2004/08/26

When the interest is bigger than the loan

A. Corbillón
NorteCastilla.es

NGOs demand that development aid projects cease being a ‘political football’ and start reaching the people who most need them. For every euro received by poor countries as aid, they end up giving back at least the same amount in trade obligations or in revenue evasion in tax-free havens. Development aid, supposed to show the commitment of international organisations and developed countries to narrowing the gap between North and South, the rich and the poor, is coming increasingly under question. The same hands that reputedly give, later take away even more.

WHEN THE INTEREST IS BIGGER THAN THE LOAN

NGOs demand that development aid projects cease being a ‘political football’ and start reaching the people who most need them

DEVELOPMENT AID: THE DONORS

The 0.7% Objective

Among Western countries, only Denmark (0.96%), Norway (0.89%), The Netherlands (0.81%) and Sweden (0.83%) fulfil this commitment.

Least Generous Countries

The United States is the stingiest (0.13%), together with Italy (0.20%), Japan (0.23%) and Spain, Australia and Austria (0.26%).

WHERE THE MONEY GOES

Politicisation

Western countries have concentrated their funding in countries where they have particular interests (Iraq, Afghanistan), and have forsaken 40 other armed conflicts involving 35 million displaced people.

Economic Ties

For every euro received by poor countries as aid, they end up giving back at least the same amount in trade obligations or in revenue evasion in tax-free havens.

One hand gives, the other takes away

Development aid, supposed to show the commitment of international organisations and developed countries to narrowing the gap between North and South, the rich and the poor, is coming increasingly under question. The same hands that reputedly give, later take away even more. The struggle to persuade developed countries to give 0.7% of their wealth to the poor is fading into the background, and international organisations are increasingly insisting that the ‘small print’ of development deals is sinking the supposed beneficiaries even further into the mire.

To take the case of Spain, the new government has promised to increase its development aid from the present level of 0.24% to 0.33% in 2006, and to 0.5% in the medium term: a total of over 3,000 million euros in development aid. However, Spain’s reticence, the USA’s stinginess (0.13%) or Sweden’s generosity (0.83%) make no real difference, for the statistics of underdevelopment continue to grow at the same rate as the deficits and the debts of all categories of countries that receive aid.

By 2015, the 191 states belonging to the United Nations have promised to fulfil the Millennium Objectives, an eight-point agenda focused on fighting the poverty and marginalisation borne by more than 2,000 million people. “The Millennium Objectives are very clear about the obligations of the developing countries, but they are very vague about the obligations of the richest countries in terms of deadlines and commitments...”, says Marta Arias who is responsible for Intermon’s Development Financing campaigns.

The Poor Pay Back More

While the Spanish Government has announced a new Policy Plan for Aid, a seminar at El Escorial’s Summer University has been analysing the aid agenda, under the title “Action on Globalisation: ten challenges, ten proposals”. Under the microscope are critiques of what has been happening in the last few years, when these programmes have been characterised by their commercial orientation. The analyses carried out by Spanish NGOs are conclusive. It is unlikely that countries like Ethiopia and Somalia (two of the poorest in Africa) will ever develop, when in 2003 they paid back to Spain in trade agreements more than they received in aid.

A wide-ranging study by the NGO Social Watch has laid bare the reality of the situation, and accuses Westerners of unfair dealing and of making political capital out of aid. Spain sends aid to “middle-income countries and consistently ignores Africa”, according to the Intermon memo “Aid for social development”. In Spain alone, six different ministries are involved in aid agreements, and these are often only preferential credit agreements linked to the purchase of Spanish goods (including arms).

The international community is no better. Although there are 40 armed conflicts going on in the world today, and 35 million people have fled their homes, global aid is focused on just one or two crisis situations. “Iraq is the clearest example”, explained Consuelo López Zuriaga, head of Institutional Relations for Médécins sans Frontières. “Last year, humanitarian needs were greater in other regions, but the political agenda diverted aid to Iraq”. The year before last, the same thing happened: everything went to Afghanistan because it is full of Western interests and soldiers, and hardly anything went to 23 other major crises. Social Watch tracked data that Spain sent to the United Nations and concluded that it “has only contributed aid to 3 out of 21 declared humanitarian crises”.

Better Governance

NGOs take a positive view of the round of talks held by the State Secretariat for Aid in order to hear their views, but there ought to be two sides to this exchange. “A wider view should be taken of the issues, and criteria are needed to follow-up what is done with the aid. In other words, we need to improve our aid and at the same time encourage good governance in the aid-receiving countries,” says Marta Arias. The truth is that NGOs have also perceived that increasing the supply of aid funds has only created higher expectations and demand in receiving countries. Aid has also given rise to plenty of corruption, which claws back sizeable quantities of aid from the intended beneficiaries. This misdirected money goes locally to fatten those who engender even greater misery for their own compatriots.