Interesting questions raised over at the journal of IT and International Development in a special issue published today: Open Development. I’m still reading it, will share thoughts when I’m done.
Fascinating and rare interview on Channel4 News tonight with Bill & Melinda Gates talking about their anti-polio vaccination program. There are lots of potential criticisms of the Gates Foundation. For example, the polio program, they say, costs a billion dollars a year – is that the best use of that money? Personally, I’m uncomfortable with the fact that the Foundation is the world’s most philanthropic organisation, but is relatively unaccountable, and the system that allows one couple to amass that amount of money in the first place is probably broken.
On the whole, though, this is a bit churlish. The Gates Foundation does do good work that otherwise wouldn’t get done and we live in an imperfect world with imperfect solutions, and all that. I do, however, disagree with Bill’s line early in the video (around 2.30) that “health aid really is not much affected by corruption”.
Here’s how it was explained to me in Zambia a couple of years ago. Aid agencies and governments decide to donate medical supplies to poor countries, say a bunch of CD4 measuring devices for HIV/AIDS victims. Rather than just shipping a few crates of the monitors to the hospitals that need them, the recipient government is given the money to buy the devices from, say, a European company that makes them.
Not hugely objectionable, indeed, possibly a great way of stimulating economic growth in both countries at the same time. But what happens is that every government official who deals with the transaction wants to take a ‘commission’ or cut, because that’s the ‘traditional way of doing business in Africa’ (their generalisation, not mine) you’re told. The Europeans can’t agree to this, because that would be seen as corruption, which they can’t sanction. Even though they’ll take their own legal cut from the deal, which we call profit.
Instead of confronting the issue head on or alerting the relevant anti-corruption watchdogs, the European company doesn’t want to lose out on the highly lucrative deal, or jeapordise future business, so it comes up with a plan.
The supplier sells the montiors to a local distributor, who handles all the dealings with the government and makes sure the right palms get greased. The distributor, naturally, also takes a cut for its efforts in ensuring the smooth flow of business.
The upshot of which, of course, is that far fewer CD4 monitors arrive with the impoverished AIDS victims who need them. Goodwill is lost between donor and recipient nation and everyone gets a little more world weary and cynical next time the call goes out for help.
This may all seem rather innocuous given the flagrant abuses of aid money in some areas. But it’s just the iceberg’s tip. Don’t take my word for it – Sweden announced just three days ago it was cutting its support for the Global Fund to Fight AIDS, TB and Malaria because of graft.
Ironically, the GFFATM (I don’t think they often go by that acronym, thankfully) is protesting at the Swedish claims, but it too axed funding to Zambia for exactly the same reasons last June.
So yes, Bill, I’m afraid there is corruption in health aid.
Taken from Bill Easterly’s excellent blog, AidWatch. If anyone recorded him speaking at the UN summit last night, please send a link to the video.
The OECD & UN have published their joint 2010 Mutual Review of African Development Effectiveness today, to coincide with the big summit on the MDGs which is taking place in New York. The 88 page report is a mere 4MB download and I’ve had a quick skim, ready to look through properly later.It’s mostly predictable stuff – highlighting successes in Africa and the problems of the economic downturn – but the significance it gives to climate change is perhaps important. One of its calls to action is “To reach agreement on ambitious and binding targets for the reduction of carbon emissions, which is essential to achieving sustainable development in Africa”, which seems fairly unequivocal for an organisation as conservative as the OECD. There’s a call for cash to help Africa deal with the effects of climate change too.
Less surprising is the consistent message throughout the report that African countries need to free up their markets even further. For the OECD, of course, protectionism is a dirty word which must never be spoken of and the free market is all. I quote:
“Trade is already contributing to recovery and is an essential element of sustained growth and development. Continuing to resist protectionist measures is necessary, but it is also insuf cient.
Further market opening is also needed. Africa’s partners need to inject political will and momentum in order to reach an early, ambitious and balanced outcome to the WTO Doha Development Round”
As that quote suggests, African countries may be starting to think for themselves on this one. In Zambia, there’s a big debate about nationalisation in the mining sector (not entirely unlike the nationalisation of some banks in those OECD countries which bang the gong for free trade) following the discovery that many foreign (read Chinese) firms which came in under free trade rules imposed by the IMF/WHO not only fail to invest beyond the basic infrastructure for getting raw materials out of the country, but are actually net negative contributors to the tax coffers. In other words, they don’t employ as many people as they say they will, ship the raw materials like copper overseas to process it and ‘add value’ back home, import Chinese workers to actually do the infrastructure work (like building roads) rather than paying locals to do the same job (and learn the skills) and, on top of all that, claim a tax refund from the Zambian government for doing so.
The free marketeers are laughing all the way to the bank on this one, and it’s not just Zambian money that’s being given away. 27.3% of Zambia’s GDP comes from international aid.