There is this oft-quoted anecdote about Mahatma Gandhi’s efforts to teach villagers how to keep the villages clean and teach them self-reliance. He, along with his few associates would enter the village early in the morning with a broom and start cleaning the dirty roads. He would do this for a week in the hope and belief that the momentum would be picked up by the villagers and they would understand the importance of cleanliness. For a week Gandhi could not visit the village. One morning he saw a few villagers in a group in front of his cottage. They were asking Gandhi why he has not turned up to clean their village as it has again become dirty. While the authenticity of this is doubtful it does throw light on a very important but often hidden under-the-carpet issue of the impact of donor funds on the borrowing village, town and country at large.
Donor funding- irrespective of the underlying motives and we will come to that in a bit- increases dependencies and the real objective of self-reliance is rarely achieved. Since I started with an example from India let me illustrate with another example. By a very conservative estimate over a billion $ of donor funding representing the World Bank, Asian Development Bank, and European Donor agencies has gone to improving the skill development and vocational education ecosystem in the past 20 years. What has been the outcome? The government can not even put on record how many trained youths have obtained jobs. Shady training institutions, fraudulent practices virtually at every step of the program, ill-thought-out qualification frameworks, and multiplicity of monitoring agencies duplicating each other’s efforts are some of the few disturbing results one has to grapple with. Of course, the major fallacy in designing the skill training architecture was the linking of poverty alleviation with skills training.
As it is vocational skills had no credibility of their own and when they got linked to the poorest of the poor only the illiterate, economically deprived and bottom of the societal pyramid were brought thus reinforcing the negative fulfilment prophecy. But I am digressing here. The purpose of this note is not to examine India’s flawed vocational training policy but to examine the impact of donor funding on sovereign countries. As I have some experience working in Africa, I have noticed similar trends wherein donor funding has not only increased the dependencies but has also resulted in stunting of growth and increased corruption- something exactly the opposite of the original intention. The fact, therefore needs study, whether aid increases dependencies. One also has to ask this rather uncomfortable question in this context whether aid is given to bring about homeostasis or is it deployed as a tool to infiltrate and influence the political ecosystem. Has international aid and the country’s overall progress become an oxymoron? It is now an established fact that countries like China have used aid as a national policy tool to force the recipient countries to fall into a debt trap from which they can never hope to recover.
The classic cases in recent times are of the Sri Lankan port of Hambantota which has now been controlled by China as Sri Lanka is unable to repay the debt. Another example is that of the Zambian Airport being taken over by China for the very same reason. The third example is of the broad-gauge line between Nairobi and Mombasa financed by China. The total cost of the project has been pegged at 3.8 billion $ and 85% of this funding is in the form of debt which by the way is over 50% of Kenya’s external debt. Has the international aid been camouflaged to establish control over the political system of the recipient country? To counter-check this few donor agencies like USAID etc have created a very complicated accounting system of checks and balances that unfortunately is taking much precedence over everything else often resulting in hurting the central objective of the assistance.
Another hypothesis one needs to examine is whether international in the form of import and finance affects local/national growth adversely. A case in point is of Pakistan which has become so aid dependant and has become a basket case sounding a death knell of its local industry. It has also been argued that due to the excessive involvement of the donor agencies in the political affairs of the recipient countries, the political establishments have to often talk in two voices one to the donor agencies and another to its population. That ambivalence is also detrimental to them.
How do the nations stop depending on international aid and chart their own independent course? That calls for a different set of breeds of leaders who have a well-articulated country mission and roadmap to achieve that. The example of Singapore comes to mind. In the early 40s, the island nation had nothing to brag about and had an unsavoury reputation. A leader like Lee Kuan Yew is credited for transforming this tiny island nation from a third-world pariah to a first-world star. Another country making spectacular progress by using aid funding judiciously is Rwanda. The credit largely goes to its President Paul Kagame. The challenge for the donor agencies is how not to get linked with the complications of the political system and governance and yet make meaningful interventions that increase entrepreneurship and the creation of enterprises managed by the locals. Taiwan is a classic case where the local infrastructure development has been astonishing. Here I need to mention one important aspect that can influence the aid impact. Each country has its own skill sets, ecosystem and unique ways of behaviour. This contextualization is a very important factor. Simply transporting something that has produced results elsewhere is not the right prescription.
