Unwrapping The Gift

The State of Aid in Reducing Poverty in

Sub-Saharan Africa: Major Historical,

Economic and Political Perspectives

There are approximately seven billion people living on this earth (World Bank, n.d.). Some of us live with excess but three billion

people are living in poverty.

Many of these people live in Sub-Saharan Africa.

Sub-Saharan Africa

Dark and light green shows Sub-Saharan Africa

(Sudan [light green] is considered North Africa by the United Nations, but is included in their statistics by their institutions)

Image: Sub-Saharan Africa, Wikipedia (1/9/2013)

ABSTRACT

The gifting of foreign aid is a major strategy in the reduction of global poverty. This article examines the major historical, economic and political influences in the provision

of Official Development Aid (ODA) to Sub-Saharan Africa. A brief history of Africa as it relates to the current situation of foreign aid provision in many parts of Africa is discussed. Economic and political factors in both the donor and recipient countries are explored. Contemporary economic and political influences are then examined, and an integrated discussion draws together the concept around the effectiveness of ODA in the region. Despite some minor successes, the findings strongly indicate 60 years of foreign aid have failed to significantly reduce the high levels of poverty in Sub-Saharan Africa.

INTRODUCTION

Africa is a continent of great diversity. The many cultures are vibrant, but there is much poverty and suffering. Sub-Saharan Africa (SSA) is the geographic area either fully or partially south of the Sahara (Sudan is considered part of Northern Africa but is considered part of SSA for statistical purposes in UN reports). It is the most linguistically diverse area in the world with over 1000 tribal groups and languages (Sub-Saharan Africa, n.d.). Northern Africa and Sub-Saharan Africa are separated by the Sacel zone (see Figure 1) between the tropical savannah (the Sudan region) and mostly forested savannah to the south (Sub-Saharan Africa; n.d.; Sahel, n.d.). It is further classified according to East, West, Central and Southern Africa (which this report will collectively call Sub-Saharan Africa).

Figure 1: The Sahel

Source: Sahel (Wikipedia)

The World Bank estimates the current population of Africa to be just over one billion, and the United Nation predicts it will rise dramatically to around 1.5 billion by 2050 (World Bank, n.d.). Around 40% of the population are under 15 years of age, including Sudan, excluding South Africa (United Nations, 2008). Malaria and HIV/Aids are the biggest risk of early mortality, in addition to malnutrition and general poverty (Rwabutomize, 2008; Thornton, Albertyn, Bertelsmann-Scott, Vaillant and Vickery C.

(2010). Of the 48 countries in the region, approximately 70% are classified as low income countries.

It is estimated that there are between 840 million to 1 billion people living in extreme poverty around the world, many of these people living in Sub-Saharan Africa (Collier, 2007; Easterly, 2006). Three billion live on US$2 per day (Easterly, 2006). In 2008 it was estimated that 50% of people in Sub-Saharan Africa live on less than $1.25 per day and over 70% live on under US$2 per day (Thornton et al., 2010). Poverty is characterised by the lack of a certain amount of material possession or money (Poverty, n.d.). Extreme or absolute poverty means not having enough to meet basic human needs, such as food for good nutrition, water, sanitation, clothing, shelter, health care and education.

Africa receives a 36% share of total global foreign aid; more than any other part of the world. In the last four decades, this has quadrupled from approximately US$11 billion to US$44 billion, much of this going to Sub-Saharan Africa (UN Office of the Special Advisor for Africa, 2010). Whilst there have been some fluctuations, foreign aid has increased significantly since 2000 to approximately US$25 billion per year (Negin and Denning, 2011).

Poverty is a tragedy in Africa, as in other parts of the world. Never has there been a time where there has been such an enormous gap between people living in wealth and poverty, with people in Sub-Saharan Africa living in the equivalent of 14th century conditions (Collier, 2007). Easterly (2006) concludes that the second tragedy of poverty is that US$2.3 trillion has been spent on foreign aid over the last five years and he argues that there is very little to show for it.

Whilst foreign aid is just one strategy to increase economic growth and reduce poverty, there has been ongoing debate into foreign aid effectiveness since it was directed to poor countries, including Sub-Saharan Africa over 60 years ago. Prominent economists, who seem to have equal passion and expertise in reducing poverty hold different, sometimes polarised perspectives. Professor Jeffrey Sachs, the Director of the United Nations Millennium Goals Project (discussed below) believes aid is a major part of the solution to Africa’s poverty and recommends that more be gifted (Sachs, 2005). On the other side of the debate, Professor William Easterly (Co-Director of the Development Research Institute) and Dr Dambisa Moyo, a Zambian born economist suggest there is little evidence that foreign aid is effective in reducing poverty in Sub-Saharan Africa, and that it may be holding Africa back from economic independence and poverty reduction (Easterly, 2006; Moyo, 2009). This article examines these facts to encourage public debate as to whether aid should continue.

POVERTY DEFINED AND MEASURED

What is poverty?

A clear definition is required to accurately measure poverty. The United Nations (UN), an international governmental organisation responsible for facilitating the Millennium Development Goals (MDG’s), defines poverty as:

“a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to; not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living on marginal or fragile environments, without access to clean water or sanitation.” (UN, 1995; cited in Gordon, 2005).

The Copenhagen Declaration (UN World Summit 1995) further states that:

“absolute poverty is a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to social services” (UN, 1995; cited in Gordon, 2005).

Gordon (2005) describes poverty as deprivation being on a continuum from no deprivation through mild to extreme deprivation. He gives eight specific measures or indicators of poverty, being:

1. Food for adequate nutrition

2. Safe drinking water

3. Clean sanitation

4. Health

5. Adequate shelter

6. Education

7. Information

8. Access to services

How is poverty measured?

Accurate measurements of poverty are essential as they provide a framework for policies and practices for poverty reduction. There are several different measures of poverty. This report will discuss the most widely used measures for the region of Sub-Saharan Africa, these being:

1. Living on less than $1.25 per day

2. Human Development Index

1. Living on less than $1.25 per day

Children in a Nairobi Slum, Kenya

The World Bank and the UN applies a working definition of poverty as being people living on less than $1.25 per day (originally known as “$1 a day”) based on converting currency to purchase commodities (Poverty, n.d.; Ravallion & Chen and Sangraula, 2009.). This figure has been adjusted for purchasing power. Ravallion et al (2009) discuss the international development community’s original aim of highlighting the ‘$1 per day’ poverty measure, arguing that people in developed countries would be shocked by this rate, which equated to earning around US$325 per year (based Western norms of $1.25 per day for five days for 52 weeks per year). The average American wage in 2011 was US$42,979.61 (Social Security Association, n.d.).

2. Human Development Index

The Human Development Index (HDI) is another method used by the UN to measure statistics related to poverty. Criteria includes life expectancy, education (mean years at school and expected years at school), and income, with countries divided into four levels., being life expectancy at birth, mean years of schooling, expected years of schooling and gross national income per capita (GNI). A HDI measurement of below 0.5 is considered to be poverty (Human Development Index, n.d.). 1

THE ROLE OF FOREIGN AID

What is foreign development aid?

There are three basic types of aid, including humanitarian or emergency relief (in response to catastrophes and crisis situations), aid directed by and to non-profit organisations and payments made directly to the recipient government from the donor (foreign) government (known as bilateral aid) or funds transferred from different member governments through one agency, such as the World Bank (a major organisation which provides loans and grants) as a loan (known as multilateral aid) (Moyo, 2009, Riddell, 2007).

The scope of this study is foreign aid development, also known as Official Development Assistance (ODA). ODA was coined by the Organisation for Economic Cooperation and

1 In addition to the Human Development Index is the Human Poverty Index (HPI) published by the UN

(introduced in 1997) (Human Poverty Index, n.d.). This measures survival (how likely a person will die at 40 years of age in developing countries), knowledge (measuring adults who are not literate) and having a decent standard of living (UNDP, n.d.). The Multidimensional Poverty Index (MPI) is another measure used by the UN but at this stage, is only available for some countries so regions are not described (MPI) (Multidimensional Poverty Index, n.d., UNPD, n.d.) Both are not measures commonly reported on a regional basis, so are not within the scope of this report.

Development (OECD) as a way to measure aid (Official Development Assistance, n.d.). ODA is monetary grants coming from another country (foreign) to the government of a developing country (donor country) or other agencies, including non-profit organisations, contracted service providers and departments of the donor country, for example, the Australian Agency for International Development (AUS Aid) to assist the recipient country in economic development.

