Jack Perschke: Aid perpetuates poverty

Cllr Jack Perschke worked in international development with British and UN aid agencies in Afghanistan, Somalia, Sudan and DR Congo.  The Director of Phronesis Consulting, a firm that provides advice to businesses looking to improve their social and environmental performance, he argues that development aid invariably fails to develop functioning economies and democracies.

Aid is one of the truly sacred cows of our generation.  No politician, philanthropist or development agency will tell you anything other than it being a force for good and that there is an urgent need for more money to spend on it.  The standard line is that aid is good for everyone.  It is good for us in that is protects us from social and political problems spilling over from impoverished countries.  Aid also helps countries to become wealthier and, therefore, opens up more markets for our businesses to operate in.  It is also argued that as we have a capacity to help, much of which was developed at the expense of poorer countries, we have a moral obligation to mobilise it.   

The truth is that these are all great arguments for international development.  They are arguments that I support and were the reasons behind my own foray into the aid world.  However, as I and many others before me found, development and aid are not one and the same thing. Despite this, confusion is perpetuated by the use of the term “Development Aid” as distinct from “Emergency Aid”.  Clearly, there is a case for providing emergency food, water and shelter in the wake of a disaster and so it is not “Emergency Aid” that will be discussed. However, this concept of “Development Aid” is, in my opinion, so generalised, myopic and naive that it is one of the key blockages to international development and serves only one master – Western political expediency.   

The first myth that needs dispelling is that our current government is interested in encouraging development.  This is not true, they are interested in spending ever more tax pounds on aid projects that consistently show no significant strategic return.  They do this to stay in power by hiding from the political bullying of the charities and avoiding the revelation that they are incapable of truly innovative thought.  The other aim of their failed policies is to satisfying the US-led neo-colonial agenda of our time, namely thrusting the square peg of democracy into the round hole of developing nations.  Hilary Benn, in DFID’s report Government, Development and Democratic Politics is quoted as follows, “An effective state is the single most important factor in determining whether progress takes place.”  This is clearly nonsense, the reality is the other way around - development is the single most important factor in determining whether the state is an effective one.  Putting the cart before the horse in this way is typical of Labour’s state-centric view of life.  It seems that international development is the ideal forum for Labour politicians to play out their socialist fantasies.   

He goes on to say, “We believe that democratic politics is the only way to achieve lasting change.”  One only has to look at China’s growth from centre of poverty and starvation to economic powerhouse.  I don’t want to discuss in too much depth the reasons for their economic progress but it is clear that China’s growth is not due to the state becoming more developed or democratic over the last 20 years.  Most importantly though, none of her growth can be attributed to aid as, according to DFID’s own figures, aid accounts for less than 0.1% of China’s GDP (and I suspect it’s a lot less).  Yet still China has worked poverty-reducing miracles.  DFID’s figures suggest that, despite absolute numbers of poverty remaining high, China has gone from nearly 60% of its population living on less then a dollar a day in 1981, to around 10% in 2004 and today, China’s per capita income is around $1300.   Tragically, over the same period the percentage of people living on less than $1 per day in aid-endued sub-saharan Africa has risen from 40% to nearly 50%.   

If one thing strikes home from all of this it is that despite the billions of taxpayers money forked out, China, with neither aid nor an improved system of government, is making the greatest headway in making poverty history.  It seems ridiculous that we should need such a reminder that development is not down to aid and government control as neither aid nor contemporary democratic niceties existed as we forged our own development.  Why we assume it must be needed by others is beyond understanding.

