Wednesday, 1 May 2013

Aid, dependency and illusory goodwill



The above map shows the GDP distribution in Africa in 2012. The darker the colour, the richer the country relatively. Africa is still the poorest continent by some distance so even the darker shaded countries are not exactly doing well on a global scale.

The UK's decision to end aid to South Africa looks sensible on this view. South Africa is clearly a wealthy country by African Standards and despite many claims to the contrary, the economy has not collapsed since the end of apartheid and instead has shown modest growth; the major downside is unemployment at 23% which is both high and hard to bring down. South Africa is hardly alone in the world though at struggling to provide jobs when the population growth is 1% a year.

South Africa has reacted saying that it wants aid, this is a bad sign of a kleptocracy however that sees all foreign money as adding to the purse into which hands can be dipped. Compare and contrast the South African response today:

This is such a major decision with far reaching implications on the projects that are currently running and it is tantamount to redefining our relationship.


Ordinarily, the UK government should have informed the government of South Africa through official diplomatic channels of their intentions and allowed for proper consultations to take place, and the modalities of the announcement agreed on.

with responses printed in the Guardian to the withdrawal of aid from India:

Indian experts from across the political spectrum welcomed the aid move. Surjit S Bhalla, a Delhi-based consultant and former World Bank economist, said the British decision was "enlightened". "I don't think it makes a huge amount of difference. The whole concept of aid is very old and not necessarily relevant for modern times. These programmes were constructed when India and emerging nations were very poor," he said.
Instead, Bhalla said, investment should be largely focused on technical assistance in key areas such as sanitation or solar power in villages currently without electricity. The Indian government already ran a range of vast and often very wasteful welfare programmes. Compared with government expenditure on subsidised gas, for example, the British contribution of £280m annually was minimal, Bhalla said.
Dunu Roy, of the respected Hazards Centre, which supplies research to Indian NGOs, said his reaction to the news was "good riddance". "All aid was tied up with conditionalities so hopefully now Indians will have a better chance of doing what they want," he told the Guardian.
Jayati Ghosh, a professor of economics at Jawaharlal Nehru university, New Delhi, said she did not think too many people would notice the end of British aid. "It is not that there are no minor successes, but in general the nature of the spending has not been such that it will really be missed. It had a tendency to follow the latest development fashion. So it was privatisation, then microcredit and now conditional cash transfers. It made little positive difference."

Grown up countries do not even want aid. This is before even mentioning a great article on the BBC this morning which discusses the rise of orphanages in Cambodia to meet the demands of 'volunteer' tourists.

It is such a difficult moral subject Aid, that I do wonder why it is such a lodestar of the current government.  There is much to be said for a more realpolitik approach to aid, at least we can see some of that now with the big recipients being Afghanistan and Pakistan.


17 comments:

hovis said...

Aid is given by those who wish to feel superior and purchase a feeling of being 'moral'. It rather like the modern fad for Charidee - little more than the modern equivalent of indulences.

As to aid Africa remins kleptocratic as whole. There are encouraging signs in some places. In my experience Ghana has the possibiklity of doing well on its oil wealth. Nigeria has seen its corruption level fall in the last few years but there are worrying signs.

If you look at the greatest difference I think the non guily loaded Chinese approach has doe much to move (some) things forward.

Nick Drew said...

as opined before, I'm betting that Cameron's attachment to aid stems from some personal commitment he made before the election

the hand on the knee, the misty smile ... David, you do promise me the aid budget will be sacrosanct, don't you ..?

as we know, he's a great one for loyalty to friends and personal commitments - way beyond the point of good judgement

dearieme said...

The point of government is to let us do collectively things that we can't do, or can't do so well, individually. Therefore government "aid" should be scrapped entirely; we can all give individually if we feel like it. In fact, if the government were to announce that it's scrapping aid and that that would save me £x pounds a year in tax, I would happily donate the £x pounds. Mind you, it wouldn't go to Africa; there are charities nearer home that would have first dibs.

Bill Quango MP said...

We begged him to end aid..Begged him!
He wouldn't believe it was toxic. Brown used to get pages of editorial for his foreign spending, he said.
How can anyone be against helping the very worst off?

But that was in the boom. In the bust people want a semblance of prudence and responsibility. Aid, which used to be such an easy sell, is now seen as ineffective, wasteful, corrupt, foolish and taking away money meant for the UK.

Bin aid Dave. Bin it!
You can always dish out handouts to special projects and call in International-co-partnership investment or something.
But its toxic. All the prattlers in the media and the moral newspapers aren't going to convince us to pay more for a t/shirt so the people who made it don't get crushed.