Other strategies to reduce poverty, including privately funded aid (including public donations to charities) and foreign investment are outside the scope of this study.

What is the commitment of foreign aid in reducing poverty?

At the United Nations World Summit on Social Development in Copenhagen in 1995, 117 countries committed to reducing global poverty, encompassing both absolute (extreme poverty) and overall poverty. This resulted in the Millennium Development Goals (MDGs) at the UN Millennium Summit in 2000 following the adoption of the United Nations Millennium Declaration (Millennium Development Goals, n.d.) The first goal, to “eradicate extreme poverty and hunger” by half by 2015 is perhaps a tall order. The other seven goals are also directly or indirectly related to reducing overall poverty, which are discussed below (‘Discussion – Millennium Development Goals’).

There are three specific MDG sub-goals which include reduction of people earning less than US$1.25 a day; people, particularly women and young people having employment; and halving the number of people who suffer from malnourishment as a result of hunger. There are also specific programs for targeting child mortality under five years of age (United Nations, n.d., a). In 2005, the UN World Summit agreed to significantly extend the funds available for achieving the Millennium Development Goals. As discussed below, this increase has not been forthcoming from many countries who made this commitment.

POVERTY IN HISTORY

Understanding of the past gives us a deeper perspective on the current state of foreign aid and helps us to look at more effective ways to significantly reduce poverty in Sub-Saharan Africa.

Early Humans

It is widely believed that the human species (Home sapiens) originated in Africa. Having the ability to walk and use their hands allowed them to adapt to changing weather patterns around 5 to 10 million years ago when much of Sub-Saharan Africa changed from forested areas to savannah grasslands (Shillington, as cited in History of Africa, n.d.). Homo sapiens have lived in the east and south of Africa for possibly more than 100,000 years.

The hunter-gatherer required a limited amount of effort to gain enough food and needs were simple. A sudden change in climate (leading to flood or famine) or disease may have led to poverty (lack of food or ill-health) then perhaps death. Agriculture led to a more settled existence in larger groups, but still people’s welfare was in part subject to the climate. This has continued to be the case throughout human evolution, and with climate change being a reality, this will affect us more than ever before.

How did slavery affect poverty?

Slavery in Sub-Saharan Africa has been a part of the region’s history for many centuries (Slavery in Africa, n.d.). It was originally contained within a local geographical area. From the late 15th century, Arab and Atlantic slave traders took slaves to different parts of the world. Generations lost family members to the slave trade which had been in operation for centuries, leaving many in poverty. In some ways this is not dissimilar to HIV/Aids and malaria robbing people of family members today.

Where did formal charity begin?

The first formal types of charity to aid those in poverty began in the Middle Ages. Impoverished people would beg for alms from strangers in public places, most often at churches or funerals of wealthy deceased (Charity [practice], n.d.) The poor would be paid to pray for the dead and in return they would receive food. In Islamic Cairo, Egypt, in line with Christian values, giving to the poor was seen as pleasing to God (Lewis, 2012). Giving alms to the poor is also practiced in other major religions and philosophies, including Sub-Saharan Africa are still religious based, for example, World Vision and the Red Cross. Catholic Churches are often responsible for medical clinics. In the late 13th century, Paris had many beggars, who Monks began to copy. This was the start of religious and social welfare for the poor.

INFLUENCES OF ECONOMIC AND POLITICAL HISTORY IN FOREIGN AID

How has economic history influenced foreign aid?

Trade between countries has been occurring for many centuries. Global trade is also part of donor country interests in developing countries, including Sub-Saharan Africa, which is often linked to foreign aid today (discussed below).

Toward the end of the 15th century, the Portuguese were the first Europeans to have a permanent presence in Sub-Saharan Africa. They were mainly interested in Africa for economic reasons, with trading already being well established along parts of the coast (Lewis, 2012) such as Mozambique Island. These financial outposts could be considered the start of early colonisation.

The economy of England is believed to have thrived during the time of the Tudors in the 15th century. Chang retells the work of economist Daniel Defoe’s ‘A Plan of English Commerce’, (Defoe, 1728; cited in Chang, 2007) examining how the ruling Tudor family of the 15th century implemented economic protectionist strategies (well before the industrial revolution). Bans and taxes were managed so that wool exports (and their products) could become one of England’s main domestic and export industries.

Defoe, supported by Chang, (2007) believed this was the first real evidence of England becoming the leading economy of the time. Similar protectionist policies in both Britain and other countries such as the US (19th and early 20th century) and other countries such as Germany, Sweden, Japan, Taiwan and Korea were adopted in later years to advance their economies. During this time the US economy thrived, becoming the leading economy for many years, and it still the major economy, with China following closely on its heels.

Later in the 18th century, Britain’s Prime Minister Walpole adopted the mercantile system of economics which encouraged manufacturing and foreign trade surpluses (Mercantilism, n.d.). This encouraged similar protectionist policies introduced previously by the Tudors, including subsidies to manufacturers and tariffs on imported goods (Chang, 2007).

Adam Smith, the world’s first well-known free market economist opposed the British mercantile system in his work ‘The Wealth of Nations’ (Smith, 1776, cited in Chang, 2007), arguing that continued protectionist policies could hinder economic growth. He advocated free trade as the way forward for Britain’s strong economy, which was already competing well on the world market. Nearly 100 years later Britain became a true member of the global free market.

Parts of North America, which were then British colonies with major restrictions on manufacturing, followed the mercantile system after gaining independence (Economic History of the United States, n.d.). The US experienced rapid economic development through industrial manufacturing in the second half of the 19th century. Chang (2007) attributes this at least in part to similar economic protection policies that led England to its previous economic successes.

The Industrial Revolution (1760 – 1820, possibly 1840) which started in Britain brought a new era of scientific discoveries, technology and empire expansion (Industrial Revolution, n.d.). Jeffrey Sacks states that prior to the industrial age reaching its height, approximately 90% of people lived in extreme poverty, now it is around 15-20% (Sacks, in Lewis, 2012).

Changes were rapid in evolutionary terms. People in ‘first world’ societies progressed from using simple tools, growing their own food or trading in the local village and rarely

travelling outside of their home areas to lives with increased wealth, travel and education.

However, not all geographic regions experienced this unprecedented growth. Africa and other parts of the world lacked the knowledge, resources and close proximity required to participate in the industrial revolution. This would have a major impact on Sub-Saharan Africa.

How has political history influenced foreign aid?

Little written knowledge is available for pre-colonial Africa. Although it is believed some areas and tribes were thriving, it is assumed that life was not easy for the average African with tribal conflicts and often harsh monarchies and chiefs (Moyo, 2009; Pakenham, 1991).

By the end of the 18th century, Europe had mapped enough of Africa to see the potential for empire building and the wealth that could be gained. David Livingstone travelled to Africa in the mid 1800’s with the view to colonisation, and also to an alternative economy to slave trading. His three C’s included Christianity, commerce and civilization (Pakenham, 1991). Technological advances facilitated easier travel and communications. The Scramble for Africa (also known as the Race for Africa, or the Partition of Africa) had begun.

By the 1870’s, Europe controlled only 10 per cent of African land, however by 1914 all of the continent was colonised by European powers, with the exceptions being Liberia and Ethiopia (Scramble for Africa, n.d.). During the partition of Africa, meetings were held in Europe (the Berlin Conference, 1884) where statesmen and diplomats determined how Africa would be divided up. Many of the territorial boundaries ignored the social and cultural realities of the time (Meredith, 2005) arbitrarily dividing socio-cultural groups. Land was taken, which resulted in people being forced to work for the new owners or to beg.

Even though parts of Africa were thriving prior to colonialism, poverty became the norm (Lewis, 2012). 10,000 existing forms of traditional rule were condensed into forty European colonies, which then became the boundaries for most modern African states. Some areas were taken by force, others by treaty (Meredith, 2005). Most areas rebelled, but were ultimately subdued. Britain took over two Boer republics in present-day South Africa. Deep bitterness from the Afrikaner people ensued, resulting in their eventual gain of control of South Africa until the first non-racial democratic elections (following the end of apartheid) in 1994.

Colonialists continued exploiting Sub-Saharan Africa for their economic gain, building infrastructure such as roads, airport and harbours. This enabled export of commodities needed for their overseas wars and the general good of their economies (Meredith, 2005). Rather than benefiting the colonial African economy, most infra-structure was built to export raw materials that could be processed offshore.

