The Dark Side of Development Aid

Great insight.

They are like a goodly apple rotten in the inside.

To answer your question - because IDA (international development assistance) is 'politics by other means'.

As for the system, try this: An Institutional Perspective on Development Aid

The statement in this article about The Hunger Project is false and misleading, and in fact was retracted with an apology by the Sunday Times. In 1985, The Hunger Project raised NO money for development aid - at that time it was strictly an education and advocacy group. After 1990, The Hunger Project did become a development organization, and its efficiency in utilizing money for development is rated very highly by watchdog agencies. I sincerely request the author to correct this error.

I would like to make a few comments, as I worked for many years in humanitarian organizations.
I take just two quotes:
1). "In Thailand the Swiss went in air-conditioned cars". I'm Swiss, I worked in Thailand. And I can tell you it is impossible to buy a car without a/c. It doesn't exists.
2). "...and spend their weekends on the beach". Sometime true. Not the weekends, but one day a week when possible. Explanation: When one expatriate works hard 12 to 14 hours a day in very difficult conditions, as I did quite often, we need to rest. Otherwise after a few weeks you are sick, and you must return home. Also, if you work with Officials, they are off during week-end. Medically, and to keep good productivity, the expatriate staff need to rest. Why at beach? If you can find mountains with snow in Thailand, give me the address.
But I understand some of your points, and it's normal to be careful with humanitarian organization. Permanent question is "What do they do with our money?".
I would like to mention here a new website of a non-profit NGO called Donationpixel.
Their goal is to collect money for different humanitarian projects around the world.
Their website offers the visibility of the donor - this could be interesting for many companies - the choice of the project and the country, and also the visibility of the work done in the field. They also give answers to different questions, like "Where goes my money?" or "what do they do with it?".
It seems to be an interesting new approach to encourage donations for vulnerable in poor countries. The URL is
http://www.donationpixel.org/
Maybe a way to make you trust in humanitarian work.
Best regards,
Robert

It seems that NGO do not transform them selves to become a development parteners, from AID givers, they seem to sustain the poverity and backwordedness. NGO specially, those from the west weaken the host govenment by providing services that is already rendered by the govenment, No time in the history of western NGO, that they did fill in the blanks, rather compute with the host government. NGO

Dear John Coonrod ,
Thank you for your feedback.
The documentary evidence against The Hunger Project is provided by the US National Charities Bureau (29-04-1986) and to my knowledge the basic accusation against the Hunger Project has not been retracted by the Bureau. Also the figures given by the bureau and quoted in the article have not been a subject matter of any controversy. Your reference is invited to page 6 of Hancock's book Lords of Poverty.

Dear Robert ,

The UN officials in Thailand made the accusation against the Swiss that they lived far better than anyone else. The point is that it is culturally insensitive to have luxurious lifestyles when the region is stricken with refugee crisis. It could be argued that caviar, air conditioning and sunbathing is essential to improve the performance and efficiency of humanitarian aid workers but to win the hearts and minds of the people a simpler lifestyle would have gone a long way in convincing that the aid is indeed humanitarian. William Shawcross in his book The quality of Mercy makes a detailed study of this issue.
However, I would agree that all aid workers should not be tarred with the same brush.It was not my intention to hurt your sentiments or feelings.

I think the problem is that the host nation does not have the necesarry regulations for the NGO to operate. Aid has always been a conspiracy. All the NGOs around the world want to dictate and be expert on what is needed in the host country. Let the poeple together with thier government decide what they want to do with the aid money. Third world countries have to say no to aid and yes to cooperation. The ordinary poeple in the west countries don't know that about 70 % of the aid package goes to administration. It is a scandal, administration should not cost more than 15 % of the aid package.

Dear Petros,
Agree with you that aid money is seldom beneficial. what the poorer countries want is terms of equal trade and not unequal trade where the commodity prices are rigged and cheap raw materials are siphoned off to the West. This also applies to developing countries supplying cheap labour.
If the interest payments of the poorer countries on account of debts to western financial institutions plus the transfers of unequal trade are totalled up an interesting fact emerges:the west takes more than it gives.

Sridhar, for thousands of years, the East was a net sink of capital, collecting far more from the rest of the world than it contributed through exports of spices, silk, etc. Capital flows reversed only recently because of industrialization, etc. The balance is shifting again, but it remains to be seen if this is a paradigm shift that will mean much or just a temporary aberration. Perhaps in fifty or a hundred years, the East will be providing economic and social aid to the declined West.

