Paying the Price

December 6, 2004 1:35 AM

The British aid agency OXFAMhas released new figures on foreign aid. In 2003, the average aid budget of wealthy countries was just 0.25% of national income. According to the OECD this is actually a modest increase. Only 5 countries: Denmark, Luxembourg, the Netherlands, Norway, and Sweden meet or exceed the 0.7% target agreed at the 1992 Rio Earth Summit. Among wealthy nations, the US is meanest in terms of percentage. At 0.14%, or £8 billion a year, the US foreign aid budget is less than one tenth of what was spent on the invasion of Iraq. The aid budgets of rich nations are half what they were in 1960, Oxfam said, while poor countries are having to pay $100 million a day in debt repayments. Does foreign aid help? Or is it just throwing good money after bad?
posted by three blind mice (30 comments total)

Does foreign aid help?

it depends on what sort of aid, how the aid is disbursed and how active the wealthy nation is in taking a part to make sure it's used well. this can be as simple as choosing the right organizations to fund. of course, we have to make sure these organizations are politically simpatico. oh, not to mention the countries we choose to aid. our altruism only goes as far as our self-service.
posted by blendor at 2:37 AM on December 6, 2004

Although I agree that much more should be done on America's part, it's dangerous to view aid programs with such a reductionist lens. You can't necessarily boil these programs down to dollars and cents. Take for example, the AIDS programs endorsed by the Bush administration -- a third of the fifteen billion dollars goes to abstinence-only education. Does money that comes with political caveats help?
posted by trey at 3:42 AM on December 6, 2004

Anyone is amn lucky to be getting anything at all with the current political climate in the US
posted by CCK at 4:06 AM on December 6, 2004

or damn lucky even
posted by CCK at 4:07 AM on December 6, 2004

Caution, supply side economics at work.

Maybe we can get the Southern Baptists to chip in and help?
No? Might feed some dark skinned person? Oh, OK, I see.
posted by nofundy at 4:56 AM on December 6, 2004

Great post. I've always wondered about these foreign aid statistics. They're telling us: Give more aid! Be less selfish! Especially, you, America! Norway's 6 times more generous!

But I've often wondered, what's behind these figures? The supplied links give some information, but it all remains pretty vague.

The ways in foreign aid may not be as generous or as effective as we'd like are numerous:
1. Politically-motivated aid. Half of US aid is to Egypt, Russia, Israel, Pakistan, Serbia & Montenegro, Colombia, Ukraine, Jordan, Peru, and Afghanistan. We aid most of those countries for political reasons, quite obviously.
2. Donations to large organizations with high overhead (UN, etc.). I'd be a little suspicious if it's the same organizations that benefit from this aid that come up with the figures about how everyone's being so selfish.
3. Hidden subsidies for industries from the donor country. Let our favorite companies build a road, a hospital, etc. for you. Everybody wins!

Also, comparing aid figures raises the question of public vs. private aid. Private US aid is apparently 3 times US government aid. In some countries (France, Scandinavia?), the public sector is huge. In other countries (USA, Italy?) the private sector is more powerful (particularly charities and churches).

So, are these global aid figures comparing apples and oranges? Are they really a useful way to think about helping developing countries?

I'd love to see a detailed account of how exemplary donors like Norway and Sweden are spending their aid.
posted by Turtle at 5:23 AM on December 6, 2004

Even the raw numbers provided can be easily cherry-picked to tell a different story: of the total given by the top twenty do-gooding countries, the United States' contribution constituted almost a quarter of that. In fact, the US not only leads the list in total donations, it spends almost twice what the number two country, Japan, does. And let's not leave out the Americans spending two-and-a-half times what France does and more than Germany and the UK combined.

