In mid-May the United Nations met in Brussels to discuss the fate of the 49 poorest countries of the world. Unfortunately the only solution the UN seems to have is to repeat past mistakes in calling for large increases in foreign aid to such countries.
UN secretary general Kofi Annan is certainly correct that aid from the developed countries to the less developed countries declined significantly in recent years. In real dollars, per capita aid flowing from rich countries to poor countries fell 45 percent in the 1990s alone, and now hovers at early-1970 levels according to the BBC. Annan wants to reverse this trend, saying in Brussels,
I urge all developed countries to meet the 0.7% target — and within that to allocate at least 0.15% of their gross national product to helping the LDCs, as they promised at the last LDC conference in Paris, ten years ago.
Part of the decline in aid is attributable to the Asian financial crisis that began in 1998, but there is probably a much larger force at work — a healthy skepticism on the part of developed countries over whether or not throwing money at LDCs really furthers the sort of structural changes that these countries require.
It is difficult to see, for example, how a flood of aid from the developed world would aid the 49 countries that are among the poorest of the poor (with per capita GNP’s of less than $900 per year). These are countries such as Afghanistan, Liberia, Myanmar, Somalia, and others where economic development is held back by dictatorial regimes, excepting for Myanmar, very active ongoing civil wars. It is the complete destruction of civil society in places like Afghanistan and Liberia — rather than any lack of foreign donor aid — that is responsible for such ludicrously poor economic performance.
Pumping millions of dollars into development projects in these sorts of countries didn’t work in the 1970s and 1980s, and it is unlikely to work today.
Source:
UN Meet on poverty. The BBC, May 16, 2001.