Despite much bloodshed and effort in gaining control of Africa, interest waned as European powers realised there was not as much potential for wealth as they had foreseen (Meredith, 2005). Costs for running the colonies were high. Basic education improved through schools provided by 16,000 Christian missionaries. Economic development was left to private enterprise. As economies started to grow due to the export of minerals and agricultural products, some of the former chiefs were selected to fill important administrative positions.

Shortly after the Scramble for Africa, many major countries joined in the Second World War. This started in 1939 and ended in 1945, with the Allies defeating the Axis (Germany, Japan and Italy) (Second World War, n.d.). Thousands of African men fought in the war for the Allies, and gained skills in guerrilla warfare which became useful in the fight for independence soon after the war (Maathai, 2009). The War left much devastation through Europe and England. With the fear of a repeat of the Great Depression of the 1930’s, along with the potential rise of communism, a restructuring of international finance and trade was seen as imperative. The US Marshall Plan of 1947 (also known as the European Recovery Program) provided US$20 million (today worth around US$100 million) to Europe from 1948 - 1951. The Plan was designed to assist the restoration of damaged legal, social and physical structures of Europe, so that ultimately financial recovery would take place (Moyo, 2009).

The Marshall Plan saw the formation of many international development organisations that facilitated the economic recovery of Europe. These included the International Bank for Reconstruction and Development, known as the World Bank (responsible for capital investment for reconstruction), the International Monetary Fund (IMF) (responsible for the management of financial systems for the stability of the world economy) and the International Trade Organisation (Moyo, 2009). Both the World Bank and IMF continue to be key players in foreign development aid. Its current role is to encourage economic progress and world trade (OECD, n.d., a). It takes more than a layperson’s knowledge to grasp and understand the complex roles and how they relate to each other.

Europe’s recovery driven by US foreign aid was seen as successful. The US economy flourished as did Europe’s, thereby avoiding further global depression. Sub-Saharan Africa then became the focus for foreign development aid. With structures already in place, the World Bank and the IMF facilitated the movement of development funds, no longer required by Europe, to Africa. This was the start of foreign development aid to Africa, which has a history all of its own. This is discussed further below in terms of the political and economic influences of both the donor and recipient countries.

Colonial rule and the European economic hold over Africa would not last long. In 1941 (during WW2) the British Prime Minster, Winston Churchill and US President Roosevelt implemented the Atlantic Charter, which held that all people have the right to choose their own government. At the conclusion of the war, perhaps inspired by his visit in Gambia where he saw the conditions in which people were living in, Roosevelt insisted that the charter be amended to include colonies. This gave African elites and returning soldiers immediate hope for political reform.

The scramble out of Africa began after the Second World War. Decolonisation began in the 1950’s (for example, Libya in 1951) and continued through to the 1960’s. Whilst some Colonist rulers left quickly, others fought to stay in power. Mozambique achieved

independence in 1974 after a 10 year War of Independence with their Portuguese rulers. A bloody civil war followed soon after with democratic elections only held in 1994 (History of Mozambique, n.d.) leaving Mozambique as one of the poorest countries in the world. Some countries achieved independence as late as 1990 (Namibia from South Africa) (History of Africa, n.d.) South Africa held its first democratic election in 1994 following the end of apartheid in 1990 (Apartheid in South Africa, n.d.).

HISTORY OF FOREIGN AID IN SUB-SAHARAN AFRICA

Europe’s recovery from the Second World War, attributed largely to the Marshall Plan, resulted in foreign development aid filtering through to Africa. In Europe, short-term foreign aid had been for restoration (Moyo, 2009). The situation in Africa however was very different. Development programs in developing countries (then called the ‘Third World’) were based on the Idea of Progress (Arndt, as cited in Idea of Progress, n.d.), with the belief that this would help Africa gain economic success and reduce poverty. Aid has been in Sub-Saharan Africa for around 60 years. More than half a century cannot be considered a short-term strategy to solve the extremely complex problem of ongoing poverty.

Many countries in Sub-Saharan Africa moved swiftly from colonial rule and into the hands of sometimes benevolent leaders, but most often into unelected dictatorships. Despite the new independence, Europe and Britain wanted to maintain some control over their previous colonies to ensure their interests in the global markets and support in the Cold War (1947-1991). Foreign aid was a strategy implemented in the hope that poverty stricken countries receiving aid would align themselves with US, Britain and Europe against the communist Society Union (Cold War, n.d.; Easterly, 2006; Moyo, 2009).

In the 1960’s the focus of foreign aid was on the construction of large scale infrastructure such as dams, railways and roads; the logic being that these would have longer-term benefits (Moyo, 2009). By 1965 half of Africa’s states were independent with total FDA reaching approximately US$950 million (Moyo, 2009). In the 1970’s the Arab states’ oil embargo resulted in skyrocketing oil prices and the focus on foreign aid began to target poverty reduction (Moyo, 2009). Excess funds from oil exporters were deposited into international banks, which in turn were lent to developing countries. This led to high levels of debt for many African countries, which were experiencing high food prices, inflation and economic recession. Recipients such as Zambia saw poverty rise despite the provision of foreign aid.

Despite the high debts, no alarm bells rang with respect to the overall effectiveness of foreign aid. In the 1980’s, the solution was simply to restructure the debts of the borrower country, leaving them even worse off and increasingly dependent, with cumulative debts of US$1 trillion (Moyo, 2009). There were now more funds leaving Africa to repay the debt than FDA coming in. Corrupt leaders were rampant. Donors began to blame Africa for its poor governance and institutions. Thus the 1990’s saw a

shift towards FDA targeting good governance, believed by the development community to be a critical component to sustained economic growth.

CONTEMPORARY ECONOMIC AND POLITICAL FACTORS

In the 21st century, donor countries continue to have many vested interests in Sub-Sahara Africa. It is in their (collective) interest to ensure that poverty is significantly alleviated, as the huge gaps between rich and poor create conflict which can be directed at wealthy countries and potentially have an impact on global economies and security (Martin, 2007). The vested interests can overpower the more altruistic goal of reducing poverty. One study found that only three out of the nine largest donors allocated aid specifically for poverty reduction (Jones et al, as cited in Riddell, 2007).

Contemporary Economic Factors

Tied aid is official development aid where funds have been used to purchase goods or services from the donor country (Tied aid, n.d.). Untied aid is where funds have no geographic conditions for spending. There has been major criticism of tied aid and its effectiveness. This type of aid may booster the donor countries economy, but not the recipients. For example, mosquito nets to combat malaria (a major disease in many parts of Sub-Saharan Africa) would be made in the US and sent to Africa (at for example, US$4 each (Moyo, 2009), (missing close bracket) However for a fraction of the cost and, in addition, assisting the local economy, they could have been made in Africa. The local mosquito net maker is now out of the market and his family of perhaps 15 dependents, his staff and all their dependents are now out of work, and possibly back in poverty.

The OECD estimated that 41.7% of Official Development Assistance is untied (OECD, 2006). Whilst the reasons for tying aid are for the economic benefits of the donor country increasing its exports and for the perceived political standing for achieving this, the study found that tied funding had little impact on economic benefits, therefore negating any political leverage (Jempa, 1991). This may be because it is such a small part of the donor countries GDP. The cost to the recipient country is a far reduced foreign aid budget, with costs from purchasing in the donor country costing 50-100% more than in the recipient country (Riddell, 2007).

Until recently, tied funding was a more significant portion of aid to Africa. As recommended by the Paris Declaration (see ‘Discussion’ below) many countries, including the UK and Australia have significantly reduced their tied aid to the poorest countries (Clay, Geddes and Natali, 2009; Tied aid, n.d.). The United States and Japan, the largest providers of foreign aid, still ties 50% of their aid.

Although there has been recent success in reducing tied aid, it has been suggested that all ODA results in imbalance of exchange between Africa and donor countries (Maathai, 2009) and economic dependence for Sub-Saharan Africa (Moyo, 2009):

A large part of Sub-Saharan government budgets rely on foreign aid for approximately 50% of their budgetary spending (Andrews, 2009). African governments still pay nearly $20 billion a year in debt repayments for ODA (as concessional loans) (Moyo, 2009, March 21).

There are difficulties with countries being able to manage these large amounts of funding, sometimes needing external assistance to manage, direct and account for the spending.

The often unwanted foreign goods (often provided as aid) can saturate local markets (Andrews, 2009).

The large percentage of aid reduces the need for a high domestic revenue base through taxation, thus reducing the voice of Africans in having a voice in domestic politics (Easterly, 2006).

The reliance on foreign aid may further reduce the potential for economic growth and employment. Economic imbalance disempowers Sub-Saharan Africans to engage in advocacy for their own goals and ideas.

