HS4331 – International Health Theory

Oct 19, 2009 - The Nature of Foreign Aid.

Classes.deonandan.com

Oct 21, 2009

• “Calibrating the balance – the utility of a human rights framework in the access to medicines debate”– Prof Dan Cahoy– Fauteux 351– 11:30am – 1pm– (lunch is included!)

Oct 26, 2009

• “Has God Forsaken Africa?”– Documentary screening and panel discussion– UCU 205, 7-10pm– Email mdguottawa@gmail.com for more info

Oct 27, 2009

• Science and Technology as International Development Strategy: the global AIDS vaccine effort– Presented by Dr Apuuli, Director General of

Uganda AIDS Commission– Desmarais room 110, 12th floor– 5:30pm to 7pm– Register by emailing sbuhler@icad-cisd.com

SUNSIH is no more.

What does this mean for you?

Attendance at SUNSIH is supposed to constitute 5% of your final mark. SUNSIH would traditionally be held Oct 24 of this year. So instead, we will try to host our own mini-event (at no cost) on Saturday Oct 24, from 9:am to 12:30pm.

Please check the class website (classes.deonandan.com) frequently this week for updates. As well, I will email final plans as soon as they are confirmed.

In the mean time, try to keep Saturday morning free.

“Canada’s aid to Mali has increased sharply in recent years, from about $20-million in 2002 to more than $100-million last year. Mali is now one of the five biggest recipients of Canadian aid, and it is one of the few African countries to remain on Ottawa’s trimmed-down priority list for foreign aid this year.” –Globe and Mail, Oct 10 2009

“I would strongly suggest that CIDA be abolished. Because at this stage, all we are doing is funneling money into countries that is not really seen," he said. "We saw tons of examples of dependencies created.“ - Bhupinder Liddar, Sep 2009

AID

• Two kinds of foreign aid:– Humanitarian aid: primarily for emergency relief– Development aid: aims to create long term

improvement in…• Health• Economic wealth• Other indicators of development

– Eg, human rights– Eg, education levels– Eg, government stability

AID

• Two distribution models:– Bilateral aid: given by the government of one

country directly to another.– Multilateral aid: given from the government of a

country to an international agency.

AID medium What type of aid is this?

World Bank

CIDA

IMF

USAID

multilateral

bilateral

multilateral

bilateral

Note: The term “aid” is misleading, because almost all the World Bank and IMF “aid” is in the form of loans

Terminology

• ODA = Official Development Assistance– It’s what we usually mean by official foreign aid

• GDP = Gross Domestic Product– total market value of all final goods and services

produced in a country in a year– Traditional way to measure the size of an economy

• GNI = Gross National Income– GDP + [income received from abroad, e.g. investment

interest] – [similar payments made to other countries]

Other (Debatable) Aid Categories

• Private aid– Money given by private citizens to charities, which

then effect aid

• Remittances– Money sent home by foreign workers– World Bank estimates $1.2 billion transferred to

developing world via remittances in 2004

-free of government political agenda-may reflect personal agendas (eg religious)

-IMF thinks this may have neg. effect on economies-remittances used by private families, not countries

Specific Types of Aid• Project aid: given for a specific purpose e.g. building materials for a new school.

• Programme aid: given for a specific sector e.g. funding of the education or health sector of a country.

• Budget support: A form of Programme Aid that is directly channelled into the financial system

• Sectorwide Approaches (SWAPs): A combination of Project aid and Programme aid/Budget Support e.g. support for the education sector in a country will include both funding of education projects (like school buildings) and provide funds to maintain them (like school books).

• Food aid: Food is given to countries in urgent need of food supplies, especially if they have just experienced a natural disaster.

• Untied Aid: The country receiving the aid can spend the money as they chose.

• Tied Aid: The aid is used by the country donating it to build infrastructure, purchase goods etc.

• Technical assistance: Educated personnel, such as doctors are moved into developing countries to assist with a program of development. Can be both programme and project aid.

• Emergency aid: This is given to countries in the event of a natural disaster or human event, like war, and includes basic food supplies, clothing and shelter.

Humanitarian Aid

• Humanitarian aid is material or logistical assistance provided for humanitarian purposes, typically in response to humanitarian crises

• The primary objectives of humanitarian aid are to save lives, alleviate suffering, and maintain human dignity.– (c.f. development aid, which seeks to address the

conditions that may have brought about the crisis)

Humanitarian Aid

• The Sphere Project was launched in 1997 to define a minimum set of standards for humanitarian assistance– Care International– Caritas Internationalis– International Committee of the Red Cross– International Federation of the Red Cross– Oxfam– MSF– Etc

Humanitarian Aid• Sphere Project

– produced the handbook, Humanitarian Charter and Minimum Standards in Disaster Response

– Download it from here: www.sphereproject.org

• Decided upon 3 fundamental principles of humanitarian assistance:– The right to life with dignity– The distinction between combatant and non-

combatants– The principle of “non-refoulement”

Humanitarian Aid

• Sphere Project– “non-refoulement”

• A principle in international law –specifically refugee law– which concerns the protection of refugees from being returned to places where their lives or freedoms could be threatened.

