpouring of support and offers of aid.

Every country’s foreign aid is a tool of foreign policy.

For example you would wonder why when Hurricane Katrina hit the richest country in the world.

  • Bangladesh offered $1 million and a disaster management team. The monetary aid was accepted, but the disaster management team was ultimately turned down on September 14, 2005.
  • “Pakistan offered doctors and paramedics, and $1 million to the American Red Cross, tents, sheets and pillows. The monetary aid was accepted, but the material aid was turned down on September 14, 2005.
  • “Honduras offered experts on flooding, sanitation and rescue personnel. This aid was turned down on October 6, 2005.
  • The government of Kuwait made the largest offer, with $100 million in cash and $400 million in oil. Because of the delay in accepting this aid, Kuwait eventually gave its monetary support to two private groups in order to support relief indirectly.

Not forgetting the most embarrassing diplomatic snafu during Hurricane Katrina involved the donation of nearly 400,000 Meals Ready to Eat (MREs) from the United Kingdom, which the U.S. government gladly accepted in September of 2005. That acceptance, however, had to be rescinded shortly thereafter when it was learned that the British MREs contained beef, which the U.S. still banned at that time due to the outbreak of mad-cow disease in the UK in the mid-1990s.

Furthermore, while $854 million was pledged, not all of this money reached the U.S.

My point here is-  if the USA could not handle the assistance on offer so what hope had the Philippines and now Nepal.

It begs the question as to why in this age of technology there is no software package to coordinator and track the Aid on offer.

It appears that the sheer number of donations from foreign countries only help complicate matters.

Take the Philippines currently suffering from Typhoon Hagupit. The country was donated by the US more than $37 million worth of food and relief goods to those who were affected by the typhoon. Whether it was ever delivered no one knows.

Too little aid reaches countries that most desperately need it;  All too often, aid is wasted on overpriced goods and services from donor countries.

'Total aid from all development assistance committee countries at a Glance, 2011-2012' from the OECD

Some aid money that is pledged often involves double accounting of sorts. Sometimes offers have even been reneged or just not delivered.

Aid tied with conditions cut the value of aid to recipient countries by some 25-40 percent, because it obliges them to purchase uncompetitive priced imports from the richer nations.

European and American farm subsidies “are crippling Africa’s chance to export its way out of poverty. It kicks away the ladder by which Africa could eventually climbed out of poverty. It purpose is to deprive others of the means of climbing up the ladder.

And to top it all we are now looking at the privatization of water and water services where the poor often can no longer access clear drinking water.

I suppose we have to grateful for the aid that does reach where it is needed whether it is privately donated or otherwise. As we all know when in need you get to know your friends.