Moral of the story: the US may not be, in fact, meeting it's agreed-upon 0.7% target, but neither is anyone else and in terms of sheer buying power it's out-spending every other developed nation by a significant percentage. I think that extra-Amercan "watchdog" groups ought to be a little more grateful for what has been given - and perhaps pause and consider the changes in American society represented most clearly by our last national election, and the threat those changes could mean to any aid sent outside our borders - before they drag their dead horses back to the trough and hold out the bowl for more, please...
posted by JollyWanker at 5:43 AM on December 6, 2004

Although I agree that much more should be done on America's part, it's dangerous to view aid programs with such a reductionist lens. You can't necessarily boil these programs down to dollars and cents.

So, are these global aid figures comparing apples and oranges? Are they really a useful way to think about helping developing countries?

points well taken trey and turtle (respectively). the gist of oxfam's complaint is that the lack of direct foreign aid coupled with a crushing debt burden results in countries like zambia not being able to pay teachers.

unlike many other nations, SIDA, the swedish international development cooperation agency, provides considerable freedom to recipient nations in the form and substance of the aid which is provided. this may be contrasted to the aid provided by countries like the US and China which are largely connected to self-interest. in this light the invasion and occupation of iraq would represent a substantial increase in US foreign aid.

pity some iraqis seem so ungrateful with this windfall.
posted by three blind mice at 5:47 AM on December 6, 2004

Maybe we can get the Southern Baptists to chip in and help?
No? Might feed some dark skinned person? Oh, OK, I see.

Not to thread derail, but the Baptists actually give quite a lot to "some dark skinned persons" as you put it. The Southern Baptists have many flaws, but not giving to charity isn't one of them.
posted by unreason at 5:50 AM on December 6, 2004

Many news outlets reported last week on the US threat to withhold foreign aid from countries who don't grant US citizens blanket immunity from International Criminal Court prosecution (WaPo link). This provision is part of the spending bill due to be heard on December 8.

From the article: "Congress's action may affect U.S. Agency for International Development programs designed to promote peace, combat drug trafficking, and promote democracy and economic reforms in poor countries."

If nothing else, it shows that there's not a drop of altruism in US foreign aid policy, considering that vital dollars are being used to blackmail poorer countries into exempting US citizens from international law. It makes private organizations like Oxfam even more necessary.

(Full disclosure: I was once employed by Oxfam America.)
posted by jesourie at 7:00 AM on December 6, 2004

If nothing else, it shows that there's not a drop of altruism in US foreign aid policy

Perhaps a little bit of altruism, but not very much. Foreign aid is in general a selfish endeavor, Japan, for example, uses its foreign aid money to try to win votes to bring back whaling, the US uses it to affect foreign policy, etc, etc. In foreign aid, as in most other things, there's no such thing as a free lunch.
posted by unreason at 7:05 AM on December 6, 2004

JollyWanker:In fact, the US not only leads the list in total donations, it spends almost twice what the number two country, Japan, does.

Note than when we compare entities of similar economic size, EU countries (individual + EU) spend more than twice what the US spends (at least in government aid not spent through other channels).

For detailed country figures see also the donor aid charts and the recipient aid charts. These charts also contain figures about how much is spent by sector. For instance, 20% of Norwegian aid is spent on health and education and another 20% on emergency aid.
posted by elgilito at 7:21 AM on December 6, 2004

The argument for foreign aid is made in strongly moral terms:

"As rich countries get richer, they're giving less and less. This is a scandal that must stop," Oxfam director Barbara Stocking said.
If the present trends continue, the agency warns that 45 million more children will die needlessly in the next 10 years.¹

But while googling for "French foreign aid", wondering whether much of it is spent on its former colonies (didn't find anything yet), I was amazed to see there's a number of people, who may well have the ear of the Bush administration (apparently adding "French" to a search nowadays is a good way to bring right-wing rants out of the woodwork), arguing foreign aid is a waste, or even does more harm than good (some of this may be a bit old):

The moral climate generated by Western intellectuals -- including the media and the clergy -- is one of the key ingredients in the political success of this process of draining money from Western taxpayers for the benefit of Third World ruling classes and international bureaucracies. Guilt is one of the factors in this moral climate.¹

