Don't Just Throw Money At The World's Poor |
High-profile proposals to boost aid seem like political one-upmanship
by Jeffrey E. Garten, March 7, 2005
In recent weeks government officials around the world have put forth several high-profile proposals for pumping huge amounts of money into aid for the world's poor -- the 2.5 billion people who live on less than $2 per day. I believe global economic development ought to be accorded far more attention than it usually gets, given its importance to economic growth and the battles against terrorism, disease, and the drug trade. But the focus on dramatic increases in foreign aid could be an overreach and an ill-advised diversion from other critical approaches to alleviating poverty.
On Jan. 17, the U.N. released a report imploring wealthy countries to double their foreign aid. The goal: to halve the number of people living in extreme poverty by 2015. Shortly afterward, Britain proposed a modern-day Marshall Plan for Africa. It also called for a major injection of funds that would come from issuing new government-guaranteed bonds. French President Jacques Chirac, meanwhile, suggested raising aid with new international taxes on such things as financial transactions and aviation fuel. Japan pushed a big recapitalization of the African Development Bank. The Group of Seven asked the International Monetary Fund to sell some of its gold holdings to provide even more assistance. All this occurred even as more than $5 billion was being mobilized on behalf of the tsunami victims in Asia.
EVEN IF THESE IDEAS CAME TO FRUITION, it's doubtful that these proposals will produce the desired results. The fact is that huge amounts of foreign aid are already in the pipeline. The Organization for Economic Cooperation & Development estimates that its members will have increased their assistance from $58.3 billion in 2002 to $88 billion by next year. The research of Todd Moss of the Center for Global Development in Washington shows that for at least 20 African nations, foreign aid constitutes more than half their public expenditures. And let's not forget the large and growing antipoverty programs of organizations such as the Bill & Melinda Gates Foundation.
Moreover, most development experts acknowledge the impediments to effective use of aid brought about by poor governance and corruption in many developing countries. Are the donor nations assuming that these obstacles will be miraculously washed away with enough money? Are they also counting on the disappearance of the notorious lack of coordination by aid-giving agencies that leads to enormous waste?
I'm for more aid, to be sure -- if it is wisely used. The current frenzy seems more like political one-upmanship among governments than sound policy. It could set unrealistic expectations that result in public disillusionment with development efforts.
It also could draw attention away from alternatives, such as strengthening the engines of economic growth in developing countries, including the private sector, and from ideas, such as those of Peruvian economist Hernando de Soto, who advocates giving poor people clear title to the land and housing they already occupy, so that they can use their assets as collateral for credit.
What is most disturbing is that the calls for aid could undercut efforts to liberalize trade. Poor countries face high tariffs, quotas, or subsidized competition from rich nations in industries such as food processing, textiles, and agriculture. The World Bank estimates that a substantial dismantling of these barriers could be worth $350 billion to the developing world in the next decade and could lift 144 million people out of poverty. Reducing trade barriers would also help consumers in the industrialized nations.
Trade protection in the U.S., Europe, and Japan from agricultural subsidies alone amounts to $1 billion a day. Global trade negotiations are moving at a snail's pace, and they don't adequately address some of the most important impediments to development and poverty reduction -- such as the provision of cheap medicines. Too little technical assistance is being provided to poor countries to allow them to maneuver effectively through the complex procedures of the World Trade Organization. The question shouldn't be aid or trade but the relative emphasis given to each. Right now, the scales are becoming dangerously imbalanced.
Jeffrey E. Garten is dean of the Yale School of Management. Copyright Jeffrey E. Garten. All Rights Reserved.
|© Copyright @ 2004 Keynote Resource Inc. All rights reserved. Permission is granted for linking to web pages within Keynote Resource
Keynote Resource speakers bureau can help you find the ideal keynote speakers for your next event. We represent inspirational speakers, motivational speakers, corporate entertainment and more.
Keynote Resource speakers bureau will find the perfect keynote speaker for your upcoming event, whether you are looking for inspirational speakers with a message, motivational speakers to set the tone of your conference or a facilitator for your annual retreat.
Keynote Resource speakers bureau works closely with executives, meeting planners and training directors to create events that result in highly productive learning or are just plain fun. We can identify business speakers, inspirational speakers or motivational speakers that are well suited to your event, send you videos and press kits to help you with your speaker selection and we’ll work closely with the keynote speakers you hire to ensure they customize their presentations to meet the specific needs of your audience.
We have speakers in all areas including Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin.
We can book speakers for you worldwide, in Canada, New Zealand, Australia, Singapore, Hong Kong, China, Ireland, England, France, Italy, Switzerland, Denmark, Sweden, Brazil and The Bahamas. Click Here to Search A Speaker
Speaker fees are determined based on a number of factors and may change without notice. Fees may vary based on the speaker’s availability, supply and demand, program length and location of the event.
Each fee range listed on this website is intended to serve as a guideline only. In some cases, the actual price quote may be above or below the fee range stated. For the most current fee, please contact your representative directly.