Claire Melamed argues that rich countries must not be allowed to use the worldwide economic crisis as an excuse for evading their development commitments
RECENT events have shown both the best and worst of the international aid system. The best was seen when public pressure and outrage, combined with government commitment, led to the announcement at the G20 in April of an extra $50 billion to help poor countries through the financial crisis. And it was seen, again due to a combination of public pressure and politicians’ determination, when the Chancellor defended Britain’s aid promises in the recent Budget.
However, the International Monetary Fund and World Bank meetings in Washington at the end of last month degenerated into the sickening spectacle of governments trying to wriggle out of the promises they made at the earlier G20 gathering in London. Amid the usual politicking and obstructionism, the promises were hedged around with so many delays and caveats that it is questionable how much of that $50 billion poor countries will actually see.
Sadly, we can expect the same again at the G8 meeting in July, when many leaders will weep crocodile tears over how they have been forced, tragically, to cut their aid budgets due to the financial crisis. This conveniently forgets the fact that some of them had been slashing aid while the economic crisis was still a gleam in the eye of Lehman Brothers.
We can be forgiven for experiencing a touch of déjà vu here. Following the drama of last year’s food crisis, an outbreak of competitive generosity broke out among rich countries. They all pledged huge amounts to help people cope with the effects of a crisis caused largely by the United States and the European Union switching agricultural output from food to fuel crops. But, as soon as they returned to the preoccupations of domestic politics, the promises were largely forgotten and very little has been delivered.
This is no way to end poverty. And, in case we forget what this is all about, we should remember that in developing countries the combined effects of the food, financial and climate crises – all largely created in rich countries – mean that development is going backwards. The number of hungry people in the world has crept up to more than a billion. Girls are being taken out of school, women are turning to sex work to survive and families are forced to choose who eats and who goes hungry.
The real tragedy in all this is that many of the people affected are those who probably thought things were finally getting better – who might just have stopped needing our aid. The people who had just got their first job or scraped together enough money to send their first child to school are those who are now being really knocked back by the crisis. The mantra of helping people to help themselves wears pretty thin when the way in which we run our banks and farms makes that almost impossible.
It is wholly unacceptable that whether a girl in Malawi gets to go to school or whether her mother dies in childbirth should depend on International Development Secretary Douglas Alexander managing to convince his Cabinet colleagues that supporting development is politically in vogue. Nor should it depend on whether Silvio Berlusconi decides he would rather spend the money on something that might get him more votes in Italy.
And it is totally unacceptable that policies designed to liberalise finance or promote biofuels in the US and Europe can be pursued enthusiastically by governments which take no responsibility for the terrible effects these policies have on poor people throughout the world.
The current financial crisis offers a once-in-a-lifetime opportunity to think beyond the usual solutions. If, as many governments, philosophers and economists would have us believe, aid is both a moral imperative and something that benefits both givers and recipients in the long run, then perhaps it is time to place it on more stable and less political foundations.
The first thing that governments could do is to write their international commitments into their domestic laws. This could include the promise all rich countries made nearly
40 years ago to give at least 0.7 per cent of their gross domestic product in aid. This should make it impossible for politicians to bask in international glory as generous benefactors to the poor while the cameras are rolling, then quietly consign promises to the dustbin once the photo call is over.
Old ideas are making a comeback. Suddenly, tax is in favour again among policymakers. International co-operation is needed to stop multinational companies wriggling out of their tax obligations and ensure the private sector really does its bit for development.
How about a universal minimum income guarantee, so that all governments have legal obligations to provide the money needed to ensure everyone in the world gets a basic income? Or even – whisper it – redistribution of wealth to correct the appalling inequalities in a world where rich people are rewarded in the good times and the poor are punished when things go wrong?
Making aid a requirement rather than a choice that rich countries can make if it is politically useful would have two benefits. First, it would put our commitment to the world’s poorest people on a more stable footing. This would help governments and people to plan for a future where they can invest and know they have protection in times of economic difficulty. Second, it would provide a real incentive for the governments of rich countries to ensure their policies don’t have the effect of making poverty worse. If governments know that policies which are bad for development will cost them money (as the poverty caused would increase their aid commitments), they might think twice about how what they do at home affects poor people everywhere.
Problems of poverty and development should not be exempted from the radical new thinking that has been promised since the crisis first erupted. We need to reject the old world where politicians can create unspeakable suffering around the globe and then walk away from their responsibilities, and instead remake the aid system on the basis of equity and solidarity.
Claire Melamed is the head of policy at ActionAid UK
