TOXIC AID

We are presented daily with horrific pictures of poverty that upset us and get us to give generously to one cause or another in the poor world. Most of the rich nations say they are 'helping' poorer nations. Yet, the reality is that our donations and official aid from governments, the European Union, the United Nations and the World Bank, are all part of the same complex geo-political game.

A game in which the rich are always the winners.

The fundamental flaw at the heart of aid is that aid is not development. Aid doesn’t address the underlying causes of the short term suffering we see on TV. The fact is, despite the billions of dollars invested in poor places by the rich world over several decades, the poorest people on the planet are now even worse off than they were before.

In my new book, TOXIC AID, I look back at more than half a century of my work as an economist across the poor world -- and see that 'aid' has been doing a great deal of harm, because it has taken away from poor people their freedom of agency. I also reflect on the tragic result (starvation) and its cause (exploitation).

Starvation is growing. It is estimated that at least 30,000 people each day die from it. Unless we do something about it, this figure will grow over the next 25 years - for the simple reason that we will need to feed another two billion people. But the productivity of the land in most poor countries will diminish over this period, mainly because the rich world is changing the planet’s climate. This dramatic combination of population growth and diminishing productivity is fatal. 

Exploitation takes many forms. For example, private companies from the rich world inappropriately sell seeds, fertilisers and fungicides to poor farmers, who become poorer as a result. Over the years, poor countries have accepted money from the World Bank and similar institutions and now they have to pay it back in foreign currency. The only way they are allowed to do this is to produce more of their primary commodities – which they are banned from processing – to sell on international markets. Several poor countries are already paying more in interest repayments to the rich world than they spend on the education and health of their own people. 

Toxic Aid:

In this I look in detail at why the aid industry has failed to banish starvation, which should be its single most important goal. Big donors come with their own ideas of what needs to be done to save the people they want to help; they know best. Small donors give to NGOs, which also think they know best. Some NGOs have become huge corporations that need to raise ever more money just to keep themselves going. They have huge budgets for their own operations - offices all over the world, fleets of 4x4 vehicles, expat levels of health cover and insurance for their staff, international travel, publicity, internal and external communications. None ever publishes exact data on what it spends directly on improving the lot of the poorest people on earth. Many NGOs have effectively become agents of their own governments and can’t therefore afford to challenge self-interested national policies. 

The aid industry has developed false metrics to describe its own success: quantity of vaccines delivered, number of children who have been visited by health workers, number of malaria bed nets donated to villagers, how many millions of fortified biscuits to toddlers have been distributed. These are not true indicators of development, the progress of which calls for long-term tracking of changes in less visible things such as attitudes, practices, loyalties, and hierarchies, as well as highly localised physical infrastructure, particularly rural roads and bridges, canals, ponds. 

Think tanks and many academics within the aid agencies and in research posts funded by the aid industry are equally guilty of directing attention away from the failure to address starvation. They use rich-country measures such as gross domestic product, which is not an indicator of the economic health of rural communities in poor countries. The future of aid is discussed in enormous conferences held in a rarefied world where decisions are primarily dictated by vested interests. No-one represents poor farmers. Global conferences of poor farmers are a bit of an oxymoron. Aid is therefore generally delivered top-down, which does not work if the goal is development which will eliminate starvation.  

But starvation can be reduced if all stakeholders in the aid and development field commit to tackling it and the smallholder farmers now queueing on its death row are given more power and more agency. It won’t be easy. We’ll need to change the narrative. Individual donors (the kind people who put their hands in their pockets because they want to solve problems) must be better informed by the NGOs they entrust with their contributions. They should demand far more transparency and much more in-depth education. 

Aid-funded development must become localised and its previous assumptions must be challenged. Issues such as security of land tenure, access to water, control over land grab by rich outsiders, the rights and role of women and the right to education (not necessarily schooling) must be addressed. Above all, everyone involved must believe in a bottom-up approach, in which the economics must be made to fit the knowledge and culture of local people -- and not the other way round.

Contact Benny in December for a copy of his book TOXIC AID.