Monday, June 26, 2006



Failing to deliver

Last year, the worldwide Make Poverty History campaign put the leaders of the rich G8 nations on the spot, and forced them to pledge to do more to help poorer nations. The final communique, while disappointing in many ways, at least promised something: an increase in aid spending (though far lower than claimed), better access to HIV drugs, and debt relief for the poorest nations, So, a year on, has the west lived up to those promises?

In a word, no. According to a report [PDF] from Action Aid, the rich countries have failed to deliver on their promises - betraying both their own citizens, and the world's poor. In Germany and the UK, foreign aid spending has actually fallen, once debt relief is excluded. A major fund to provide universal access to HIV treatments is in danger of failing, because donors simply haven't put their money where their mouth is. Economic "conditionalities" such as open markets and asset sales are still being attached to debt relief. And there has been absolutely no progress on the real solution to third-world poverty: opening first-world markets and ending first-world farm subsidies.

Basically, our governments have lied to us, spun us a line of bullshit in the hope that we'd go away, and then continued business as usual. They cannot be allowed to get away with this.

Meanwhile, Tony Blair is making excuses in The Independent, saying that "We could never make poverty history overnight". But the issue here isn't the failure to solve the problem overnight; it's the failure of his government and others to do what they had agreed to. But rather than admit that, it seems that Blair would rather tilt at strawmen...

18 comments:

Any campaign about poverty that watered itself down to the extent that Tony Blair could wear one of those stupid fucking armbands was never actually going to DO anything about poverty.

Posted by Asher : 6/26/2006 03:31:00 PM

Sure. But then its even worse when Blair fails to keep even the watered-down promises that he did make.

Posted by Idiot/Savant : 6/26/2006 03:36:00 PM

Economic conditionalities SHOULD be applied to aid - the problem is when it is the wrong conditions.
Giving money to a country with stupid policies is a bad strategy when there are other countries with better policies you could be donating to.
That doesn't mean asset sales or open markets are the right conditionalities of course.

"Foreign aid spending has actually fallen, once debt relief is excluded."

Not that it is fair to exclude debt relief - unless you don’t believe in debt relief...

Posted by Genius : 6/26/2006 06:16:00 PM

Hi Genius,

I'm inclined to agree - up to a point. There's no point giving money to a dictator that then ferrits it of to his swiss bank account; nor to a government who spends the money on invading their neighbours. However, conditionalities to prevent this aren't the sort that most campaigners were opposed to. It was/is the hardline neo-liberal economic conditionalities that people have/had a problem with. Conditionalities which were 'marketed' under the guise of good policy advice. Part of the trouble here is that, when it comes to development, there's not a heap of concensus about what good policies are. The other part is that neo-liberalism, as much as anything else, appeared to be driven by what was good for Forex speculators, as opposed to the poor.

Posted by Terence : 6/26/2006 07:57:00 PM

Terence: its worse than that; in the third world, neo-liberalism kills people. Sticking uder charges on things like basic health, water, and sanitation mean that poor people don't get these vital services - and the result has been epidemics, and hundreds of thousands of avoidable deaths a year - all because some guy in a suit in Washington is on an ideological kick.

And then of course there's using conditionalities to maintain unfair trade relationships - poor countries must open their markets and privatise services to receive aid, while the rich do their utmost to prevent the poor from trading on an equal footing.

Stopping corruption and ensuring that money is actually spent on the purpose it was given for is one thing, but the conditions attached go well beyond this, and are instead used as a means of entrenching existing power relationships at the cost of third-world lives. This simply has to stop.

Posted by Idiot/Savant : 6/26/2006 11:52:00 PM

Hi I/S,

I agree entirely. I might add though that, in the World Bank, at least, there appears to be some recognition of this. See for example:
http://tinyurl.com/kpoft

Posted by Terence : 6/27/2006 09:58:00 AM

Agree with Genius

Posted by Anonymous : 6/27/2006 11:49:00 AM

"Sticking user charges on things like basic health, water, and sanitation mean that poor people don't get these vital services - "

But keeping the services public and free also means that poor people don't get these vital services.

How many third world slums do you think have good public water supplies?

The problem that privatisation was supposed to address is that third world countries both lack basic infrastructure, and lack the money to build it. The idea was to fill the gap by encouraging private investment, on the theory that if a private firm builds and expands a water supply and then charges for it that's better than not having it at all.

There were two obvious flaws.

