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THE AID DEBATEAGTI Annual Conference
GalwayOctober 2011
Food for thought... After 60 years of aid, there are almost one
billion people hungry in today’s world…...
"Government-to-government transfers are an excellent method of transferring money from poor people in rich countries to rich people in poor countries."
Peter Bauer - British academic
“It seems as if America needs hungry Africans to eat their surplus.”
Quote by an Ethiopian farmer
Some Statistics More than $100 billion is transferred to the
South every year in official aid and through private charities.
However, remittances account for more than twice as much as all official aid.
Sub-Saharan Africa – the world’s poorest region – receives the largest amount of aid of any region – approx $52 per year per capita.
Some more statistics ... Aid to South-East Asia and the Pacific is
about $4 per capita per year.
Some African countries are very dependent on aid. For instance, aid to Liberia and Burundi equals about half of their GDP.
After several decades of receiving aid, Africans are poorer than ever!
Aid – Development Assistance
Aid is a partnership between donor countries and recipient countries.
Aid is an industry today.
Aid has been in operation since the middle of the 20th century.
Key Terms - aid Official aid Bilateral aid Multi-lateral aid Emergency aid Voluntary aid - NGOs Short Term vs. Long Term aid
(A) The USA insisted that Africa’sgovernments purchase anti-AIDS drugs from the USA instead of buying cheaper generic products from South Africa, India or Brazil.
(B) In Vietnam, a €2.3 million tied aid package from Italy is funding the building of the water system in an urban setting. An Italian company is setting up the Vietnamese flood monitoring system at a cost of €2.5 million.
Tied Aid
The Good Guys Only six countries – Ireland,
Luxembourg, the Netherlands, Sweden Norway and the UK – provide more or less 100% untied aid.
Tied aid was made illegal in the UK with the International Development Act of 2001.
Food Aid by Major Donors 1995-2005
Japan; 6%
European Union; 25%
Canada; 5%
Aus-tralia;
3%
United States; 59%
Others; 2%
Time 1999: “One of the world’s 100 most influential people”
Dambisa Moyo’s Arguments Aid makes people lazy
It makes recipient governments lazy – they do not pursue tax revenues
Aid fuels corruption
It discourages enterprise
Dambisa Moyo’s Arguments Public services that governments
should provide are provided by aid agencies
Aid dependence becomes an addiction
Outsiders call the shots.
Dambisa Moyo’s Solutions
Cold turkey
Inward direct investment
A market economy
Aid must be targeted at real needs. Aid Recipients must be accountable to donors.
OTHER PRIORITY COUNTRIES:Sierra Leone LiberiaSouth AfricaPalestine
OTHER PARTNERCOUNTRIES: Vietnam East Timor
IRELAND’S PARTNER COUNTRIES
ODA - %age of GNP
2000 2001 2002 2003 2004 2005 2006 2007 2009 2009 20100.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
YEAR
Perc
enta
ge
Ireland - ODA in €m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
100200300400500600700800900
1000
YEAR
Mill
ions
of E
uros
ODA - %age of GNI (2010)
Norway
Luxe
mbourg
Sweden
United Kingd
omIre
land
Germany
United St
atesJapan
GreeceIta
ly0.00
0.20
0.40
0.60
0.80
1.00
1.20
An NGO example
The Trade/Aid Debate Africa in 1960: A bright future China in 1960: A basket case
Africa today: A continent in crisis China today: ……….Double digit
growth
Is Trade a better bet for Africa??
LCHL QUESTIONExamine two major issues
that arise from the international aid debate.
Tied AidDependenceFood Aid