What has been written above is not as controversial as many may think.  Even the most ardent proponent of development aid accepts that it is not the answer alone and that it still has to prove its worth as a tool for reducing poverty.  However, they usually go on to argue that as it doesn’t do any harm, and as it makes us feel better about our own wealth, what’s the harm in continuing the giving and trying to make this experiment work?  The answer is that I believe that a strong case can be made for cancelling government “development aid” contributions on humanitarian grounds.  Whilst I have already highlighted that commercial development is not reliant upon good government, there is only so far it can go without it.  The metaphor is that of a human where the body is the people, the left leg is commercial development and the right leg is government and the aim is to climb the stairs of development.  The left leg has to take the first step, but there is only so far it can go before the right leg must catch up.  Once it has, the leg of commercial development can make the next step and so on.  Commercial development must lead, but government must be able to re-enforce it.  Tragically, at its core, the process of giving aid is one that reduces governments’ ability to influence the lives of their people.  In turn, this reduces their relevance, accountability, and capability.  There isn’t a country in the world that can afford this to happen to its government, but the poorest countries can afford it least.

This isn’t about the profligacy or waste within the aid world – of which tales are legion – but about an active destruction of political relevance brought about by injection of aid.  It’s a kind of botox for the state and the results are equally unnatural and horrific. One of the easiest ways of highlighting these issues is to imagine a simplified conversation between a developing country’s president and the person with all the aid money.

Person with AID: I have $100 million dollars to give to your country as a generous gift from the people of the developed world

PRESIDENT:  Excellent!!  Our bank account number is ……

AID: Oh, I’m sorry we can’t give you the money directly as we don’t trust you not to be corrupt and steal it.  You see we’ve had our fingers burned a few times and it seems that we spent many years funding yachts, swimming pools and private jets whilst 25 million Africans contracted HIV.  What we’d like to do instead is to fund projects designed by us and implemented through international partners like ICRC, OXFAM etc etc

PRESIDENT:  I see.  Well, as your intentions are good I don’t see any problem with that, let me speak to my people and let you know what is needed where.

AID: Ah, you see it’s not that simple either.  The thing is that we really don’t trust you at all and we think you’ll try to get us to spend our money in areas and on things that would benefit your tribe or your financial and political interests.  What we’ll do is send a group of experts from a variety of fields to do a survey of your country over a period of years.  When they return their findings, we’ll engage contractors to build roads, hospitals, wells and schools in all the right places.

PRESIDENT:  Do you not think the people of this country are the ones best placed to tell you where these things should go?

AID:  Don’t worry, our experts will ask the people as they travel your country.  Actually, they’ll only ask a few of them as security restrictions will probably not allow them to ask anyone from the really deprived areas.  The ones from accessible areas though, they’ll get asked a lot. Repeatedly, in fact, as our staff turn-over is such that we’ll have very little institutional knowledge of the country.  However, rest assured we will be consulting the people.

PRESIDENT: So, as president, while your teams of experts are surveying my country, asking my people for their opinions on where your money should be spent, what can I do to be a leader and inspire people as to the value of my office?   

AID:  Ah, I’m glad you asked that.  We do have some money to give you for government “capacity building”.  This will help you do things like set up government offices and establish the infrastructure for elections.

PRESIDENT:  Why do I need an office or need to be elected if your people are making all the decisions?

AID:  Well, you need an office to do all the presidential stuff required of you and it is also a good place employ your family and friends.  It’s really important that you have an election though otherwise we’ll stop giving you money.

PRESIDENT:  You’re not giving me money, you're spending it as you see fit.  Why should I want money that my people and I have no control over?   

AID: Well, if you don’t accept our generous offer to take over all the key decisions of state and to place ourselves at the centre of social expectation then you’ll be an international pariah and eventually be overthrown by your people who have grown to expect our contribution to your economy.   

PRESIDENT: So let me get this straight.  Your money will fund projects that involve outsiders travelling around the country making the key decisions of state such as routes of roads, locations of schools and hospitals etc?

AID: Yes

PRESIDENT: This process will demonstrate to the people that I have very little power within the country.  However, I can set up an office with your money to try to prove them wrong and to win an election in a country with 90% illiteracy, no infrastructure and no history of this kind of democracy.

AID:  Yes

PRESIDENT:  Now that the people are so reliant upon the external intervention and excited by its short-term benefits, I cannot win this debatably representative election unless you are supporting us and cannot lose it if you do.  However, you will not support us unless I do things exactly as you ask?

