INTERNATIONAL AID: UNITED NATIONS, IGOS & NON-GOVERNMENTAL ORGANIZATIONSA Presentation of Small Change Big Changes

Institutions of Aid and Development International Monetary Fund (IMF) World Bank (WB) United Nations (UN) Mission specific organizations: WHO,

UNICEF, Assorted Regional Development Banks

and Cooperatives Non-governmental Organizations (NGOs) State actors delivering direct aid

Questions to Consider

What did you know about IGOs before this lesson and was your image of them negative, positive, or neutral?

How has this information changed your perception? Do you think the US is actively participating in aiding the

global economy.  If so, how and if not, how not and why not?

What form of international aid disbursement seems best? How should aid effectiveness be measured? How can International NGOs genuinely incorporate input

from the communities in which they work in assessing their aid effectiveness?

How can NGOs improve the effectiveness of their aid? 

A Brief History of Development Aid The World Bank and the IMF were

created at the Bretton Woods conference in 1944 Twin institutions intended to ensure

financial stability and security from economic shocks

Focus shifted over the decades from poverty alleviation to debt management and structural adjustment to sustainable develop assistance

Adapting Strategies

Five key factors identified for successful development: Build capacity – Strengthening governments and educating government

officials Infrastructure creation – implementation of legal and judicial systems for

the encouragement of business, the protection of individual and property rights and the honoring of contracts

Development of Financial Systems – the establishment of strong systems capable of supporting endeavors from micro credit to the financing of larger corporate ventures

Combating corruption Research, Consultancy and Training

Comprehensive Development Framework: Development strategies should be comprehensive and shaped by a long-

term vision Development goals and strategies should be “owned” by the country,

based on local stakeholder participation in shaping them Countries receiving assistance should lead the management and

coordination of aid programs through stakeholder partnerships Development performance should be evaluated through measurable

results on the ground in order to adjust the strategy to outcomes and a changing world

MGDs: A Modern Framework

The UN annually publishes the Human Development Index (HDI), a comparative measure ranking countries by poverty, literacy, education, life expectancy, and other factors. http://hdr.undp.org/en/statistics/

The Millennium Development Goals are eight goals that all 192 United Nations member states have agreed to try to achieve by the year 2015. This was declared in the United Nations Millennium Declaration, signed in September 2000.

Millennium Development Goals http://www.mdgmonitor.org/ eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria, and other diseases; ensure environmental sustainability; and develop a global partnership for development.

Justifications

Large disparities in the world difficult to bridge by traditional development processes

Insurmountable “poverty traps” which prevent growth Include issues such as: endemic illness,

degradation of arable land, unstable political climate, frequent conflict

Marginalized segments of populations remain bereft: women, children, chronically ill Particularly susceptible to death from

preventable causes, often disenfranchised

Failures of Commitment?2007 International Aid Donated (Official Development Assistance)

COUNTRYFor each $100 earned in the country, how much is donated in aid

Aid as % of income

How close the country is to reaching the 0.7% goal

Norway 95 cents 0.95 Already reached goal

Sweden 93 cents 0.93 Already reached goal

Luxembourg 90 cents 0.90 Already reached goal

Denmark 81 cents 0.81 Already reached goal

Netherlands 81 cents 0.81 Already reached goal

Ireland 54 cents 0.54 Scheduled to reach in 2012

Austria 49 cents 0.49 Scheduled to reach in 2015

Belgium 43 cents 0.43 Scheduled to reach in 2010

Spain 41 cents 0.41 Scheduled to reach in 2012

Finland 40 cents 0.40 Scheduled to reach in 2010

France 39 cents 0.39 Scheduled to reach in 2012

Germany 37 cents 0.37 Scheduled to reach in 2014

Switzerland 37 cents 0.37 No schedule yet

United Kingdom 36 cents 0.36 Scheduled to reach in 2013Australia 30 cents 0.30 No schedule yetCanada 28 cents 0.28 No schedule yet

