Giving and taking
We see the ultimate conundrum of the development-cum-aid business in Nepal today
FROM ISSUE #226 (17 DEC 2004 - 23 DEC 2004) | TABLE OF CONTENTS
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Foreign aid as we know it began with the reconstruction of Europe after World War Two. Wise men in Washington and there were a few in those days, foresaw that a prosperous Europe rebuilt with US funds and with a kinder, gentler capitalism to keep it developing, would probably not go to war again. So they poured in the cash and aid was born.
The cold war kept alive the notion of spending rich country money in poor countries. Keeping communism at bay wasn't cheap. And a lot of that money was supposed to help the poor, well, if it had to be spent on the home front, on local companies to build the roads, bridges and airports that would bring development, then so be it.
In the 60s, we discovered the purity of compassion and a lot of people who couldn't make their own economies substantially more equitable went to work for global development. In pliant poor countries, they found a laboratory in which to experiment with impunity and without restriction.
Gradually, aid became a profession and developed a body of scholarship and research that inserted it neatly in the economic mainstream, at least as far as the theory goes.
Thus we had the Washington Consensus of the 1990s where all you had to do was open your economy to global business and things would pick up. What you think of this experiment depends on what data you believe and that's driven by where you stand on the political questions. It worked, say the free marketeers. A catastrophic failure, according to left-leaning types and we journalists tend to come down the middle. Some things did, some things didn't, is our take.
Whether or not we think market economic changes helped developing countries, we do know one thing for sure. There has been steady growth in the power and influence of the IMF, the World Bank and powerful bilateral aid dispensers like USAID and DfID. This is definitely a sector that's done well over the past 10 years or so. Many many new jobs have been created, consultancies have expanded, libraries have been filled with reports and papers. Business has been good.
The new aid profession isn't without its critics and many of them are fierce, focused and committed. Set aside cranky columnists and look at both serious investigative types and authors from inside the development paradigm and you'll find another growth industry. Consider the canon, if you will. Joseph Stiglitz, Graham Hancock (alas now sadly in search of mythical sunken continents rather than World Bank perfidy), Greg Palast, David Sogge, whose 2002 book Give and Take, What's the matter with foreign aid? should be required reading for anyone thinking of entering this poisoned chalice of a sector.
And we see in Nepal today the ultimate conundrum of the development-cum-aid business. Dysfunction defies it. Now the aid types try to help battered countries develop their social, political and economic institutions rather than bridges or airports. They encourage and fund studies into how a new law will help the poor or how excluding women or traditionally underprivileged communities has immense social costs. They take a high moral tone and expect their beneficiaries to learn from that.
So what, to date, has Nepal gained from any of this? There is a Maoist rebellion against a still powerful feudal elite, rumblings of a royal coup to fix democracy by ending it, economic hemorrhaging on a grand scale, a fledgling civil society that can't seem to grow up and environmental catastrophe at every hand. Spot the benefit to this country from any aid activity at all in any of that and win a prize.
A one way ticket home.