Statistics indicate that half of Sub-Saharan Africans live in poverty, with a small but growing middle class changing the group’s economic and social opportunities. These middle class incomes can skew statistics on poverty reduction through a higher GPD per capita. It is believed that this demonstrates economic potential and political stability to foreign investors (McKinsey, in Negin and Denning, 2011). This has changed the focus over the last 10 years from poverty reduction to opportunity and growth, which, in turn, has changed how foreign countries see Africa, and how Africans see themselves.

Potential markets for the exchange of goods remain on the economic and political agenda for donor countries. By assisting Sub-Saharan Africa achieve economic independence through foreign aid, the private sector of the donor countries position themselves as preferred trade partners as well as preferred tenderers for commissions and contracts (infrastructure, resource development) The UK’s Department for International Development (DFID) acknowledge their interest in less developed countries, stating that they are the Britain’s fastest growing export markets (Thornton et al). The United States (the largest provider of foreign aid) has legislated for their own interests (Riddell, 2007). Recently Australia has begun to give greater consideration to African markets (and foreign aid to Africa) as West Australia’s economy flourished (AusAID, 2010; Negin and Denning, 2011).

The global financial crisis (GFC) of 2007-2008, which started in the US and is considered to be the worst financial crisis since the Great Depression of the 1930’s triggered by the bursting of the US housing bubble, is having an impact on the security of funds to developing countries. The United States and other countries are spending trillions of dollars on bailouts and stimulus packages to save their own economies. Australia was one of the few countries who did not reduce its foreign aid after the GFC. However, a new Liberal government may see Australia reduce from a current level 0.37% of Gross National Income (GNI) to 0.35% in 2016-2017. This is significantly below Australia’s pre-GFC projected commitments to 0.5% GNI (Piccio, 2013), and the UN’s request that rich countries commit 0.7% to achieve the Millennium Development Goals (UN Millennium Project, n.d.).

From a donor perspective, there is pressure for the foreign aid to be spent (often in the millions) so it is often just allocated, with perhaps not enough checks and balances as to how and where the money is spent (Moyo, 2009). This greatly reduces any real accountability and creates unrealistic expectations regarding how funds are allocated and managed among recipients that may not be repeated.

Contemporary Political Factors

A donor country’s economic and political motivations are intrinsically linked to foreign aid. This includes diplomatic and military ties, international and domestic security and a responsibility to their constituents. There is also a perceived moral obligation for those who can to help people in poverty (Singer, 2009) but there is also a call for aid to be effective.

Foreign aid can be motivated by the perceived or actual need to strengthen diplomatic or military ties with a recipient country (Lancaster, cited in Aid, n.d.), including the provision of armaments, military training and logistics support. Foreign countries, concerned about domestic and international security, have backed various regimes throughout Sub-Saharan Africa since independence, often precipitating humanitarian crises (Meredith, 2005).

The events of September 11, 2001, and its aftermath have had a further profound effect on foreign aid, its global distribution and the leveraging of political servitude of the recipient countries. Counter-terrorism became a major influence in foreign development (US 2002 National Security Strategy), blurring the lines between aid for development and aid for national security. The United States is currently the largest contributor of aid, followed by the European Union (EU)) (ICAI, 2012). Approximately

one third of US foreign aid is allocated to countries considered a security risk (Wood, as cited in Riddell, 2007). This may increase in the near future with the Syrian crisis (USAID, n.d.).

Australia’s foreign aid is aligned with the government’s Foreign Affairs and Trade portfolio (along with security and prosperity of the Country and its citizens) (AusAID, n.d.). In the past, Australian aid has been focused specifically within the country’s immediate zone of influence in the Asia/Pacific region (Riddell, 2007; AusAID, n.d.). However, there is a growing trend towards the provision of aid to Africa. In 2007-2008 Australians raised AUD$280 million in private donations to non-government organisation (NGOs) working in Africa. The largest share of Australia’s official development aid (ODA) to Africa directed to Zimbabwe). Even though Australia is a small donor to Africa by international standards, (Negin and Denning, 2011) it highlights how development programs (funded through foreign aid) can be left vulnerable if donor countries change their priorities for aid.

Australia was not the only country to seek a positive change for Africa. Worldwide public pressure led the 31st G8 summit in 2005 (often known as the Gleneagles summit) to convene a separate meeting with the agenda including the lack of progress for the MDG’s and debt of many Sub-Saharan African countries to foreign countries (31st G8 summit, n.d.; Oxfam, 2005). A commitment to increased ODA was agreed upon, despite the belief at the time that this amount was still considered to be a shortfall. Whilst some debt relief occurred, it was only to some countries. The requested increase for foreign aid largely remains elusive.

Governments are ultimately responsible to their citizens. In a recent public survey addressing Australian aid (through AusAID), the government stated that its citizens supported foreign aid, but also wanted it to be both cost effective and effective in achieving its goals (Australian Government, 2011). Public support may need to be researched further, as studies show that there is support for aid, but it is not a high priority (Riddell, 2007). This suggests the same citizens don’t rank it highly enough to consider it a factor that would influence their vote. Support may or may not include government foreign aid, but rather sponsoring of established NGOs such as Red Cross and World Vision. It is further suggested that many of these citizens are unclear as to the purpose of foreign aid and whether it is effective. It is therefore difficult to determine if donor governments (or politicians seeking leadership) are strongly influenced by their public, or whether this is a fairly neutral strategy in terms of winning votes and keeping in favour with their constituents.

Donor countries also impact on the effectiveness of foreign development aid. The main hindrances are the corruption and political turmoil many countries face in the post-colonial era. Both Collier (2007) and Maarhai (2009) believe it is a tragedy for Africa that people put their trust in their post-colonial leaders, and that that trust was so often broken.

Many post-colonial leaders came to power through non-democratic means and ruled at best, via a single party system, and, at worst, under dictatorship. Leaders often came from low level administrative positions or military posts and did not possess the training or experience of governance. With monotonous regularity, democracy and diplomacy was subjugated by strong arm tactics and brutal repression. Such repressive

leadership invariably nurtured a culture of corruption and exploitation that resulted in the collapse of the country’s economic and administrative structures (Meredith, 2005).

As a result from the post-colonial leaders, poor governance and corruption are both major hindrances to aid effectiveness (Kauffman, 2007; Moyo, 2009). Funds, food, weapons and medical equipment may be stolen (if not by the leaders, then by the people in their government or other positions of power). Some funds are mismanaged, as there is not the skill to cope with large cash injections to the country’s budget (which can be up to 50% of the annual government expenditure).

Donor countries can also mismanage aid. There is pressure to spend allocated funds, with monies wasted on overpriced and sometimes unwanted goods and services. There may also be a lack of good accountability (Easterly, 2006; Riddell, 2007).

The lure of appropriating large amounts of aid may also motivate and increase the likelihood of coups (Collier, 2008; Meredith, 2005), typically resulting in the establishment of non-democratic regimes. Civil war is more likely to occur in countries with high poverty, being run by corrupt, non-democratic regimes. These wars not only cost countries millions of dollars to fund but in turn also to repair the resulting destruction to infrastructure and economies (Collier, 2007). The cost on the population is immeasurable, further perpetuating the cycle of poverty and suffering.

Since the 1990’s, foreign aid has been directed to countries with stronger democracies; and assisting to improve institutions, good legal frameworks and mitigate corrupt practices (Moyo, 2009). Whilst this change benefits selected recipient countries, many other countries with a great need for support are not assisted due to not meeting the funding criteria based on democracy and corruption grounds.

There is an often firmly held belief that democracy is a prerequisite for economic growth Moyo (2007). The rapid development (and subsequent reduction of poverty) in China, a single party socialist state, is a classic example that democracy is not required for economic growth. Moyo further discusses an insight by Przeworski et al (1996) who theorised that the higher the per capital income, the longer a democracy is likely to last.

Billboard by the ACC Party, South Africa

Further to the problems of poor governance and corruption, it is common knowledge in Sub-Saharan Africa that there is a lack of quality education in most of the region, which results in a low skill base for many of the people employed (Easterly, 2007). Those people who do have skills often leave their homelands for better wages and living conditions overseas (Riddell, 2007). Many people who are skilled in African countries who work in government or development (mostly funded by foreign aid) gain experience and often leave to work in the private sector (often financial services and the mining industries) or for positions overseas. This can also leave less skilled people to start up their own businesses that could potentially provide employment for others.

Furthermore, the bureaucracy and time it takes to get programs, whether they are non-profit or commercial enterprises may well put off potential investors (Moyo, 2009).

