Wealthy nations value military might over what’s right

Wealthy nations continue to renege on their promise to Overseas Development Aid while spending massive multiples of this on war. Since 1970, only five ‘wealthy’ countries have honoured their ODA commitments. By Justin Frewen

In his 2003 book, After the Terror, the philosopher Ted Honderich wrote
about the need to inculcate a ‘morality of humanity, fellow-feeling, or
generosity’ into everyday thought, and more importantly, policy. He

"What we need to do morally is to try to save people from bad lives – this is the stuff of our moral obligations and rights... What we need to try to do, more specifically, is to reduce the number of bad lives by certain policies. These have to do not only with those who have or will have bad lives, the badly-off, as we can call them, but also the remainder who have good lives, the better-off.”

In this mini-series on we have looked at the evils of poverty, hunger and inequality together with the large-scale development initiative to tackle these concerns. In this final piece, the absence of any priority to the provision of Overseas Development Assistance (ODA) is laid bare. Also discussed are debt relief, the argument that ODA is not the best means to tackle poverty, hunger and inequality, and finally our moral responsibility to assist and what might be needed to seriously tackle these issues.

Given the scale of these issues this final piece will be in four parts, the first of which shall deal with the issue of ODA; the second the issue of whether ODA is the best means to tackle poverty, hunger and inequality; the third debt and debt relief; and finally the question of our moral responsibility and the shape an overall approach to tackling these evils might entail. 

Official Development Assistance

In 1970, an international aid target of 0.7% of Gross National Product (GNP) was established by the UN General Assembly to be adhered to by the 22 members of the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD). The deadline set for the meeting of this objective was the mid-1970s. However, forty years on, this target is nowhere near being met. Wealthy nations provided US$2.74 trillion in ODA between 1970 and 2008, a shortfall of $3.66 trillion with respect to the 0.7% pledge.

For many, the figure of US$2.74 trillion in aid might appear a truly massive transfer in resources. However, apart from the fact that it was spread out over 38 years and falls far short of the 0.7% target, perhaps the best way of putting it in context is by comparing it with the fund allocated to military spending.

The United Nations is the most important international agency in the area of development and humanitarian assistance. It spends around US$30 billion a year. This works out at around US$4 for every person in the world. However a constant issue for the UN is the arrears in contributions from member states. On 31 October 2009, over US$829 million had not been paid by members. The worst offender in this respect was the US, responsible for 93% of the shortfall. 

At the same time, 2008 global military expenditure has been estimated at US$1.464 trillion, equivalent to 2.4% of the total world gross domestic product (GDP), equivalent to $217 for every one of the world’s inhabitants - over 50 times what the UN receives for all its programs and funds.

Relief aid pledged to the 2004 tsunami and, for example, the finance made available for the war in Iraq also lays bare the priorities of the major donor countries. George Monbiot in an article in the Guardian highlighted this disparity when he noted that the US and UK respectively paid US$350 million and US$50 to aid victims of the tsunami; this paled into insignificance beside the US$148 billion already expended by the US on the Iraq war and the $11.5bn by the UK. Indeed, the total ODA budget for the UK was only 50% of the monies it had spent on Iraq whereas in the case of the US, ODA amounted to only 10% of the military spend on Iraq.

However, the problems with ODA are not just limited to the relative paucity of the funds allocated. A significant proportion of ODA is in fact ‘phantom aid’ - assistance that has been squandered, misdirected or recycled within the wealthier donor countries themselves. An estimated 25% of donor aid is used to engage consultants, undertake research and provide training. This flies in the face of an ever increasing body of evidence, which indicates that technical assistance (TA) of this kind is frequently overpriced as well as being comparatively unsuccessful. In certain instances, TA support is retrograde, impacting negatively on the capacity of ‘developing’ countries. Furthermore, it has been argued that many donor countries have availed of TA to ensure that the policies and programmes being implemented by countries in the South are in fact beneficial to their own interests. 

Other concerns include:

Double Counting
Assistance that has been pledged is then allocated to a particular project, programme or in response to a crisis and is announced as if a new provision

Unfilled Pledges of Aid
This is a frequent occurrence and occurred following the 2004 tsunami and the 2004 heavy rains and floods that struck Haiti in 2004. In the case of the earthquake that hit Bam in Iraq in December 2003, resulting in 31,000 fatalities, only US$17 million of the US$1 billion in funds pledged had been delivered by January 2005. 

Tied Aid
This relates to aid that comes with the condition, which obliges the recipient state to purchase goods and services from the donor country. A 2004 UN study on aid to Africa estimated that this strings-attached aid slashed the actual value of development assistance by between 25 to 40%.

Food Aid
Food aid often harms the agricultural industry in the recipient country. When food aid is provided at below market prices it effectively undercuts local farmers depriving them of an income. Unable to compete, farmers are often forced to cease productive farming and make labourers redundant. This can worsen rural poverty leading to migration to more urban areas in search of employment. People often end up living in absolute poverty in overcrowded, shanty towns in pitiful conditions. Indeed, this is one of the factors that led to the loss of life in Haiti following the recent earthquake being so high. 

Of course, many argue that the real obstacle to effective ODA arises from deeply corrupt regimes and administrations in the South. Corruption exists, but the causes and effects of corruption are far more complex than commonly acknowledged.

It is difficult to gauge how poverty, hunger and inequality are aggravated through corruption in comparison with, for example, the impact of highly inequitable global trading system (whether through the World Trade Organisation (WTO), the Trade Related Intellectual Property System (TRIPS) or Free Trade Agreements (FTA)). For the most part, the legal status of these policies or agreements renders them immune from criticism as being ‘corrupt’ in spite of the unfair and inequitable effect they have on the South, for which they are by and large negative, and the North, for which they are generally beneficial.

Furthermore, there is a push and pull side to corruption. For every individual accepting a bribe, there is at least one other offering it. It has been common practice for companies from the North to offer bribes – especially in the arms trade and construction – while at the same time decrying their need to do so and lamenting that should they fail to do so they will lose business.

Finally, the emphasis on corruption in the South has had two other benefits for donor states. It has allowed them divert attention from their utter failure to reach the 0.7% aid target they committed to in 1970 – bar a few honourable exceptions (Denmark, Luxembourg, Netherlands, Norway, and Sweden).

Although the total share of donor GNP was 0.51% in 1960, it has tended to decline as a percentage decade on decade since. By 1970, it had fallen to 0.33% with a slight rise to 0.35% in 1980. By 1990, it was 0.34%, plummeting to a calamitously low 0.23% by 2002, ironically the same year that donor states recommitted to the 0.7% target in the Monterrey Consensus. Although, by 2008, average ODA had risen slightly to 0.3% of GNP or GNI as it is now known, this is still far short of the 0.7% pledged 40 years ago. Given the global economic recession, it is most likely that the overall 0.7% target is not in danger of being reached anytime soon.

Emphasising corruption also gives donor states ever more control over the assistance they provide and to place conditions on its usage. They insist on overseeing its exact application in the field as well as placing conditions on the recipient state as to the ‘reforms’ they have to undertake in order to receive the required assistance.

Finally, another major issue has been that of debt relief. It should be noted that many states have given debt relief and then double counted this as the provision of aid. However, of course, the problem of debt is a far wider and more considerable one, which we will consider in part 3 of this final piece.