Friday, February 22, 2008


Rightwing newspaper the National Business Review has discovered aid and development. As one might expect the results aren't pretty nor, despite the name of the blog in question, in any way insightful.

Social Democrats rate countries on their foreign aid donations, which is why rich Nordic nations are held up as exemplars.
...and there I was thinking that the Nordic countries' domestic social models had something to do with Social Democrats love for them. As for rating countries on their foreign aid donations, the people who do the most of the OECD. The OECD aren't exactly a Social Democrat pressure group as far as I'm aware - their main interest in rating countries is holding their wealthier members to the commitment, made in 1970 and reaffirmed several times since, to giving 0.7% of GNI as aid.
But foreign aid statistics throw up some strange facts: the US, Japan and the countries of western Europe give by far the most.
...which is solely because these countries have larger GNI's. It's easier for them to give more - because they are bigger. But in terms of effort (what they give as a proportion of what they could give) the USA ranks down the bottom of the OECD donor countries.
But Swedish economist Stefan Karlsson has estimated the largest is, in fact, China based on its low yuan policy of transferring vast amounts of wealth to foreign countries by undercharging for its exports.
...Swede? I think we're more likely to be dealing with a turnip. China's undervalued yuan isn't an aid programme. It is, in effect, a subsidy for Chinese businesses. Sure this makes its exports cheaper. And sure consumers in other countries benefit from this. But producers don't - it undermines their ability to compete. And for most developing countries, which need to produce something before they can start consuming, this simply holds back their development.
The US Institute of Peace calculates that Palestinians, better known for their terrorism, are the world’s largest recipients of foreign aid per capita.
No they don't, they state the Palestinians were the largest recipients of foreign aid per capita. (Aid was curtailed once the Palestinians elected Hamas). You've got to love the logic though. Some Palestinians are terrorists. Therefore no Palestinians are human. Therefore aid given to Palestinians is not humanitarian. Yup, we're orbiting in the outer edges of the lunisphere now.
The debate over the effectiveness of government aid has long been a topic of concern to economists, with the most compelling criticism coming from Professor William Easterly, of New York University.
William Easterly does offer a credible critique of the way that much aid is given (he still supports its giving though) but Easterly's arguments are far from perfect.

Finally, the article criticises NZAID (our government aid body) on the weight of the auditor general's report. But this report, while identifying some real accounting issues, doesn't change the fact that - as the Council for International Development notes - NZAID's actual aid giving practices are universally considered to be some of the best in the world.

Aid and development are complicated topics and if this is the depth with which they are going to be addressed it would be better if the NBR simply didn't bother.

No comments: