It can seem petty to criticize the international aid efforts of North American and European nations. Several aid organizations, for example, have challenged the conclusions reached by Dambisa Moyo in her book, Dead Aid, in which she documents the failure of bilateral aid programs to alleviate poverty in Africa. While Moyo does tend to overstate her position, it is difficult to argue with her basic premise. She came to the same conclusion that the Canadian Senate came to in 2007 in its assessment of the effectiveness of Canada’s aid programs in Africa. Both determined that the impact of the aid Africa has received as been negligible in improving conditions in that continent. [It should be noted that both Moyo and the Senate focused on government-to-government aid programs].
There are several reasons why aid programs can be ineffective. The example of Bangladesh during the 1980s, to consider one of many similar situations, can be used to demonstrate how the best intentioned aid programs can have significant unforeseen consequences.
Bangladesh, previously East Pakistan, achieved independence from Pakistan in 1971, but was almost immediately overcome by civil strife, including a series of military coups. Some degree of stability was finally achieved when the army, under the leadership of General H. M. Ershad, took control of the government from 1982 until 1991.
About half of the gross domestic product of Bangladesh is based in agriculture. It remains a predominantly rural society, with 80% of the labor force involved in agriculture related activities. But the country has remained poor with a current (2010) per capita Gross National Product of approximately $1,700.
From 1973 through 1987, nearly a quarter of all the foreign aid Bangladesh received was in the form of long-term relief assistance, specifically food supplies, grains which had been sent from developed nations, like the United States, which had large grain surpluses. In point of fact, the grain was not given free of charge to the people of Bangladesh; rather it was sold to the Bengali government, although at reduced prices. And the immediate benefit was more to the advantage of the donor nation than the recipient; the grain surplus in the US was reduced, helping to maintain the price of grain in that country at relatively high levels.
The benefit to the Bengalis was more questionable. Once the government had purchased the grain, it had responsibility for distributing it. And they had particular priorities. About three-quarters of the grain went to members of the government, civil service, the police, the military, and the urban working class. Only 22% of the grain went to the 80% of the country’s population which were the rural poor, although they were the people suffering most acutely from malnutrition.
Further, the foreign grain shipment not only didn’t benefit the rural population, it even undercut the prices which Bengali farmers could charge for their own crops. And since the main grain shipped from the US was wheat, the aid also had the effect of promoting the consumption of a product that wasn’t–and never would be–produced locally.
Instead of promoting food self-reliance, the food aid program to Bangladesh weakened the local agriculture industry and created a dependency on foreign food sources.
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