The first is that naive privatisation of natural monopolies is a just bad idea. Companies showed up interested in making a buck out of existing infrastructure instead of interested in public-spiritedly making new infrastructure. Gosh, who'da thunk it? Hardline neo-liberals were to in awe of the "free market" to consider basic ideas like "natural monopolies are bad".

A better economic approach was to keep control of existing infrastructure and instead grant companies the right to create new private infrastructure.

But the second problem is that even when this worked, it resulted in riots and international outrage. The _best_ case is that a big multinational builds a water supply into the slum or rural area that previously had no water supply - and then charges a premium for it. After that you get outrage: this family can't even afford water from the tap! People are dying because big multinational is charging so much for water! Piping expensive water that only some can afford into the slums is politically less acceptable than simply no having _no_ water supply at all in the slums.

What I'm saying is that market-based solutions can actually do good work, IF handled with care. The hardline neo-liberal extremists were wrong: but equally wrong is the knee-jerk response of claiming that privatisely held essential infrastructure (user charges and all) is always evil.

Posted by Icehawk : 6/27/2006 01:03:00 PM

icehawk, the moral being that aid and development are complex and difficult to do well.

Idiot, any evidence for "our governments have lied to us"? Maybe it's a case of well meaning people not meeeting targets because it is complex and difficult. If your objective is to tweak politicians' consciences then it's mostly likely counter-productive to abuse people in this way.

Posted by Neil Morrison : 6/27/2006 03:07:00 PM

Neil: double-counting debt relief as part of increased aid for one. Making promises and then doing absolutely nothing to implement them for two. Culpability varies by government (the UK has met many of its commitments, but still falls afoul of point one), but generally speaking, the inescapable conclusion is that they simply fed us some bullshit in the hope we'd shut up.

You may be willing to accept that from governments. I am not.

Posted by Idiot/Savant : 6/27/2006 03:33:00 PM

Icehawk,

Given issues to do with natural monopoly and externalities, and given that markets - when they work - only guarantee efficency not the right to service, I'd say that the only reason to privately provide core municpal services is if a private company can afford to invest money that a municipality doesn't have. There's a pretty clear alternative to this - aid money used to pay for government provision. Sure you may still face problems with corruption and mismanagment, but a glance at the third world would suggest that private companies are just as plagued with these problems as government. And, if the *right* conditionalities are used, donors ought to be able to minimise the risk of corruption (granted this is easier in theory than in practice).

In my opinion, provision of basic public health, education and sanitory services ought to be the key function of ODA giving. Think of it as a global social contract. This is better, in my opinion, than the current rationale for much ODA giving - generating growth.

Posted by Terence : 6/27/2006 04:08:00 PM

on the subject of basic education - apologies for all the typos above

Posted by Terence : 6/27/2006 04:10:00 PM

the real solution to third-world poverty: opening first-world markets and ending first-world farm subsidies.

Glad to see i/s et al. are on board with at least half of the logic of comparative advantage.... The best chance for any of the important stuff you mention was the Seattle WTO round in 1999. I was in Seattle at the time and saw representatives from Ghana in particular out in the streets weeping, begging the protestors to go home, imploring them that this was the third world's one chance to get the US and EU to open their markets etc.. It was frankly disgusting to see all these bratty incoherent lefty kids from some of the most benign and privileged places on earth (San Fran, Vancouver, Seattle, Portland) flexing their muscles and condemn 100,000's of Africans to utterly needless death and poverty. Rod Donald was the poster-child in NZ for this left-wing jackassedness.... but being Green means never saying your sorry. Don't know what i/s's stand has been on all this over the years, but the dishing it out to neo-liberalism in this discussion here makes me suspicious: overall this is at least as much a grass-roots lefty debacle as far as I can see.

Beyond that I agree with various things people have said above (esp. Genius, Neil M., Terence, and Icehawk). Market solutions are the way to go but it's not clear how that stuff can work without most and perhaps all of the characteristically western recipe for success: rule of law, independent judiciary, property rights, de-militarization of civil society, transparent and non-kleptocratic, non-nepotistic representative govt and so on (all of which may in turn depend strongly on relatively benign combinations of natural and cultural environmental conditions). And nobody knows how to give countries all that stuff short of full-scale colonization/re-colonization, which people are rightly squeamish about. Encouraging/supporting various sorts of liberal non-democratic half-way houses is fraught with risk, and illiberal democracies are worse.