In the boom years, they would have. And some significant numbers of people would have paid a bit more for
some sort of greenwash/globalisation/smiley planet logo.

But never in a recession.
This is something that seems to have taken the coalition an extraordinary long time to grasp.

Jan said...

Since in some ways there is more progress in some areas than we have here eg mobile phone use for money transfers it could be argued that there is very little case for aid at all. Some in the "third" world are actually leapfrogging us.

This is not to say that there are still huge amounts of poverty and deprivation. Maybe Bill Gates types are in a better position than anyone else to address problems in Africa etc.

The only aid we should be contributing towards at government level should be disaster relief and there is a case for making an international agency which has contributions both monetarily and with expertise from all with anything to offer which is mobilised immediately there is a natural disaster wherever in the world it occurs. Not sure how the UN or International Disaster Relief Committee fits this brief.

I agree Cameron's pig-headedness on the issue is puzzling.

James Higham said...

the major downside is unemployment at 23% which is both high and hard to bring down

Zumanomics.

Blue Eyes said...

Unemployment is lower than Spain. That is the answer that Cameron should give.

Going back a few years now, but I recall a stat that the GDP of Jo'burg was a full tenth of the whole of sub-Saharan Africa. Here's an idea: if the SAs are so upset why don't they suggest that the millions who live in the UK make some solidarity contribution? Thought not.

Demetrius said...

At my local doctors surgery there is now a notice advising patients that referrals to hospital must now go before a vetting committee and none are guaranteed. On top of that apparently it has now become quite difficult to get hold of an ambulance if you are not able to say exactly wny you are lying on the floor and cannot get up.

CityUnslicker said...

JH - Having done a little research I see now real disaster that Zuma has caused at a macro level, indeed perfomance since the end of Aprtheid has left a country with 300% greater GDP than before - it causes me to question the great loss of the white flight and the exaggerated claims of SA as a declining economy.

Of course, once the diamonds run out things change, but they are likley to find huge amounts of oil offshore anyway.

Diogenes Sinope said...

When you refer to a Kleptocracy to whom are you referring?

On completely unrelated subject, if you go to the Charities Commission website and pick one at random, Oxfam for instance, and look at the directors / staff remuneration you wonder how they all manage on these pay levels.

And again, if you consider how much such organisation spend on political lobbying you will likely see why "opportunites are fabricated." They all need each other.

Now back to Kleptocracy. Who was it again?

DtP said...

I always assumed it funded MI6 operations and was a general slush fund for off balance sheet bribery and stuff which would have been fine but....

Budgie said...

Scrap DfID, scrap it, for God's sake scrap it. Government aid damages your health and the recipients' health.

DtP said...

@Budgie - it's the CDC apparently. Err..hang on a mo - ask Mr Google. Here we go:

http://en.wikipedia.org/wiki/CDC_Group

Private Eye have been banging on about it for ages. DfID is just MI6. Fair play, really. Could probably do with an audit though.

DfID and the CDC and MI6 and FCO & MOD etc etc all treading the same turf.

Slightly off topic but Amnesty Internation's self mutilation has been beautiful comedy. £400k payoffs a plenty - hmm...

South Africans whinging for £18 million? That's a drug deal gone bad in any port town in the UK. Stinks a bit. International bitch slap.

Budgie said...

DtP, err no the FCO are a bit sore that DfID got a raise and they got a cut. There is no love lost between them.

assurance info said...

""""""" Indian experts from across the political spectrum welcomed the aid move. Surjit S Bhalla, a Delhi-based consultant and former World Bank economist, said the British decision was "enlightened". "I don't think it makes a huge amount of difference. The whole concept of aid is very old and not necessarily relevant for modern times. These programmes were constructed when India and emerging nations were very poor," he said.""""

Agence communication said...

well and very interesting "" The above map shows the GDP distribution in Africa in 2012. The darker the colour, the richer the country relatively. Africa is still the poorest continent by some distance so even the darker shaded countries are not exactly doing well on a global scale.

The UK's decision to end aid to South Africa looks sensible on this view. South Africa is clearly a wealthy country by African Standards and despite many claims to the contrary, the economy has not collapsed since the end of apartheid and instead has shown modest growth; the major downside is unemployment at 23% which is both high and hard to bring down. South Africa is hardly alone in the world though at struggling to provide jobs when the population growth is 1% a year.
""

Bryce Thomason said...

Religious freedoms and the "gay agenda are on a crash course in America and this is a speeding train no mere earthly can stop.