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The Missionary Position Foreign aid is often salve for the conscience,helping the donor rather than recipient
Ramesh Thakur

When India selected 126 French Rafale fighter aircraft over the UKmanufactured Typhoon involving a consortium of European countries,a 13 billion deal,some British politicians and commentators demanded that aid to ungrateful India,a fast-rising economic power,be stopped.The press dredged up finance minister Pranab Mukherjees comment that the 280 million annual British aid is peanuts.Indias opposition parties called for UK aid to be rejected. Britains aid programme will continue but target the three poorest states,not New Delhi,and the private sector.The David Cameron government has expended too much political capital to justify aid policy,exempted from savage spending cuts,to the electorate to risk the embarrassment of ending it. No decision by the Manmohan Singh government is final until actually implemented.Major defence platform acquisition decisions are made on a balance of several factors : technical specifications (payload,range,manoeuvrability),costs (initial,maintenance and total life-cycle ),technology transfers,joint production,geopolitical partnerships,etc.In ongoing discussions,Britain would be better off delinking the Typhoon pitch from aid,improving the price and arguing for the international political advantages of having several European partners rather than just France.That said,it might well be in both countries interest to terminate the aid programme quietly in due course. The ambivalence on aid is well captured in three books.In The End of Poverty,Jeffrey Sachs argues that its goal is to help the worlds one

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Poverty,Jeffrey Sachs argues that its goal is to help the worlds one billion poorest people,caught in a poverty trap,reach the first rung on the ladder of economic development.But,in Dead Aid,Dambisa Moyo supports a tough-love policy that would stop the tide of wellintentioned money which promotes corruption in government and dependence in citizens.In The White Man's Burden,William Easterly concurs : successful poverty reduction programmes are best achieved through indigenous,ground-level planning,not policydistorting foreign aid that can sometimes worsen the plight of poor economies. In theory,development aid fills the gap in capital needed for investment in growth-promoting activity and infrastructure.In reality,aid is often the transfer of money from middle-class taxpayers in rich countries to the wealthy elite in poor countries. For decades,western aid crowded out private sector investments and enabled despots to continue with poverty-perpetuating policies.Statistical graphs often show an inverse correlation between aid and growth.Easterly shows that over $2 billion in foreign aid to improve Tanzanias roads failed in that goal but did bloat its bureaucracy,with the government having to produce 2,400 reports for the 1,000 donor missions. Foreign aid often reflects the geopolitical and commercial interests of donors (and values last October,Britain threatened to cut aid to countries that did not repeal laws banning homosexuality),not recipients.And it gives cover to donor countries for subsidies,tariffs,quotas and labour market restrictions that impose significant harm on developing countries. Even emergency humanitarian and disaster relief operations,mostly above questioning,can have perverse consequences.For example,food delivery,arriving weeks and months after the worst of a famine,depresses food price to such an extent that local farmers fail to make any profit for their produce and do not sow crops for the following year. Remittances are second only to foreign direct investment as a source of external finance to developing countries.Indians send home $30 billion.Freeing up the global labour market would be far more beneficial to developing countries than so-called development aid.So would an end to such incidents as the January 2009 seizure of a shipment of generic medicines from India to Brazil by Dutch authorities to protect European big pharma. Developed countries dole out five times as much in agricultural and manufacturing subsidies to their own farmers and industries as foreign aid.Up to 40% of aid is tied to overpriced goods and services from the donor country and the same proportion is eaten up by consultants.Thus the poor stay poor and earn the ire and contempt of politicians and citizens alike in the rich countries,while uncompetitive but well-connected businesses and middlemen consultants laugh all the way to the bank. Instead of aid,we should advocate foreign investment,a deregulated international labour market,end to trade-distorting production and export subsidies,and lowered barriers to imports in international affairs;new bond markets,microfinancing,infrastructure and revised property laws in domestic governance;and confiscation of rulers wealth in western safe havens. Having begun with India,let me end with Pakistan.Christine Fair argues that massive infusion of (US) foreign aid has allowed Pakistan to avoid having to choose between guns and butter choices that define the democratic process.Cricketer-turnedpolitician Imran Khan agrees: US aid has been a curse... All (aid) does is stop us from making the reforms that are needed.The West trains their military

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making the reforms that are needed.The West trains their military who train and shelter the militants who kill the Wests soldiers.Go figure. Aid corrupts: much of the money disappears into the pockets of the well-connected.Aid softens the need for a government to forge a bond with its citizens by raising revenue and redistributing those funds as services.Such a social contract is fundamental to any countrys emergence as a robust democracy that provides for its people.Development depends less on foreign aid and more on reforming the tax code and collecting what is owed from citizens,politicians,businessmen and feudal landlords alike. The writer is professor of international relations,Australian National University.

Aid hardly throws the poor a lifeline

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