AID EFFECTIVENESS IN SUB-SAHARAN AFRICA

Sub-Saharan Africa is the second fastest growing region yet it also has the highest levels of poverty. Whilst there is hope poverty will decrease, it could suggest that economic growth does not always mean poverty levels will proportionally fall.

The main methods of measuring aid poverty (on a regional basis) are living on less than $1.25 per day and the Human Development Index (as discussed above). These will be examined through recent reports, followed by a discussion of their effectiveness as measures.

Is poverty being reduced in Sub-Saharan Africa?

The Millennium Development Goals Report (2012) reports that extreme poverty (people living on less than US$1.25 per day) in Sub-Saharan Africa has reduced from 56 per cent in 1990, to 47% in 2008. McGillivray, a Senior Research Fellow and Project Director from the World Institute for Development Economics (UN University) reports that the MDG of reducing extreme poverty by half in Sub-Saharan Africa from 1990 levels by 2015 is unlikely to be achieved, and suggests an alternative date as late as 2147 (McGillivray, n.d.). It could be argued that the MDGs were possibly not realistically achievable given the timeframe. McGillivray’s literature review finds that economic growth would be lower if not for foreign aid, arguing that poverty levels would also be higher. It is suggested that aid has not failed, but it could be more efficient.

A similar report by the Economic Commission for Africa, African Union Commission and African Development Bank (2013) and others (as referenced) discuss many of the difficulties in relation to the MDG’s that keep poverty levels high across all of Africa (not just Sub-Saharan Africa). They include:

1 Eradicating extreme poverty and hunger – some countries still lag behind so will probably not meet the goal by 2015. Sub-Saharan Africa had poverty rates of 56.5% of the population living on below $1.25 per day in 1990 and in 2010

reduced to 48.5%. The number of people increased from 289.7 million (1990) to 413.8 mission (2010). Whilst the percentage has decreased, the number of people living in poverty has increased, mostly due to population increases. Poverty is Africa is mostly rural, often up to three times higher than urban areas. (African Union Commission and African Development Bank; Ravallion, as cited in Economic Commission for Africa; 2013 World Bank, 2012).

2. Achieving universal primary education - children may be attending primary schools in higher numbers, but the quality of education is often poor, with teachers who are often untrained and on low wages, and large class sizes (often up to 100).

3. Promoting gender equality and empowering women - whilst women are becoming more empowered (through attending schools and holding important positions in government, they are still sometimes trapped in early marriage, a patriarchal family and low economic opportunities).

4. Reducing child mortality rates - generally many countries are reported to be on track, with the exception of Malawi. From 1990-2011 there is a reported drop in under-five mortality of 47%. This, however, still leaves many children, who still die, often from preventable diseases and chronic dehydration from lack of safe drinking water.

5. Improving maternal health – whilst there has been a reduced rate of maternal deaths from 0.74% in 1990 to 0.42% in 2010 (a 42% reduction), rates are still too high to achieve the MDG and vary across countries.

6. Combating HIV/AIDS, malaria and other diseases – this is perhaps where there has been most success with prevalence rates dropping from 5.9% in 2001 to 4.9% in 2011, but rates remain high (and difficult to accurately measure).

7. Ensuring environmental sustainability – not directly related to poverty, however, it is essential in an indirect way. C02 emissions and ozone depleting substances are in low levels but forest cover is an issue. Access to clean water and sanitation remain an issue, particularly in rural areas.

8. Developing a global partnership for development. This is an area of great concern as it has not yet occurred on a significant scale (Easterly, 2006; Pomerantz, 2004; Riddell, 2007).

The Summary Human Development Report 2013 (subtitled “The Rise of the South”) shows that on a global scale, many countries have increased their HDI, particularly those who have been able to participate in the global economy, with Sub-Saharan Africa still falling behind other regions (UNDP, 2013). The report discusses that the improvements have been due to good leadership for the private and social sectors, being able to actively participate in the global market economy and having improved health, education and infrastructures in place. It is also very difficult to attribute whether improvements in the HDI is a direct or even indirect result of foreign aid.

Despite the “Rise of the South”, Sub-Saharan Africa is not part of this. Statistics from the report show some startling figures of Sub-Saharan Africa, the lowest region for HDI compared to the second lowest region, South Asia. Sub-Saharan Africa has a life expectancy (at birth) of 54.9 years, (11 years less the second lowest region of South Asia) and their Gross National Income (GNI) per capita is $2010, 40% less than South Asia (UDP, 2013). Whilst this figures equates to $5.50 per day, (well above the UN measure of US$1.25 per day poverty line), Sub-Saharan Africa is far from ascending the Human Development Index. Interestingly, Sub-Saharan African poverty levels reported fell more significantly between 2005-2008 since levels were recorded, where levels had previously been increasing since 1981 (UNDP, 2012). The UNDP predict that there will still be a billion people living in extreme poverty by 2015, most living in Sub-Saharan Africa and Southern Asia.

The UK provides aid through DFIF, 16% being channelled through the EU to 28 countries. An independent review discusses the effectiveness of this aid (which includes case studies in Mozambique and Uganda) in reducing poverty (measured by household surveys) through general budget support to the recipient country’s government (ICAI, 2012). Using the World Bank’s measure of living on less than $1.25 per day, extreme poverty has reduced from 75% in 2003 to 60% in 2011 in Mozambique and in Uganda 57% in 2002 to 38% in 2011. Despite these encouraging statistics, increasing inequality (particularly in regional and urban-rural) areas is reported. The Mozambique government only fully achieved 50% of the 40 key targets on the national development plan, and 30% of target were partially met. Uganda achieved an average of 50-60% per year in meeting 100 targets. Long-term impact and sustainability of the overall development impacts (including poverty reduction) and plans to reduce aid are largely unplanned.

Aid to Sub-Saharan Africa decreased in the 1990’s, combined with lower levels of other foreign financial flows (such as direct foreign investment in comparison to other developing countries), suggesting that this may be why, at least in part, for higher levels of poverty (McGillivray, n.d.) Whilst McGillivray suggests that economic growth implies poverty reduction, it cannot be directly attributed to aid alone.

How effective are poverty measures?

In determining if aid is effective, it is essential to examine the effectiveness of how poverty is measured. The effectiveness Millennium Development Goals and The Human Development Index as measures of poverty will be examined as follows to gain further insight.

The Millennium Development Goals (MDG’s) are one of the major strategies and measures of poverty in developing countries, including Sub-Saharan Africa. There is concern about the legitimacy of the MDGs themselves. Attaran (2005) suggests that there are problems with knowing the levels of each measure (including poverty) prior to development programs, believing that the measures themselves are inadequate and flawed.

It is often reported that Africa will not reach the MDG targets by 2015. The Goals are believed to be unfair to Africa (Easterly, 2009). Easterly argues that poverty reduction is mostly measured by growth of ‘per capita income’ where income is increased above the poverty line. Where income is still below the poverty line but has actually increased is not measured at all. He further believes that a percentage change in poverty rates is not as preferable to the actual number of people, further evidenced in the report by the Economic Commission for Africa et al (2013) (as discussed above) where the percentage of people in poverty has decreased over time, but the number of people has increased.

Further, Easterly (2009) argues that lower levels of income distribution have more reduction than average higher incomes. Africa has the lowest per capita income in any region, therefore requires a higher level of mean growth to achieve the same percentage reduction of poverty. He contends that Africa will be viewed as a developmental failure, without recognising the actual successes, which he describes as “demoralising” to African leaders and those in the development field. This perception could reduce private investment in Africa, which is needed to generate much needed employment.

Frances Steward (Professor of Development Economics at the University of Oxford, and Director of the International Development Centre, appearing in the production 'Poor Us: an animated history' (Lewis, 2012) postulates that on a global scale, countries that have capitalism and a welfare state, and no civil wars leads to poverty reduction (Lewis, 2012) but qualifies this by stating that they all need to be present at the same time. Steward also believes that the wealthy don’t (effectively) help the poor, and only the poor can help the poor relieve poverty. In the same production, Thomas Pogge (Director of the Global Justice Program and Professor of Philosophy and International Affairs at Yale University) believes that all of today’s poverty is avoidable, and the global economic system is designed for the rich to get richer. The trickle down of wealth has not occurred.

In the UNDP “Rise of the South” report (referred to above), data is not available for all countries, including Somalia, which is not included in Sub-Saharan Africa’s statistics for this report, despite being in the region, where there is high levels of poverty. This would potentially be enough to skew the statistics.