Dear Mr. Sridar,
Perhaps I was not clear. In 1985 (21 years ago!) The Hunger Project was NOT an aid agency. None of its donations were solicited or received for the purpose of aid. The fact that we gave some small grants to other organizations was not central to our program, and it was not why people donated to us. We - in fact - received the NCIB's highest approval that year, and appeared in their Wise Giving guide. There were never any "accusations" from NCIB. I am confident that if you or Mr. Hancock were examining our work today, you would be strongly in favor of it, as it strictly avoids the "dark side" that you and he write about. So - to support what you stand for - I strongly request you update or otherwise correct your article.

The penultimate paragraph is the most critical to understanding the author's viewsmiche.The key to understanding it is the sentence....."the wealthy countries have been net recipients of funds from third world and not net donors to it even when Overseas Development assistance is taken into account....."If one were to take this point further one should read Prof.Michael Hudson's brilliant book "Superimperialism" where an entire chapter(Ch.8) has been devoted to explaining the game(con-game??) of Aid.

I quote verbatim....
"what started out as a system of benevolent grants and loans to underdeveloped economies, at a real but moderate cost to the ample resources of America, has evolved into a strategy of international client patronage and dependency based on U.S. political and military control over aid recipients. Not only the incidental effect of U.S. aid but its stated purpose has been to restrict rather than enlarge the capacity for evolution of aid-dependent countries toward greater self-reliance."

"Since the 1960s a major aim of foreign aid has been to help the U.S. balance of payments, not that of aid-recipients. In a travesty of economic terminology, any loan extended by the U.S. or foreign governments is classified as "aid," ipso facto, even when the balance-of-payments effect is from aid recipients to donors. ..."

"The U.S. approach to foreign aid was appraised in terms of realpolitik as early as 1957, in the Senate's report on the concept, objectives, and evaluation of foreign assistance:

The subcommittee has conducted its study on the premise that the sole test of technical assistance is the national interest of the United States. Technical assistance is not something to be done, as a Government enterprise, for its own sake or for the sake of others. The United States Government is not a charitable institution, nor is it an appropriate outlet for the charitable spirit of the American people. ..."

"Not originally intended, and no doubt repugnant to those men who originally saw the role of the United States vis-à-vis agriculturally retarded nations as munificent (although founded upon eventual mutual benefits), the system of foreign aid now is implemented callously, coldly, and with deliberate intent to enlarge U.S. military and political influence. Benevolence has grown into hostility toward the legitimate desires of poorer peoples to develop economically, socially, independently, and according to their own norms, a hostility which all the world is now asked to share. To make matters worse, other developed nations are now asked to bear part of the cost of this U.S. drive toward hegemony...."

"Any loan to a foreign country is nominally recorded as "aid" if it is made within the context of some government program or is approved by some government agency. This produces the seemingly odd result that if a commercial bank or other private lender finances U.S. exports to Europe or Latin America, the loan is recorded as private investment, but if the U.S. Government provides the financing, or a credit guarantee to a private loan through the Export-Import Bank (Eximbank) or the Agency for International Development (AID), or if the government simply provides its offices in the transaction, it is recorded as foreign aid. Loans and grants associated with the war in Southeast Asia also were treated as foreign aid.
The United States is not alone in such euphemistic distortion. The statistical reports of Germany, France and almost all the developed nations treat as "aid" virtually all of their commercial loans and financing of exports to developing countries as long as these loans and export credits can somehow be fitted into the context of some government program. The criterion for what constitutes aid, it seems, is whether it is sponsored by the governments of developed countries, without regard for who actually pays the bills or the terms on which they are paid....."

"One therefore is tempted to question just what the term "aid" has come to mean. Etymologically, aid in its modem sense means to help, assist, afford support or relief. But in feudal law it meant a customary payment made by a vassal or tenant to his lord. There is a certain irony here, because what has principally been helped by U.S. aid programs is the U.S. balance of payments, U.S. industry and commerce, and long-range U.S. strategic goals. Over time the net flow of foreign exchange is not from the United States to aid-borrowing countries as implied in the modern connotation of the term "aid," but from the borrowers to the United States as in the feudal connotation. So-called foreign aid is, indeed, feudatory. Aid has imposed vassalage on developing countries in the form of contractual debt services which represent mortgages on their future balance-of-payments earning power, as well as heavy opportunity costs of foregoing actions designed to guide their economies towards self-sustaining growth according to their independent desires...."

