Development Cooperation
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Helpless Help

Despite the best of intentions, development aid doesn' accomplish much, says Kiflemariam Gebre-wold. Without a thorough overhaul of the foreign aid machinery of assistance, the world will not reach the Millennium Development Goals

35 years ago, in 1970, the rich world promised in UN Resolution 2626 to raise the level of its development
assistance to 0.7 percent of its GDP.

Twenty five years later, 21 countries of the EU have still not reached this goal; even Germany, with its present 0.28 percent, is lagging way behind.

At the World Economic Forum in Davos in 2003, German Chancellor Gerhard Schröder announced that Germany would pay 0.7 percent in the near term. But given the present trends, this will first be the case in 2087.

Five years ago, UN General Secretary Kofi Annan commissioned a "Millennium Project" group of experts to analyse how and whether the UN's Millennium Development Goals (MDGs) are to be reached. The project secretariat concluded that the public assistance funds set aside for the project would have to be doubled from 68 to 135 billion US dollars.

Lack of concepts for fighting poverty

Given the power relations in the world, it seems unrealistic to expect that this requirement will be met. In its most recent report from January 2005 "Investing in Development", a few practical, readily implemented goals are put forward.

The proposed measures – the provision of free meals at schools, generators for hospitals and the distribution of mosquito nets – read like the order list of a single mission and do not seem to be aimed at reducing poverty world wide.

A further study "EU Heroes and Villains", published in February 2005 by Oxfam, likewise suggests that we're a long way from the achievement of the Millennium Goals. The study concludes that many countries in the European Union invest a very low percentage in the least developed countries: 24 percent in Finland, 15 percent in Austria, a mere 6 percent in Greece.

EU countries fail to fulfil their requirements

These countries are the most in need of financial assistance if the Millennium Goals are to be reached. Furthermore it was resolved at the World Summit for Social Development in 1995 that both the donor and developing countries should spend 20 percent on social programs. Other than the Netherlands, with roughly 19 percent, no country of the European Union has fulfilled this requirement. Germany, with 7 percent, is in the lowest category.

A further point in the financial relations between donor and recipient countries is that, on average, roughly 38 percent of development assistance is tied. This means that the receiving country is obliged to accept goods and services from the donor country, sometimes at higher prices.

In fact, the countries of the European Union agreed in 2001 to discontinue this practice.

There is also little positive to report in the area of bilateral debt relief. In 2002, the European Union made a resolution to enable the most debt-ridden countries to use the capital that they have for investment rather than the payment of interest on debts.

The creditors are the judges of their own case

Many European countries have suggested waiving debts or have in fact implemented tax relief. But there is a huge gap between resolutions and praxis. In Germany for example, the net volume of debt to be relieved totals some 6 billion Euros; only 2 billion have been relieved so far.

International debt management is a construction riddled with injustice and a lack of transparency. At the moment, the creditors are the judges of their own case. The indebted countries of two thirds of the world are being granted neither a fair court of arbitration nor fair bankruptcy processes. In civilised countries, every last business has the right to this.

The political development scene is occupied by several competing actors worldwide. A fact that causes massive deficits according to the Oxfam study of February 2005 "Millstone or Milestone":

Roughly eighty 'official' development agencies manage roughly 35 thousand transactions a year generating an uncontrollable sphere of activity; the conditions that are imposed with development aid force recipients to accept blue print models; the liberalisation of trade and privatisation in social areas result in a further marginalisation of the poorest of the poor.

Bween assistance promises and actual aid lies a gap of 26 percent in the case of project assistance, and payments are often made 6 months later than promised; favoured countries like Nicaragua receive some 178 US dollars per capita in development aid while neglected countries like Niger only 22 US dollars per capita.

The lack of transparency

The donor countries behave like a fraternity and do not publicize information on intended or actual spending, the impact of their work or the process of contracting.

Three quarters of the development agencies, for example, did not inform the Zambian government about funds to be granted nor about the funds that were about to be drained – mandatory information for government planning.

The behaviour and policies of the donor countries have devastating consequences for the South. More than 100 million US dollars were not paid to Ghana, for example, because it refused to privatise its communal water system, as the financer insisted. Cambodia presented a plan for poverty reduction as a pre-requisite for debt relief. Japan noted a lack of infrastructural projects and pressured Cambodia to change the plan accordingly.

A mockery is being made of the much avowed talk of the right to co-determination.

The invasion of the investors – who come to ensure that their conditions are being implemented – meant that in the year 2003, for instance, Vietnam had to receive 400 delegations from 20 development agencies. The World Bank bombarded Senegal with 50 official project visits: one delegation a week.

Officials of developing countries as servants

Well educated bureaucrats in the respective countries say again and again, "We spend our time writing thousands of pages of reports, hundreds of receipts for the financers, moulding projects so they meet their requirements." They hardly get around to their actual work: the implementation of development plans. They are degraded to the status of servant of the donor.

The countries united under the Organisation for Economic Co-operative Development (OECD) have made ‚efficiency' their mantra since 2003. Until today, no real change has been effected.

The assistance machinery has become a Byzantine colossus, which administers itself. It refuses to make its own work and procedures transparent. It refuses to be assessed independently by institutions of the civil society. It demands from the South precisely that which it does not do itself.

Without a thorough overhaul of the foreign aid machinery of assistance, the world will not reach the Millennium Development Goals.

Kiflemariam Gebre-wold

© Kiflemariam Gebre-wold 2005

This article was previously published in Zeitschrift für KulturAustausch, the Institute for Foreign Relations’ magazine for cultural exchange.

Kiflemariam Gebre-wold, born in Ethiopia, is an independent consultant in development co-operation work and lives in Freiburg.

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