The Human Development Index is often used to measure and classify a country’s development. Wolff and his colleagues report that there are errors in these measures that require attention (Wolff, Chong and Auffhammer, 2011). They report three types of errors which affect the validity of the measures, with 34% of countries being misclassified, including some in Sub-Saharan Africa. Generally, it measures individual countries but when adjusted, more countries are included, including Madagascar and Ghana (and though not strictly Sub-Saharan Africa, Sudan, except in UN statistics). The Multidimensional Poverty Index (introduced in 2010) may provide a more accurate source of data over time, along with the Inequality-adjusted and Gender Inequality Indices.

There are some anomalies in the data for measuring poverty and growth. South Africa is a middle-income country and it has the highest levels of inequality in the world with 50% of the black population living below the national poverty line as compared to 2% of the white population (Thornton et al, 2010). Whilst Thornton and his colleagues were referring to a Southern African program, the same can apply to all data, unless this

is factored into the calculations. The wealth of the white minority skews the figures of reported poverty. There is also a growing middle class in Sub-Saharan Africa, including non-white South Africans (Negin and Denning, 2011).

Neighbouring South Africa is Mozambique, a country that has access to seaports and minerals, with agriculture providing a third of its GDP and a livelihood for most people. Mozambique’s real GDP showed an average growth of 5.5% from 2005 to 2009, yet there are still high levels of poverty (Thornton et al, 2010). High levels of HIV/AIDS in men mean women and children are often responsible not just for water collection, but all roles, including caring for the ill.

In defence of these measures, it is difficult to gather data on incomes and poverty indicators, as many people in Sub-Saharan Africa are so remote and/or in much poverty may not even submit a tax return or be registered with their government. Household surveys are sometimes completed to gain data, but little information is publicly available on the number of people who complete these and how the information is gathered.

DISCUSSION

How has foreign aid effectiveness been improved?

The Paris Declaration and Accra Agenda for Action in 2005 is a key strategy developed by the OEDC’s Development Assistance Committee to provide specific strategies aimed at increasing the effectiveness of development aid (Aid Effectiveness, n.d., OECD, n.d., c). The five key principles include:

1. Ownership of strategies to improve poverty reduction.

2. Alignment of donor countries to these strategies and use local systems.

3. Harmonisation of donor countries to co-ordinate, simplify procedures and share information to avoid duplication.

4. Results are shifted to measured development outcomes.

5. Mutual accountability.

The Accra Agenda for Action 2008 aimed to refine the Paris Declaration, and included focusing on the three main areas for improvement, being ownership, inclusive partnerships and delivering results (Aid Effectiveness, n.d).

The Fourth High Level Forum on Aid Effectiveness held in Busan, Korea in 2011 further refine the commitments to the Paris Declaration (OECD, 2011) including:

1. Ownership of development priorities by developing countries with a focus on country specific solutions.

2. Results must eradicate poverty and reduce inequality (as well as sustainable development and enhancing the countries’ capacity with their own priorities.

3. Inclusive development partnerships, focusing on openness, trust and mutual respect.

4. Mutual transparency and accountability to both donor and recipient countries and their citizens.

Foreign aid is one of the major strategies to combat poverty across the globe, including Sub-Saharan Africa. There have been a number of strategies utilised to increase the effectiveness of official (foreign) development aid to improve outcomes for people in Sub-Saharan Africa living in poverty. These include shifting from a needs based program to a human rights focus, the untying of aid and The Paris Declaration and Accra Agenda.

A major paradigm shift has been in the UN’s recognition that poverty needs to be funded on the basic principles of equality, human rights (including extreme abuses) and inclusion in decision-making and development of programs rather than a needs basis (Riddell, 2007; United Nations, n.d., b;). One example is the United Nations Family Planning Association (UNFPA) whose work is now underpinned by the framework of people having the right to choice when to have children, and how many they have (UNFPA, 2012). It is anticipated that women who have less children experience less poverty, as they are more likely to gain an education and work, therefore providing for the children they may have.

The untying of aid is potentially a move in the right direction. Bilateral aid (aid from donor government to recipient government) is still reliant on reduced corruption and better governance in the recipient countries; and sound accountability in both the donor and recipient country.

The Paris Declaration and Accra Agenda for Action had made little progress by 2009. (Kaufmann, 2009). The Busan Forum has been reported as achieving little in terms of democratic ownership, transparency and facilitating an environment for civil society (Laubscher and Stockli, 2011). They report that some recipient countries are assuming greater responsibility but are generally failing to consult their citizens The European Centre for Development Policy Management describe that the commitments from Busan need to be translated into specific and measurable actions, and this takes donor countries time and skill to complete (ECDPM, 2012). Whilst commitments to The Paris Declaration, Accra Agenda and Busan Forum are voluntary and not legally binding, they offer hope, particularly if there was a greater commitment from donor and recipient countries.

One of the commitments from the Busan forum is the building of better relationships based on mutual trust between donor and recipient countries (on all levels), which is supported by development economics and academics as being important to aid effectiveness (Easterly, 2009; Pomerantz, 2004; Riddell, 2007). Both Alkire and Sonatos; and Easterly believe aid recipients should be more involved in the process of

determining programs. The OECD believes empowering people in poverty will have longer-term effects and should be included in all donor policies and practices (OECD, n.d., b.). People in poverty will often need to learn the skills of being empowered, such as self-advocacy and how organisations operate.

It is often argued that economic growth must precipitate poverty reduction. Alvi and Senbeta, (2012) argue that poverty can be reduced even if economic growth rates have not increased. Their investigations show that poverty had reduced in areas where they applied their alternative measures that controlled for average income and income distribution. They also support findings in a previous study (Beck et al, as cited in Alvi and Senbeta, 2012) that financial sector development increases incomes and cite Kenya and Zambia as examples. They also found that multilateral aid is more effective than bilateral aid. This is perhaps one of the strongest studies that supports evidence for foreign aid, however, it was not in a bubble without other strategies such as financial sector development also decreased poverty. Whilst this does not measure Sub-Saharan Africa specifically, it is important to note an alternative.

As discussed, the G8 called for an increase in aid at the Gleneagles summit in 2005. A number of studies that suggest that higher levels of aid do not necessarily mean higher growth (or reduced poverty) as effects start to reduce relatively where aid levels are between 15-45 per cent of the GDP (McGillivray, n.d.).

Another frequently proposed solution to economic growth in developing countries is free global trade, often assisted by foreign development aid. The idea is promoted that joining the global market will assist regions like Sub-Saharan Africa to climb the ladder of economic development, hence reducing poverty (Moyo, 2009, Sachs, 2005). There are, however, often strings attached that benefit the donor country as much aid (often in the form of loans) is subject to conditions that may not always be advantageous to the recipient country.

Chang, a Korean economist challenges the notion that free global trade practices will assist Sub-Saharan Africa to grow economically whilst significantly decreasing the levels of poverty (Chang, 2007). He supports Fredrich List’s notion of the wealthy countries ‘kicking away the ladder’ by promoting free global trade as the answer to growth (and poverty reduction). He describes protectionist economics policies such a high import taxes and banning of certain trades and imports that assisted major economies such as England, US and others to thrive.

Chang (2007) argues that the mercantile system is often forgotten when discussing the need for developing countries to be in a better position to participate fully in the global economy to increase economic growth and reduce poverty, suggesting that globalisation may not be the answer for Sub-Saharan Africa.

The protectionist strategies can take time to fully achieve success (Chang, 2007). He also likens this to South Korea’s success from becoming one of the poorest countries in the world, to one of greater wealth, with per capital income increasing 14 times in approximately 40 years. Whilst these strategies may seem harsh at the time, (for example, long hours of work and harsh working conditions, similar to the Chinese ‘sweatshops’ of today) his arguments are hard to ignore.

Perhaps we should look more to countries like China and India to learn how they have reduced poverty. Even countries like Mauritius, Ghana, Algeria, Botswana, and Namibia in Africa and Malaysia in Asia have increased their HDI.

In his book ‘Emerging Africa’ Steve Radelet (2010) cites 17 Sub-Sahara African countries that have achieved reasonably stable economic growth, improved democracy and leadership, along with reduced poverty in the last 15 years and another six that are following closely. Some of the countries that receive the most aid (including Botswana, Ghana, Rwanda and Tanzania) are the ones that have made good economic and social progress, without overly relying on the extractive resource industries, such as coal and gas. Whilst it is impossible to attribute these successes to aid alone, Radelet suggests that aid (along with strong economic strategies) plays an important part in development, which ultimately may reduce poverty.

CONCLUSION

“Give a man a fish, and you feed him for a day….