Paul Theroux's NY Times op-ed last year about this was enlightening.

Surely too it's just wrong to heap blame on democratic governments for not delivering on promises. If the issue is important to the people - which they could show by clearly identifying how much more of their own healthcare, pension and education they're prepared to pay for, what sacrifices they'd be prepared to make etc. to make an attempt on 'making poverty history' possible (don't think that flooding the world with additional cheap agricultural commodities will do NZ many favors- what are you prepared to give up? at least while we adjust to not being so agriculturally dependent -good luck with that!) - then the govt will get the message. Perhaps the whining about promise-breaking now is part of that. It's hard to know. We'll just have to see.

In any case, my own sense is that the 1999 WTO round may have been it for serious action on trade (thanks for screwing that up incoherent grass-roots lefty brats).... Societies don't seem to be able to take on too many grand challenge problems (that might be in various senses partially quixotic) at once, and right now and for the conceivable future that means (i) climate change and (ii) terror/weapon proliferation/immigration/demographic change. Maybe trade/poverty stuff can slot in under (ii), but precisely because it's so hard to do and have anything stick (for all the reasons discussed above), I doubt it.

Posted by stephen glaister : 6/28/2006 01:08:00 AM

"There's a pretty clear alternative to this - aid money used to pay for government provision. "

Terence,

You are giving the standard critique of having a nasty, impresonal multinational provide expensive infrastructure that supplies only those who can afford it.

I agree. I'd like the first world to provide enough aid money for that. And I'd like world peace. And a pony, too.

Saying "aid should do this" is *not* a valid criticism of getting private companies in when the aid is lacking.





Stephen Glaister,

We only partly agree. In particular I don't think "market solutions are the way to go". I think market solutions are a useful way to go in some circumstances. I'm as suspicious of knee-jerk support for privatisation and markets as I am of knee-jerk opposition to it.

Posted by Icehawk : 6/28/2006 11:08:00 AM

Icehawk,

I take your point, however, in the case of ODA, I think it *could* do this. The price of global provision of sanitation is not huge (approx B$50 I think). Moreover, in recent years much ODA has been used for almost the opposite purpose - leveraging countries into privatisation. A good example of this is education where the WB often required countries to charge for primary education provision. I'm sure you can guess why this was a *very bad idea*. Donor agencies have now come to realise this and primary education is, in many cases being provided free again. And not a pony in sight.

SG,

The Seattle WTO talks were not the only ones which broke down (problems also occured in such protestor unfriendly locations as Doha). Nor it wasn't the protestors which caused them to do so (despite what some of the protestors themsleves appear to believe). The reason why recent rounds of trade talks have failed is because the developing world has finally started to stand up for itself. There are many reasons for this including - one of which is plausably the spotlight that is now focused on the once secretive world of trade negotiations. The protestors themselves can take some credit for this.

Posted by Terence : 6/28/2006 03:24:00 PM

arrrgghhhh typos arrgghhhhhh

Posted by Terence : 6/28/2006 03:26:00 PM

icehawk: yes, we do only partly agree... but I'd describe myself as a skeptic about market solutions per se too since (as I described above) it seems like you need a lot of other stuff in place for markets (or even investment) to do much good.

terrence: you're certainly right that post-Seattle trade rounds have got nowhere too. My reading of that, however, is that there are all sorts of entrenched forces and interests keeping first world agricultural markets closed to the third world and those jolly anti-globalization activists post-seattle have alibi-ed those forces and interests indefinitely. The pro-trade pro-globalization Bono-fied left for this reason has its work cut out for it now. As well as because (i) the world's agenda is pretty full these days (the sunny '90's are long gone) *and* (ii) because like righties whining for tax-cuts without explaining which services they'll cut, lefties whining for action on poverty etc. without saying up front what they're prepared to give up, look like fundamentally unserious big babies. (The entrenched forces and interests see right through them...). Not that being fundamentally unserious big babies has stopped righties getting and holding power in the US! :)

Posted by stephen glaister : 6/28/2006 05:57:00 PM

Sh't I cant believe anyone actually thought anything would happen.
It hasnt reached crisis point yet, that is the only time
to expect any action from G8ers.
And what crisis would prompt action only 1000,000,000 hungry africans marching on Europe.
Cant see that happening can you so Tony B can retire and collect a pension and dream of his life after death chatting with jesus and rupert murdoch.

Posted by Anonymous : 7/02/2006 03:52:00 PM