• Not the same as “political asylum”, which is the idea of protecting individuals with proven threats to their safety; rather, it involves large populations, generally in war zones or after disasters

• Essentially, it forbids the repatriation of people to a place where they will again be subjected to persecution

Development Aid• Origins:

– Harry Truman, at end of WWII: “...In addition, we will provide military advice and equipment to free nations which will cooperate with us in the maintenance of peace and security. Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. More than half the people of the world are living in conditions approaching misery. Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people.“

The previous speech was given at the founding of NATO (North Atlantic Treaty Organization). What does this suggest?

Aid is often linked to other foreign policy agendas, including security

Let’s not forget…

Canada’s #1 recipient of foreign aid is:

The USA’s #1 recipient of foreign aid is:

Afghanistan

Iraq

Criticism of Aid

• Criticisms of intent:• Aid is seldom given for reasons of pure

altruism• Often given as a means of supporting an ally• Often given as a means of influencing the

political process in a recipient country• Aid by capitalistic organizations, like the

World Bank and IMF, seen as only meant to open up new markets for Northern countries

Criticism of Aid• Criticism of effectiveness:• Much foreign aid is “stolen” by corrupt

bureaucrats in recipient country• Much foreign aid is “stolen” by corrupt

bureaucrats in donor country– Too much aid is absorbed by administration in donor

country• No evaluation process, so we don’t know what

“good” we’re actually doing• Are we getting enough “bang” for our buck?

More Criticism of Aid

• Ideology– Many aid programmes are ideologically driven,

and not scientifically based• Focus on faith-based interventions• Focus on free market economics

• Debt– Because so much aid is given in the form of debt,

it actually causes more damage in the long term by increasing the indebtedness of recipient country

Example of Agenda-Stricken Aid

• The Marshall Plan-post WWII (1947)-named for US Secretary of State George Marshall-plan for the US to fund the rebuilding of Europe, to make her profitable and better able to fend off Communism in the future-resulted in a very strong and wealthy Western Europe

Criticism:-not altruistic, but an attempt to gain control over Western Europe, as the Soviets gained control over Eastern Europe-not effective, since nations with biggest investments (Britain, Sweden, Greece) saw least growth, while those with smallest investments (Austria) saw most growth

More Criticism of Aid• James Shikwati (Kenyan economist):

– Aid is ultimately damaging since in almost all cases of bilateral aid, the money is given to corrupt leaders to disburse, resulting in skewed distribution and damage to the local economy

– Aid used by (African) politicians to manipulate people and influence votes– Food aid dumped at low cost on peasants, killing the indigenous food industry

– Libertarian– Believes more trade is best way to alleviate poverty

Even More Criticism of Aid

• Dambisa Moyo– author of Dead Aid: Why Aid is Not

Working and How There is a Better Way For Africa

– Zambian economist– Limitless aid has fostered dependence,

and perpetuates the cycle of poverty– Advocates for cessation of all aid to

Africa, and instead for trade improvements

Opposing View• Jeffery Sachs (American economist):

– “Africa’s governance is poor because Africa is poor”– 2005 report

(hwww.unmillenniumproject.org/reports/fullreport.htm)• Calls for increased development aid • Calls for reallocation of aid priorities

– Essentially opposite view to Shikwati’s: that we need to overwhelm poverty with serious aid commitments

– Read interview with him here: www.motherjones.com/news/qa/2005/05/jeffrey_sachs.html

Opposing View To The Opposing View

• William Easterly (another American economist):– Read his response to Sachs’ plan here:

www.washingtonpost.com/wp-dyn/articles/A25562-2005Mar10.html

– Read his on-going correspondence war with Sachs here:www.nyu.edu/fas/institute/dri/Easterly/SachsDebates.htm

– “Poverty never has been ended and never will be ended by foreign experts or foreign aid. Poverty will end as it has ended everywhere else, by home grown political, economic, and social reformers and entrepreneurs that unleash the power of democracy and free markets.”

Moyo-Sachs Debate

• Sachs’ original article (May 24, 2009)– http://www.huffingtonpost.com/jeffrey-sachs/

aid-ironies_b_207181.html

• Moyo’s response (May 26, 2009)– http://www.huffingtonpost.com/dambisa-moyo/

aid-ironies-a-response-to_b_207772.html

Why Do We Have Aid?• Is it for altruistic purposes?

– We want to do good in the world

• Is it for strategic purposes?– We want to develop foreign markets for our products– We want to bribe foreign governments to obey our wishes– Reward our friends, punish our enemies– Prevent the creation of refugees, terrorists, disease

• Is it for image purposes?– No one wants to look cheap

• Is it for domestic purposes?– International development is a multimillion dollar industry– Keep highly paid consulting firms in business

Foreign Aid per capita, 2007 (from nationmaster.com)

-government aid only

Foreign Aid per GDP, 2007 (from nationmaster.com)

-government aid only

0.7%

• In 1969, Prime Minister Lester Pearson wrote a report for the World Bank called “Partners in Development”

• Recommended that all developed nations should give 0.7% of GNI as foreign aid (ODA)

• In 1970, the UN passed a resolution under which almost all developed nations agreed to the 0.7% commitment

0.7% cont’d• By 2005, the average committed nation was donating

0.47% of GNI• Canada was donating 0.34%• Canada’s highest donation was in 1975, when we gave

0.53%• Countries who have met their commitments:

– Denmark (0.85%)– Luxembourg (0.83%)– Netherlands (0.73%)– Norway (0.87%)– Sweden (0.78%)

From:www.tbs-sct.gc.ca