Teach a man to fish and you feed him for a lifetime.”

Chinese Proverb

Over the past 60 years, foreign aid has failed to significantly reduce poverty in Sub-Saharan Africa. The historical, economic and political influences explored in this report have clearly made substantial impacts on foreign aid and its effectiveness in reducing poverty. Whether or not it is in the best interests of the people of Sub-Saharan Africa to remain reliant giving of aid or whether aid should be stopped in the near future is cause for wide debate. We cannot change the past, but must look to the future with a deeper understanding of foreign aid.

There is no panacea; no simple answers to such a complex problem. The question to ask now is whether aid should continue, and if so, how can it be improved for better outcomes? Many current and future strategies could contribute towards the reduction

of poverty. This report demonstrates that ‘business as usual’ is no longer the best option.

Plans to reduce foreign aid may be a long-term goal. Withdrawal of development aid could be the ultimate aim as Sub-Saharan Africa gains independence from aidfrom abroad however this seems unlikely as the current provision of aid is not short-term focused, and no plans are evident to reduce aid over time. The dependency on foreign aid for those who receive it is also worthy of serious consideration. Regardless, it is important to remember the Latin phrase “Primum non nocere”, a fundamental principle when considering interventions, that first, we should do no harm.

Rightly or wrongly, the most likely scenario is that foreign aid will continue. The agencies and organisations responsible for foreign aid need to be continually challenged and evaluated by the global community. New strategies for poverty reduction need to be developed, with successful strategies clearly identified, replicated or adapted. We can as a global society engage in the issue of foreign aid effectiveness. We can speak out and seek solutions that empower not only Sub-Saharan Africans, but also those who live in poverty all over the planet. This is one of the many challenges we are faced with in the 21st century.

BIBLIOGRAPHY

31st G8 summit (n.d.). In Wikipedia. Retrieved October 19, 2013 from http://en.wikipedia.org/wiki/31st_G8_summit

Aid effectiveness (n.d.) In Wikipedia. Retrieved September 15, 2013 from http://en.wikipedia.org/wiki/Aid_effectiveness

Alkire and Sonatos (2009) Poverty and Inequality Measurement. In Deneulin and Severine (Eds). An Introduction to the Human Development and Capability Approach: Freedom and Agency. (pp. 121-161). Retrieved September 14, 2013 from The International Development Research Centre Digital Library at http://idl-bnc.idrc.ca/dspace/bitstream/10625/40248/1/128806.pdf

Alvi, E. and Senbeta, A (2012) Does Foreign Aid Reduce Poverty? Journal of International Development, Vol. 24. (pp 955-976). Retrieved October 20, 2013 through UWA library, available from http://onlinelibrary.wiley.com/doi/10.1002/jid.1790/full

Andrews, N. (2009) Foreign aid and development in Africa: What the literature says and what the reality is. In Journal of African Studies and Development Vol. 1 (10 pp. 008-015). Retrieved October 23, 2013 from

http://www.academia.edu/202805/Foreign_aid_and_development_in_Africa_What_the_literature_says_and_what_the_reality_is

Attaran, A. (2005) An Immeasurable Crisis? A Criticism of the Millennium Development Goals and Why They Cannot Be Measured. In PLoS Medicine, Vol. 2, Issue 10, e138. Retrieved 14/9/2013 from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1201695/http://www.plosmedicine.org/article/fetchObject.action?uri=info%3Adoi%2F10.1371%2Fjournal.pmed.0020318&representation=PDF

AusAID (2010). Looking West: Australian’s Strategic approach to aid in Africa 2011 – 2015. Retrieved October 25, 2013 from http://www.ausaid.gov.au/Publications/Documents/101224%20-

%20Australias%20approach%20to%20aid%20in%20Africa%20-%20Dec%202010.pdf

AusAID (n.d.). About AusAID. Retrieved October 25, 2013 from http://www.ausaid.gov.au/about/Pages/default.aspx

Australian Government (2011) Independent Review of Aid Effectiveness (2011). Retrieved September 10, 2013 from http://www.aidreview.gov.au/publications/aidreview-execsummary.pdf

Cold War (n.d.) In Wikipedia. Retrieved September 14, 2013 from http://en.wikipedia.org/wiki/Cold_War

Collier, P. (2007). The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It. Oxford University Press, United Kingdom.

Chang, H (2007) Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity. Random House, UK.

Charity [practice]( n.d.) In Wikipedia. Retrieved September 22, 2013 from http://en.wikipedia.org/wiki/Charity_(practice)

Clay, E., Geddes, M. and Natali, L. (2009) Untying aid: Is it working? An Evaluation of the Implementation of the Paris Declaration and of the 2001 DAC Recommendation of Untying ODA to the LDC’s, Copenhagen. Danish Institute for International Studies. Retrieved September 20, 2013 from http://www.oecd.org/development/evaluation/dcdndep/44375975.pdf

Development aid. (n.d.) In Wikipedia. Retrieved August 30, 2013, from http://en.wikipedia.org/wiki/Development_aid

Easterly, W. (2006). The White Man’s Burden. UK: Oxford University Press.

Easterly, W. (2009). How the Millennium Development goals are Unfair to Africa. In World Development, Vol. 27, No. 1, pp.26-35. Retrieved October 7, 2013 http://williameasterly.files.wordpress.com/2010/08/56_easterly_howthemdgareunfairto

africa_prp.pdf

ECDPM (2012) Translating Busan and the EU Agenda for Change into practice: Emerging trends and operational challenges. Briefing Note No. 36. Retrieved September 20, 2013 from http://www.ecdpm.org/Web_ECDPM/Web/Content/Download.nsf/0/1B5BD2D37CA6

AB60C12579D000360E7C/$FILE/36%20-

%20Briefing%20note%20Busan%20Final.pdf

Economic Commission for Africa, African Union Commission, African Development Bank (2013) Assessing Progress in Africa towards the Millennium Development Goals. MDG Report 2013. Retrieved October 6, 2013 from http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Millennium%20

Development%20Goals%20(MDGs)%20Report%202013.pdf

Gordon, D. (2005). Indicators of Poverty and Hunger. Paper presented at the Expert Group Meeting on Youth Development Indicators, United Nations. Retrieved from August 30, 2013 from http://www.un.org/esa/socdev/unyin/documents/ydiDavidGordon_poverty.pdf

History of Africa (n.d.) in Wikipedia. Retrieved September 7, 2013 from http://en.wikipedia.org/wiki/History_of_agriculture

History of Mozambique (n.d.). In Wikipedia. Retrieved September 8, 2013 from http://en.wikipedia.org/wiki/History_of_Mozambique

Human Poverty Index (n.d.) In Wikipedia. Retrieved September 15, 2013 from http://en.wikipedia.org/wiki/Human_Poverty_Index

ICAI (2012) DFID’s Oversight of the EU’s Aid to Low-Income Countries. Retrieved from http://icai.independent.gov.uk/wp-content/uploads/2012/12/ICAI-EU-report-061212-FINAL.pdf

Idea of Progress (n.d.) In Wikipedia. Retrieved September 5, 2013 from

http://en.wikipedia.org/wiki/Idea_of_Progress

Jempa, C (1991) The Tying of Aid. Retrieved from http://www.oecd.org/development/pgd/29412505.pdf

Kaufmann D. (2009) Aid Effectiveness and Governance: The Good, the Bad and the Ugly. In Development Outreach, World Bank Institute, February 2009. Retrieved September 10, 2013 from http://siteresources.worldbank.org/EXTWBIGOVANTCOR/Resources/kaufmann-corrected.pdf

Laubscher, M. and Stockli, B. (2011, October 20) Busan: OECD veering in the wrong direction. Retrieved September 20, 2013 from http://www.alliancesud.ch/en/policy/aid/busan-high-level-meeting

Lewis, B. (Director). (2012). Poor Us: an animated history – Why Poverty? Retrieved September 22, 2013 from http://www.whypoverty.net/en/all-about/poor-us/

Maathai, W. (2009) The Challenge for Africa. UK: Random House

McGillivray, M. (n.d.). Is Aid Effective? Draft. Retrieved October 13, 2013 from http://www.stoparmut2015.ch/fileadmin/user_upload/dateien/Hintergrund/Armutsbekaempfung/Is_aid_effecitve.pdf

Mercantilism. (n.d.). In Wikipedia. Retrieved October 19, 2013 from http://en.wikipedia.org/wiki/Mercantilism

Meredith, M. (2005). The State of Africa. UK: Simon and Schuster.