The lobbyists for aid like to base their argument on the performance of Oxfam and other charities ... However, the funds which are managed by charities are a drop in the ocean of foreign aid. ... The major players in Development Inc., like the World Bank and the IMF are responsible to no one. ... Most of the money which passes through these organisations benefits those who run them. For example, UNESCO spends about 80% of its budget in its palatial headquarters in one of the smartest areas of Paris.¹

The First World would do the Third World a favor by ending all but humanitarian aid and opening markets so that poor nations can trade according to their comparative advantage.¹

Certainly the record of past foreign aid can be questioned. Even a no-brainer like canceling the debt of poor countries may not help the right people, I suppose, or could encourage more corruption if done wrong. There's gotta be good forms of foreign aid, though.

On preview: thanks for the links, elgilito, but two of them don't work.
posted by Turtle at 7:29 AM on December 6, 2004

Oops, yes they do elgilito, never mind, thanks.
posted by Turtle at 7:32 AM on December 6, 2004

San Francisco spends more on the homeless than almost any other U.S. city, yet they've got one of the worst homeless problems around. We liberals have to make a better case than "spend more money so we can be relieved of some guilt".
posted by owillis at 8:37 AM on December 6, 2004

foreign aid is great, but what kind is the question. Blindly pouring material aid into a country is just a short term temporary patch. These folks need to be educated. It's like the fish and fishing thing. Do you give them a bushel of corn this month and let them starve next month, or do you teach them how to grow, maintain and distribute the corn? So many so-called third world nations are just basket cases stumbling along from disaster to another. They need something more than a free meal and pair of sneakers to improve their lot over the long haul.
posted by jim-of-oz at 8:57 AM on December 6, 2004

Turtle : ...wondering whether much of it is spent on its former colonies
The OECD chart for France shows that more than 50% of French foreign aid goes to sub-saharian Africa (see figures for Ivory Coast and Senegal). Interestingly, another beeellion dollars goes to French Polynesia and New Caledonia, both French territories (which raises the question of why this is considered as "foreign" aid).

...foreign aid is a waste, or even does more harm than good
Conservatives think tanks (such as the Cato Institute, the Hudson Institute and the Institute of Economic Affairs quoted above) have an ideological opposition to government-funded aid, and they don't need to dig very deep to find arguments against it (waste, corruption etc.).

Note that their opposition to aid doesn't include military aid (quoting Carol Aldeman above: [the US] give far and away the most militarily, which helps make the world safe for economic growth and democracy.

However, one can doubt that their preferred alternative solutions (private charities and commercial contractors) are valid in all cases. It's not like every situation requiring aid is of the tear-jerking sort or a cash cow in the making...
posted by elgilito at 9:24 AM on December 6, 2004

They need something more than a free meal and pair of sneakers to improve their lot over the long haul.

True, and I'll definitely argue in favor of aid with a long term focus. OTOH, when someone's starving it doesn't do a lot of good to teach classes on crop rotation. We need a mixture of both long view aid, and immediate aid. Unfortunately its the immediate that gets everything because there are so many immediate problems.

One other problem is local government. Giving foreign aid to a nation ruled by a dictator just puts that aid into the dictator's pet projects, friends, and Swiss bank account. Look at the well intentioned "oil for food" program in pre-Bush's War Iraq. The idea wasn't a bad idea: Saddam is nasty, but the Iraqi people aren't; so let's let Saddam sell some oil to get food, medicine, etc. One of the few things the Bush government got right is that the oil for food program wasn't doing what it was supposed to.

And, let's not forget the difference between humanitarian foreign aid and military foreign aid. The vast majority of US foreign aid is military aid. Look at Colombia, for example.
posted by sotonohito at 9:28 AM on December 6, 2004

Many news outlets reported last week on the US threat to withhold foreign aid from countries who don't grant US citizens blanket immunity from International Criminal Court prosecution (WaPo link).

wow. just. wow. thanks for that link, i'd missed that story.
posted by blendor at 9:29 AM on December 6, 2004

The best "foreign aid" we could give the third world would be to eliminate agricultural tariffs so they could compete with our farmers... of course, that will never happen.
posted by Spacelegoman at 9:32 AM on December 6, 2004

I don't have simple answers to the questions raised in this thread. Within some international development circles, "aid" is a very problematic notion. It connotes mega-projects, bloated bureaucracies, and decades of failed paradigms; see Graham Hancock's Lords of Poverty. There is a wide spectrum that runs from purely humanitarian aid and disaster relief all the way to infrastructure development and building civil society. Arguments rage as to the usefulness of any of these approaches.

