Why does external aid fail?: Ramesh Shrestha

In the beginning

Assisting people is considered a benevolent act in all societies and in all religions. And by extension the same logic applies for rich countries assisting poor countries. The idea of giving aid picked up during the 1960s, soon after the end of colonialism where rich countries started providing financial aid to developing countries through bilateral assistance programmes with a view to helping in their economic growth and development. The focus of aid also showed the relationship between the former colonial powers and the recipient countries such as France, Britain and Spain focusing on their former colonies. As the idea of international aid grew, many wealthy countries started providing assistance to developing countries beyond such colonial links.

Motivation for providing aid

In 1970 there was a proposal in the Development Assistance Committee of the OECD countries to set aside 0.7% of their gross national income as foreign aid to developing countries (endorsed by the UN in 1971; currently only five out of 22 DAC countries meet the proposed target). However, there are always strategic considerations in deciding which countries qualify for development aid. There are few success stories such as the Republic of Korea, which has even become a member of OECD club in 1996. Countries like Thailand, Singapore, the Philippines, Taiwan, Japan and Republic of Korea which hosted US military bases during the Korean War and the Vietnam war received considerable aid including private sector development and the establishment of western industries which propelled their socio-economic development. There are not many studies on the impact of such aid on the development of recipient countries.

During the Cold War decades all countries were governed by their traditional system and the rudiments of the system inherited from the colonial administration. The dissolution of the Soviet Union in 1991 gave a new meaning of bilateral aid. Providing aid began to be linked with certain conditions such as such as promotion of democracy, human rights, women's rights, individual freedom, trade liberalism, LGBT rights, etc. This sudden link between external aid and reform in governance was new and unexpected. The irony is that while some countries with the most brutal regime were being supported with unlimited aid, others were pushed aside for not being democratic enough. Since 2001, cooperation in controlling terrorism has also become an important component of development assistance. Many developing countries simply do not have the necessary human and technical resources to implement many of those reforms demanded by the West.

Visibility vs. priority

Promoting aid to support least developed countries has become an agenda of politicians, singers and actors. It may have started with altruistic intentions but these movements simply remained a one-off slogan. In 2001 during the labour party convention Tony Bair said 'the state of Africa is a scar on the conscience of the world'. Did Tony Blair forget the history of Africa?

All donors want visibility of their assistance. It is part of promoting their foreign policy. To ensure such visibility some bilateral agencies have their assistance focused on themes such as climate & environment, women's health, etc. while some focus on a small number of target countries for a better impact. For example, Canada has identified ten priority countries as top recipients of its external assistance. Naturally the return of assistance has to be immediate so that the Minister of Development, or the Ambassador or the Head of UN agency will be able to show what was accomplished during their short tenure. Hence, all foreign aid is aimed with a view of short-term outcomes such as building a few classrooms, providing an x-ray machine or constructing an orphanage or providing a truckload of medical supplies, which achieves the aim of visibility.

The priority needs of developing countries are in improving governance, strengthening administrative infrastructure, controlling corruption, maintaining accountability through checks and balances. But funding agencies keep these issues at bay treating these issues as sovereign matters of the recipient governments. The governments are also reluctant for external agencies to get involved in some of these issues. The World Bank and the UNDP have some projects related to these issues in some countries but it barely scratches the surface.

One size fit all

In the case of UNICEF, the outcome is dictating the process by default. For us to have one standardised annual report we have one programming guideline for all country programmes from Afghanistan to Zimbabwe. For example, a case in point from my personal experience in the situation in Ghana, Yemen and Myanmar. The programming environment in three countries have nothing in common in governance, economy and sociocultural constituency. Ghana is assumed to be a stable and democratic country since the end of the military regime which lasted from 1979 till 1992 and as a democratic country from 1992 till 2001 – all under charismatic Captain J.J. Rawling. In Yemen, traditional tribal chiefs rule most of the country; the central government has no control outside city centers. And in Myanmar the governance has been with a water tight military regime since 1962 with a short gap in 1988 and 2011. But UNICEF has one programming guideline to follow and report in all these three countries. While basic needs of children are the same such as education, health care and child protection the government institutions and local infrastructures in these countries operate at a different stratosphere upon which UNICEF has to rely.

In Ghana several likeminded bilateral assistants started direct budget support starting in 2002 but in Yemen, even a loan from the World Bank for a Child Development Project, which the Yemeni government has to repay was channelled through and implemented by UNICEF for lack of trust. And in Myanmar no cash is to be disbursed through the government, which was seen as strengthening the military regime. We seem to forget that all school teachers, health workers and child protection workers with whom UNICEF works are paid military government employees. One other interesting example from Myanmar was that UNAIDS had to ensure that condoms distributed by UNAIDS do not reach the military personnel. The entire government apparatus is operated by the military. The Minister of Health was the personal physician of the Senior General. Who comes up with such crazy ideas?

Coming back to UNICEF while our programming guidelines are fairly constant annual reporting which changes almost every year was a joke. We are interested in knowing $ spent on unit cost of supplies, services, travel, 'capacity development', etc. There are no signs of interest to measure quality of education or children protected from abuse or children rehabilitated after being rescued from traffickers or contributions to reducing infant and child mortality.

AID industry

There is a sizable community of national and international non-governmental workers in many developing countries disbursing part or whole of donor's development assistance. While the work process of NGOs is flexible and efficient their presence at times not only competes but actively undermines the role of the governments. There are always favourite local and international NGOs who also act as eyes and ears of the funding agencies. There are even cases where some of these NGOs are deliberately acting against the interest of the government. I am not suggesting who is right or who is wrong; these are just the bitter truths in the field which many are familiar with but no one talks about.

Is there a solution? Maybe

UNICEF has no foreign policy agenda. UNICEF's constituency are children but they are not UNICEF's children. The custodians of those children are the governments with whom we work. To improve the lives of those children and to provide them with better opportunities for their future most governments need to reform. This is where international aid should be focused in strengthening programme planning, delivery, stopping leakages and accountability, while continuing to provide ongoing short-term investments. This is not a call to adapt Westminster's style or a federated system of government; simply to reform the existing system. It is possible if funding agencies have the will.

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