Why foreign aid still matters for developing countries
août 9, 2012
by JOSEPH K. INGRAM
The National Post
A growing number of development economists, including yours truly, believe that cuts to foreign-aid budgets, such as the ones recently made by the Canadian federal government, reflect a broader trend in the global economy, a trend that is producing the end of international development as we have known it.
Foreign aid from 14 of the 27 donor states in the Organization for Economic Cooperation and Development (OECD) was reduced in 2011-2012. Nevertheless, the cuts to both the Canadian International Development Agency (CIDA) and the International Development Research Center (IDRC) were such that Canada will soon find itself amongst the lower rungs of the international donor community ¡X a significant development for a country that historically has been one of the worlds leaders in supporting global development and international co-operation.
And yet, there has been little public debate in Canada over these cuts to foreign aid. It would seem that an increased number of Canadians see aid as having been largely wasted and of little benefit to developing countries.
As in parts of the U.S. political and military establishments, there now seems to exist a prevalent view that international development is somehow equivalent to nation building and that, as exemplified in Afghanistan, nation building doesn’t work.
Instead, we are advised that we ought to leave developing-country governments and their populations to their own devices; with others suggesting that they would be best assisted by Chinese investment and the magic of the free market. If only it were that simple.
Development is not equivalent to winning a war, nor is aid the equivalent of military intervention. And yet, those asked to contribute to the public dialogue on international development are more often defence or security experts than development professionals or officials from developing countries, thereby contributing to a context in which international development and the instrument of aid falls quietly from the global agenda.
This is happening at a time when most analysts would agree that the defining challenges of 21st century international development are being driven by an historically unprecedented process of global transformation and uncertainty that includes:
- Geo-political shifts in power from the OECD economies to Asia, Latin American and the Caribbean and sub-Saharan Africa;
- Accelerated technological developments raising youth expectations globally;
- The emergence of a new global middle class, dramatically intensifying demand for the planet¡¦s finite natural resources;
- Demographic changes in developed and emerging economies affecting prospects for future economic growth as well as the pattern of its distribution;
- And widening income gaps within and between countries.
A critical result of these transformations is that the very nature of international development is changing, as are the instruments needed to support it. New risks and opportunities are emerging as different economic powers assert themselves, and established economies find themselves in a relatively weakened state.
Some see these risks as nationally threatening, and respond to them with public policies such as increased defense spending, stronger controls on immigration, higher levels of trade protection, or the dismantling of environmental safeguards. Others see these risks as more threatening to the global commons the environment, climate, international health, global financial flows, food security, fragile states and weapons proliferation; with today’s international institutions seen as ill-equipped to deal with these new order risks.
The established economies are looking more inward, while the emerging ones are reluctant to commit to existing global institutions so long as they feel inadequately represented.
And yet failure to contribute to foreign aid and to collective solutions will continue to produce widening income gaps, unrealized expectations among a volatile bulge in the number of young people, and a fraying of whatever social consensus has been created both at a national and international level. Fundamentalism of all sorts will continue to emerge and the prospect of economically, socially and environmentally sustainable development will become increasingly remote not the direction in which we as Canadians, nor we as global citizens, would want the world to move.
Since the Second World War, unprecedented progress in the human condition has been made, and through the efforts of governments, multilaterals, businesses, and NGOs, hundreds of millions of individuals have emerged from poverty and despair. But much work remains.
If our commitment to international development, foreign aid and the multilateral organizations that support it continues to waver, we not only risk undoing the great strides that we have already taken toward more responsible global development, but also creating an even more uncertain and unstable world.
Joseph K. Ingram is president and CEO of the North-South Institute in Ottawa.