I have a problem with the notion of "development" and designating the South as "developing." I think that as soon as you set up this dichotomy, all sorts of bad things happen.

The first problem is the basis for the distinction: the developed countries just happen to be us, and the developing countries are someone else. Therefore, to be developed is to be like us. If we weren't around, would Ghana still be "developing"? And aren't Northern nations developing too, with various problems that they need to fix?

As well, the original development paradigm (from Truman's 1949 inaugural address) was that the South could rapidly industrialize and therefore become "developed." But do the powers that be in the North (business, labour, government) really want all other nations to be fully-industrailzied and therefore powerful and competitive? Note the reaction to India competing with the North in various sectors.

We might conceive of development as something else, perhaps a project to improve health and education. Institutions created inside this notion to solve these problems of underdevelopment are likely to become self-perpetuating; if countries become "developed," the organization will go away, and this fact will impact the sorts of projects in which these institutions will engage.

Perhaps the biggest issue is one of perceived long-term failure of various development paradigms (industrialization, leap-frogging, and so on) over the past fifty years, while at the same time we seem to see some progress in the South (life expectancy increased from 46 to 63 years, child mortality rates cut in half, literacy rates 82%) and some problems (800 million people not getting adequate food). It is a significant challenge to determine what changes development projects are bringing about, as these projects are not the only thing going on in the society and the economy.

The problems of poverty are real, but solving them is not easy. Some would argue that in the long-term, a sort of global income tax that transfers wealth from the North to the South will be required. Others argue that more free trade, allowing the South to compete with the North on a more equal footing, is critical. And that any development effort must be, as much as possible, a true partnership between donors and recipients.
posted by tranquileye at 9:37 AM on December 6, 2004

The best "foreign aid" we could give the third world would be to eliminate agricultural tariffs so they could compete with our farmers... of course, that will never happen.

right on Spacelegoman!

domestic subsidies in developed nations probably do more harm to developing nations than anything else.

A cow from Europe can afford to live in a five star hotel in Kenya for a whole year. Funny but true. Whereas in Africa people live on less than a $1 a day, Europe subsidises each cow with $2 a day. And that is the folly of free trade.

this probably isn't doing much for europeans either. in the dead of the northern european winter, buying vegetables grown in hothouses in the netherlands doesn't seem to make a lot of sense. for the consumer that is.
posted by three blind mice at 10:30 AM on December 6, 2004

this probably isn't doing much for europeans either. in the dead of the northern european winter, buying vegetables grown in hothouses in the netherlands doesn't seem to make a lot of sense. for the consumer that is.

There is something to be said about reducing the shippping distance of food, and the environmental impact of eliminating the need for importation.
posted by thirteen at 10:34 AM on December 6, 2004

There is something to be said about reducing the shippping distance of food, and the environmental impact of eliminating the need for importation.

thirteen, my local store has bananas from columbia, kiwis from new zealand, and oranges from spain. shipping costs are nothing. it makes no sense that it is cheaper to grow tomatoes in an artificial environment instead of shipping them from a warmer climate. what about the enviormental impact of the energy needed to grow tomatoes and peppers during the dutch winter?

it is the subsidies that dutch farmers receive that makes it work, not their lower shipping costs. that's the issue,
posted by three blind mice at 12:10 PM on December 6, 2004

The best "foreign aid" we could give the third world would be to eliminate agricultural tariffs so they could compete with our farmers...