Millennium Development Goals (n.d.) In Wikipedia. Retrieved September 14, 2013 from http://en.wikipedia.org/wiki/Millennium_Development_Goals

Moyo, D. (2009) Dead Aid: Why Aid is Not Working and How There is Another Way for Africa. UK: Penguin Group.

Moyo, D. (2009, March 21). Why Foreign Aid is Hurting Africa. The Wall Street Journal. Retrieved October 6, 2013 from http://online.wsj.com/news/articles/SB123758895999200083

Multidimensional Poverty Index (n.d.). In Wikipedia. Retrieved October 22, 2013 from http://en.wikipedia.org/wiki/Multidimensional_Poverty_Index

Negin, J. and Glenn, D. (2011) Study of Australia’s approach to aid in Africa. Commissioned study as part of the Independent Review of Aid Effectiveness. Retrieved September 15, 2013 from http://www.aidreview.gov.au/publications/study-

africa.pdf

OECD (2006) Aid Effectiveness: Three Good Reasons Why the Paris Declaration Will Make a Difference. In Development Co-operation Report 2005: Efforts and Policies of the Members of Development Assistance Committee. OECD Publishing. Retrieved from http://www.oecd-ilibrary.org/docserver/download/4306011ec004.pdf?expires=1377855310&id=id&accname=guest&checksum=A660D63C50B72B65CEFD5D7D56137339

OECD (n.d., a). In Wikipedia. Retrieved September 15, 2013 from http://en.wikipedia.org/wiki/OECD

OECD (n.d., b.) The Role of Empowerment for Poverty Reduction: Policy Statement. Retrieved September 15, 2013 from http://www.oecd.org/dac/povertyreduction/reducingpovertythroughempowerment.htm

OECD (n.d., c) Aid Effectiveness: Paris Declaration and Accra Agenda for Action.

Retrieved September 15, 2013 from

http://www.oecd.org/dac/effectiveness/parisdeclarationandaccraagendaforaction.htm#Paris

OECD (2011) Busan Partnership for Effective Development Co-operation. Retrieved

September 14, 2013 from http://www.oecd.org/dac/effectiveness/49650209.pdf

Official development assistance (n.d.). In Wikipedia. Retrieved August 30, 2013 from http://en.wikipedia.org/wiki/Official_development_assistance

Oxfam (2005) Gleneagles: what really happened at the G8 summit? Oxfam Briefing Note. Retrieved October 19, 2013 from http://www.oxfam.org/sites/www.oxfam.org/files/glen_0.pdf

Pakenham, T. (1991) The Scramble for Africa. UK: Butler and Tanner

Piccio, L. (2013, September 9). Under new management, Australia’s aid program set for more modest course. Devex. Retrieved October 25, from https://www.devex.com/en/news/under-new-management-australia-s-aid-program-set-for-more-modest-course/81767

Pomerantz, P. (2004). Aid Effectiveness in Africa: Developing Trust Between Donors and Governments. Maryland USA: Lexington Books.

Poverty (n.d.) In Wikipedia. Retrieved August 30, 2013 from http://en.wikipedia.org/wiki/Poverty

Poverty in Millennium Goals United Nations (n.d.). Retrieved August 30, 2013 from http://www.un.org/millenniumgoals/

Ravallion, M., Chen, S. and Sangruala, P. (2009) Dollar a Day Revisited. In The World Bank Economic Review, Vol. 23, No.2, PP 163-184. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/4499/wber_23_2_163.pdf?sequence=1

Riddell, R. (2007) Does Foreign Aid Really Work? UK: Oxford University Press

Rwabutomize, A. (2008). Examining the Impact on Foreign Aid on Economic Growth in Sub-Saharan Africa (Abstract). Retrieved October 6, 2013 from http://unpan1.un.org/intradoc/groups/public/documents/idep/unpan032751.pdf

Sachs, J. (2005) The End of Poverty: How We Can Make it Happen in Our Lifetime. UK: Penguin Books.

Sahel (n.d.). In Wikipedia. Retrieved September 1, 2013 from http://en.wikipedia.org/wiki/Sahel

Scramble for Africa (n.d.). In Wikipedia. Retrieved September 7, 2013 from http://en.wikipedia.org/wiki/Scramble_for_Africa

Second World War (n.d.). In Wikipedia. Retrieved on September 8, 2013 from http://en.wikipedia.org/wiki/World_War_II

Singer, P. (2009). The Life You Can Save: Acting now to end world poverty. Melbourne:

Text Publishing.

Slavery in Africa (n.d.). In Wikipedia. Retrieved September 7, 2013 from

http://en.wikipedia.org/wiki/African_slave_trade

Social Security Association (n.d.) National Wage Index. Retrieved August 30, 2013 from http://www.ssa.gov/OACT/COLA/AWI.html

Sub-Saharan Africa (n.d.). In Wikipedia. Retrieved September 1, 2013 from http://en.wikipedia.org/wiki/Sub-Saharan_Africa

The Industrial Revolution (n.d.) In Wikipedia. Retrieved September 1, 2013 from http://en.wikipedia.org/wiki/Industrial_Revolution

Thornton, P., Albertyn, C., Bertelsmann-Scott, T. Vaillant C. and Vickery C. (2010) Department for International Development: Southern Africa Program Evaluation 2004-2009. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/67682/cnty-prog-eval-sthn-afr-2004-09.pdf

Tied aid (n.d.) In Wikipedia. Retrieved August 30, 2013 from http://en.wikipedia.org/wiki/Tied_aid

The United States (n.d.) In Wikipedia. Retrieved October 19, 2013 from http://en.wikipedia.org/wiki/Economic_history_of_the_United_States

United Nations (n.d., a) Background: We Can End Poverty. Retrieved September 14, 2013 from http://www.un.org/millenniumgoals/bkgd.shtml

United Nations (n.d.; b) Poverty Reduction. Retrieved September 15, 2013 from http://www.undp.org/content/undp/en/home/ourwork/povertyreduction/overview/

United Nations (2008) Press Release: Millennium Development Goals Report 2008. Retrieved from http://www.un.org/millenniumgoals/pdf/Sub-Saharan%20Africa.pdf

United Nations (2011) The Millennium Development Goals Report 2011. Retrieved from http://www.un.org/millenniumgoals/MDG2011_SSA_EN.pdf

United Nations (2012) The Millennium Development Goals Report 2012. Retrieved September 20, 2013 from http://mdgs.un.org/unsd/mdg/Resources/Static/Products/Progress2012/English2012.pdf

UNDP (2013) Human Development Report 2013. Retrieved September 14, 2013 from http://www.undp.org/content/dam/undp/library/corporate/HDR/2013GlobalHDR/English/HDR2013%20Report%20English.pdf

UNDP (n.d.) Human Development Reports – United Nations Development Program. Retrieved September 15, 2013 from http://hdr.undp.org/en/statistics/indices/hpi/

UN Office of the Special Adviser on Africa (2010) Aid to Africa Policy brief no. 1 – October 2010. Retrieved October 6, 2013 from http://www.un.org/africa/osaa/reports/2010_Aidbrief.pdf

UN Millennium Project (n.d.) The 0.7% target: An in-depth look. Retrieved October 25, 2013 from http://www.unmillenniumproject.org/press/07.htm

UNFPA (2012) State of World Population 2012. By Choice, Not by Chance: Family Planning, Human Rights and Development. Retrieved October 25, 2013 from http://www.unfpa.org/webdav/site/global/shared/swp/2012/EN_SWOP2012_Report.pdf

USAID (n.d.) Syria. Retrieved October 25, 2013 from http://www.usaid.gov.crisis/syria

Wolf, H., Chong, H. and Auffhammer, M. (2011). Classification, Detection and Consequences of Data Error: Evidence from the Human Development Index. The Economic Journal, 121, pp 843-870. Oxford, UK: Blackwell Publishing.

World Bank (n.d.) In World Bank Data Profile. Retrieved September 1, 2013 from http://ddp-ext.worldbank.org/ext/ddpreports/ViewSharedReport?&CF=&REPORT_ID=9147&REQUEST_TYPE=VIEWADVANCED&HF=N/CPProfile.asp&WSP=N

The inspiration for this project same from reading Dambisa Moyo’s book “Dead Aid”, which I found on sale for MAPS, a local Maputo charity for animal welfare at the Just Café, a social enterprise that feeds it’s net profits back into local community initiatives, such as the orphanage for girls with HIV/Aids and training rural men, but mostly women to be doctors. This is dedicated to Danny, the owner of Just Café, the others like him all over the globe, and the people of Africa.