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Last updated on March 6th, 2018 at 12:30 am
Don D’Cruz points out the disadvantages of the former, and the benefits of the latter:
Setting aside the emergency relief being rushed to tsunami survivors, which is vital and absolutely necessary, foreign aid has, in general, not been very effective. Indeed, if the aid industry’s effectiveness was judged by its success in poverty alleviation, it would have been shut down years ago.
For example, according to World Bank figures, despite spending $US100 billion in aid in sub-Saharan Africa between 1970 and 1999, about 17 countries experienced a decline in real per capita gross national product.
There is a disconnect between how effective the public thinks its aid contributions are and the reality of aid. Western governments, which to a degree evaluate their own aid funding, are aware of its frequent failures. This explains, in large measure, the donor fatigue felt by Western governments. They are not just aware of aid’s ineffectiveness; they are also aware of how aid, even emergency relief, when channelled into conflict zones, serves to feed armed conflict and undermine the ability of local economies to recover …
The true insignificance of aid is revealed by the fact that trade contributes almost $US1.7 trillion to the developing world, making free trade an imperative—hence the emergence of the slogan “trade, not aid”.