An Oxfam International project called Make Trade Fair is working to equalize the wildly disparate trade restrictions between developed and developing countries. The real lives section of the site has case studies about the effects of trade barriers erected by the US and the EU against goods from the developing world.
posted by jesourie at 12:20 PM on December 6, 2004

elgilito: yes, that's weird France counts aid to its far-flung territories as foreign aid. And yes, it looks like they spend a lot of money on their former colonies. So I guess the military presence in Côte d'Ivoire counts as aid too?

Also Congo and Serbia get a lot of aid from several European countries, I wonder if they're counting what's spent on UN-backed military forces there. I wonder what the world's biggest recipients of foreign aid are? I think there's a way to know but it requires opening 5 PDFs on the OECD site, and last time I tried it crashed my browser...

Also, re: the Cato Institute, not to nitpick, but I guess they'd call themselves "libertarian" rather than "conservative". Their solutions for helping poor countries seem to be ending subsidies and building democratic institutions. Democracy and free markets! What a boring, simpliste solution. It's got to be more complicated than that...

On preview: looks like Oxfam also subscribes to free markets and democracy. No doubt the devil is in the details.
posted by Turtle at 1:06 PM on December 6, 2004

Turtle, you're right that the Make Trade Fair campaign subscribes, at least in broad strokes, to a form of free market capitalism in that it advocates for a level playing field (lifting trade barriers on both imports and exports to and from every country, including the US and the EU) augmented by continuing aid to the developing world in the form of debt cancellation.

The Bush Administration's "simpliste" economic policies, while paying lip service to the idea of level economic playing fields and lifted trade barriers, are actually a grotesque charade of the idea.
posted by jesourie at 1:43 PM on December 6, 2004

thirteen, my local store has bananas from columbia, kiwis from new zealand, and oranges from spain. shipping costs are nothing. it makes no sense that it is cheaper to grow tomatoes in an artificial environment instead of shipping them from a warmer climate. what about the enviormental impact of the energy needed to grow tomatoes and peppers during the dutch winter?

I am guessing there is less of a impact of keeping a hot house, hot, than there is in shipping produce in from another hemisphere. I know there is food from all over the world in my grocery store, but everything I have read suggests that is is a more responsible choice to buy what you can locally. If I could buy a banana grown in Illinois, I would buy it over any other banana available. I do not always keep to this, as there is this Irish butter that has been rocking my socks, but it is not like it is a bad idea to buy what food grown as close to you as is possible.
posted by thirteen at 3:01 PM on December 6, 2004

Foreign aid is inherently deceptive, and not in an inherently deceitful way, not intentionally, but by its very nature. For example, some experts now believe that the departure of the US military from Germany might cost their economy from $300-500 Billion dollars a year. This money could rightfully be called foreign aid, and yet it is very indirect.

A different example is Japan, who prefers to issue large low-interest loans to countries instead of aid. In the short term, these have both the effect of aid, and yet also help insure that the money is managed properly--unlike direct aid.

Aid given to institutions that provide aid or loans is usually not listed as foreign aid, but this runs the gamut from the IMF to the Red Cross and UNICEF. Corporations are also used to provide wealth-producing resources as indirect foreign aid, such as superior grains subsidized through Monsanto, weather satellite and cartographic information free of charge, navigational aids and international communications, international standards and measures, and treaty memberships.

In many circumstances, even the deployment of foreign soldiers is an indirect foreign aid--it allows the local nation to save its resources instead of using its own military. And this is an example of the largest method of foreign aid of all: providing resources for other nations so that they don't have to do it themselves.
posted by kablam at 5:21 PM on December 6, 2004

Corporations are also used to provide wealth-producing resources as indirect foreign aid, such as superior grains subsidized through Monsanto

wealth-producing for Monsanto, that is, as these grains offer superior resistance to Monsanto pesticides and herbicides - thus giving bountiful first-year harvests - but are markedly inferior in the sense that they tend to be sterile, trapping the third-world farmers into a cycle whereby they have to purchase their seed stock every year from...guess who...?
posted by UbuRoivas at 9:29 PM on December 6, 2004