AID:  Yes

PRESIDENT:  Does this seem like an accountable, effective and fair way of running a country to you?  It seems more like me signing over my country for outsiders to run.  I don’t think the traditional tribal leaders that hold me to account will accept it.

AID: Don’t worry about the tribal leaders, all that village meeting stuff is terribly undemocratic.  The election will ensure that these old fashioned hereditary leaders become totally obsolete and wield no power whatsoever.  As for being outsiders, we are from the world’s most developed countries and so do have a jolly good idea of how development is achieved.   

PRESIDENT:  So this is how you developed?  Someone came in to your country, made you reliant upon them and made ill-informed decisions on the basis of partial consultation whilst undermining the relevance of government in the eyes of the people and planting a style of democracy totally inappropriate for the environment that can only lead to corruption?

AID:  Errr... no actually that isn’t what happened.  Technology allowed us to create new stuff and for our population to grow.  We then started to trade globally on equal or favourable terms and, via a few hundred years, several civil wars and, more recently, two devastating global conflicts... the whole accountability, democracy and civil society thing kind of grew from there.

PRESIDENT: Great!  We have fertile land, a temperate climate and a huge number of unemployed people with experience of agriculture.  Can you encourage some agricultural corporations to invest in this country so that we can use this global free trade to grow crops for sale and then use the money to develop rather than take your sovereignty-compromising hand-outs?   

AID: Well, you see that’s a little tricky.  The French are terribly touchy about their farmers and one of George Bush’s great friends grows peanuts so I’m afraid undercutting them through the effective use of your resources is a bit of a no go.

PRESIDENT: So the choice is take your money, lose my relevance and power and condemn my people to a lifetime of reliance but be given enough money to have a nice office and pay myself and my family a decent wage and win an election.  Or...

AID:  ...or nothing.       

Tongue-in-cheek and simplistically reduced it may be, but at its heart is the reality of the aid world’s engagement with developing countries.  Aid distracts the people from government failure whilst imposing democracy before it's time undermines the traditional institutions of governance.  This Catch 22 situation continues until, inevitably, a maniac takes power and, shored up by the destruction of traditional leadership, takes the country on a mad-cap journey to devastation.  Then, destroyed by corruption and war, the aid industry returns to this battered nation to start the whole cycle again. 

What is the alternative?  Well, there is no painless alternative and it depends on how much you believe the opening statements about the value of international development.  If you really want The Democratic Republic of Congo to one day compete with European powers then you allow them to trade fairly, you subsidise companies to operate from within their borders, and you watch with interest as their own systems of government and governance develop.  Unfortunately, the truth is that no government in the West really wants these countries to develop unless it is on their terms.  Do we really want an economic powerhouse in the middle of Africa which has modelled itself on China?  Do we really want to see all our wheat grown in Uganda, Southern Sudan and Ethiopia?  Can we really stomach forcing our farmers out of business or into the production of specialist goods to help another country develop?  The answer of this government is, of course, “No”.

Typical of them, however, is an insistence that this is not true.  They will insist that they really care about the developing world, hiding behind figures and gestures.  They cower behind monies given to projects that fail to make a difference and contributions made to a system horribly flawed.  A government of courage would stand with honesty and walk away from these token gestures and accept failure.   

However, a government that had both courage and vision would stand up to the vested interests of the aid world with all of its devastatingly well branded charities and radically review this failed experiment by calling them to account and insisting that they demonstrated strategic success.  They’d also drop trade barriers, encourage commercial investment and use the markets to help developing nations create their own change.  We don’t have to be threatened by trade or by the growing wealth of others, we need to embrace it, encourage it and make sure that we are using everything we have available to keep ourselves better educated, more innovative and more dynamic than our competitors.  There are mutual advantages to be had in development, and we shouldn’t be scared of the competition and uncertainty that it might bring.  I for one look forward to the day that an African country is described as a genuine competitor to the UK. I know they can do it and when it happens each and every one of us will be better off and we will be a full step closer to really making poverty history.