New Zealand 27 cents 0.27 No schedule yet

Italy 19 cents 0.19 Scheduled to reach in 2015

Portugal 19 cents 0.19 Scheduled to reach in 2015Japan 17 cents 0.17 No schedule yet

Greece 16 cents 0.16 Scheduled to reach in 2015

United States 16 cents 0.16 No schedule yet

Myths of Aid: Blaming the Victim While many accuse the LCD of failing to follow prescribed

development strategies and ensuring their own stagnation, the evidence suggests otherwise

Africa has received increasing amounts of aid over the years—in fact, aid to Sub-Saharan Africa fell by 48% over the 1990s

Africa needs to integrate more into the global economy—in fact, trade accounts for larger proportion of Africa’s income than of the G8

Economic reform will generate new foreign investment—in fact, investment to Africa has fallen since they opened up their economies

Bad governance has caused Africa’s poverty—in fact, according to the UN Conference on Trade and Development (UNCTAD), economic conditions imposed by the IMF and the World Bank were the dominant influence on economic policy in the two decades to 2000, a period in which Africa’s income per head fell by 10% and income of the poorest 20% of people fell by 2% per year

Bias and Prejudice

Nations direct aid to where it will benefit them Towards nations with favorable economic practices Towards politically sympathetic nations Towards culturally similar nations

Aid tied with conditions cut the value of aid to recipient countries by some 25-40 percent, because it obliges them to purchase uncompetitively priced imports from the richer nations

Example: US purchases American pharmaceuticals for HIV/AIDS relief programs and uses Caterpillar equipment to support construction of infrastructure

Continued

Example: To take one example, much has been made of America’s generosity towards Africa under the Africa Growth and Opportunity Act (AGOA)…Under AGOA’s so-called rules-of-origin provisions, the yarn and fabric used to make apparel exports must be made either in the United States or an eligible African country. If they are made in Africa, there is a ceiling of 1.5 per cent on the share of the US market that the products in question can account for. Moreover, the AGOA’s coverage is less than comprehensive. There are some 900 tariff lines not covered, for which average tariffs exceed 11%. According to the International Monetary Fund (IMF), the benefits accruing to Africa from the AGOA would be some $420m, or five times, greater if the US removed the rules-of-origin restrictions.

Failures of Delivery?

Economist William Easterly argues that large hulking Western institutions cannot deliver aid effectively and have squandered many resources and opportunities in the past. Makes distinction between bureaucratic planners and

innovative searchers Strong advocate of NGOs, locally rooted organizations

Planners not mal-intentioned: their education, culture, society, etc., is geared towards perpetuating the existing system, so they cannot think outside of that “framework of orientation,” a critique offered by J.W. Smith

Others, such as Ha-Joon Chang note the hypocrisy of Western prescriptions Nascent world powers often engaged in protectionism to

shelter industries Free trade beneficial amongst well-matched competitors

Alternatives

BOP strategies: hope to unleash entrepreneurial and productive power of the underprivileged

Stabilize and Liberalize: nations such as China, India, Turkey have enjoyed growth by allowing large private investments from developed nations. Stability often presents a significant challenge

Some areas “ungovernable” Territorial disputes undermine government authority

Protectorship and Partnership: either rely upon a developed nation to directly control or closely assist

Haiti: Revisited

http://www.nytimes.com/2010/01/31/world/americas/31reconstruct.html

http://www.newyorker.com/talk/comment/2010/01/25/100125taco_talk_packer

http://www.economist.com/opinion/displaystory.cfm?story_id=15330453

http://www.cfr.org/publication/21270/what_haiti_needs.html?breadcrumb=%2Fregion%2F223%2Fhaiti

http://www.economist.com/opinion/displaystory.cfm?story_id=15330453

http://www.cfr.org/publication/21270/what_haiti_needs.html?breadcrumb=%2Fregion%2F223%2Fhaiti

Other Considerations

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