The issue then set forth has become that much more clearer.So lets stop nitpicking... I don't think the issue is whether aid workers come and go in air conditioned cars and whether they spend their weekends on the beach.The author wishes to address some fundamental questions .....first of all why aid....i don't think he's specifically got an axe to grind with any particular aid organisation.

I'm sure the author had many other things to say....perhaps he hasn't said it for lack of space....like why do we have famines,wars,humanitarian crisises at all....aren't they ultimately the fallout of the same meddling by the same Western powers that we have seen over the past so many centuries.The message is clear...Its about time we in the so-called Third World said in unequivocal terms..."WE-DONT-NEED-YOUR-STUPID-HANDOUTS!!"

Anand Menon

Dear John,
The Hunger Project (THP) has been mired in controversies dating back to 1978 when Mother Jones magazine published a critical article reporting the connections between Erhard, est. and THP. Reporter Suzanne Gordon raised issues such as how the organization's funding was handled, and that office space or telephones for THP were often housed at est centers.

In 1979 The Christian Century magazine reported detailed information from a 1977 Hunger Project financial statement. The magazine stated that THP "disbursed approximately $800,000; but apparently not a cent of that amount was spent either on providing food for the hungry or on developing reliable food sources for the poor." Instead, Christian Century reported "15%" was spent on "administration," with the rest expended for ''communications,'' such as "brochures, newspapers, ads and conferences 'Presentations' alone cost about $500,000."

On May 30, 1981 the national board of directors of Oxfam, Canada passed a resolution, which stated they would not endorse any activities or programs sponsored by THP, nor would they accept funds from the project.

Seeds Magazine published an article "It Doesn't Add Up" (December 1984), which raised serious questions regarding THP's use of measurements and statistics to prove its thesis.

In an article titled "Hunger Project Feeds Itself" published by the McGill Daily (February 13, 1985) it was reported that relief organizations, such as CUSA, Oxfam International and the Peace Corps, had disassociated themselves from THP.

The Canadian newspapers Ottawa Citizen and Toronto Star pointed out that a THP program was barred from Toronto, Ottawa and Carleton schools.


According to Cult News.com 'its website THP's goals are to identify "the conditions that give rise to the persistence of hunger." And the organization has "strategies to...transform these conditions," which supposedly "restore and unleash the human spirit." But doesn't this sound like "empty talk"? THP doesn't mention the most obvious means of stopping hunger, which is providing food to the hungry.'

Your critics also allege that legal tactics are employed by your organization to stifle adverse comment about the working of your organization, which receives donation from the public without providing specific instances of retraction or apology by the authorities cited above.

Are we then to conclude John that there is indeed a dark side to humanitarian aid?





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clarification on Hunger Project-
Critics like Hancock have pointed out that THP is long on hype and short on action as the money collected by it rarely goes towards feeding the hungry.
Though THP in 1985 was not an aid agency, it was formed with the intention of eradicating hunger and donations were collected for this purpose. Critics have complained that when this is so the donors expected that a great portion of the contributions should go towards feeding the poor and not on motivational seminars and administration expenses.
The piece The Dark side of development aid written by me relates to the early years of THP with the information culled from The Lords of Poverty by Hancock who in turn relied on National Charities Information Bureau, New York,(29-04-1986). Even today THP has invited public criticism for adopting flawed strategy in combating hunger. Mr. Coonrod has not provided any information or material where Mr. Hancock has retracted his comments on THP. Recently, THP has been accused of stifling freedom of expression on the net by adopting strong-arm legal tactics.

The topic of the book is very engaging. thanks for a great blog on this. I had a couple of observations:

1. All aid agencies put out notices asking people to donate money as opposed to clothing or specific kinds of charities. The reason was it is easy to redirect money to obtain whatever is needed at the site. This seems to directly lead to the first few points of your blog. The charities end up having a lot of cash. And if they did have all charities in kind, then it may be hard to hide like a stack of cash.

2. What alternate forms of charitis have worked. Clearly Grameen bank (though it is not technically a charity) works very well. Perhaps other decentralised organizations that have local autonomy in both collecting charities and disbursement would be efficient and transparent, and easy to hold accountable. for instance Association for India's Development OR Asha for Education.

3. It seems like donating to local community charities is much better utilised than to international charities.