Finding new ways to give aid

My involvement in aid of a variety of kinds goes back to the years immediately after World War II, with UNRRA and post-UNRRA Relief, the Point Four Programs, the Colombo Plan, Marshall Aid, UNCTAD, World Food Program, UNIDO and so on and on - and on.

We can divide aid into two broad categories:

1. Emergency aid - essential to prevent threats to life right now; and
2. longer-term aid, intended to enable the recipients to build up their capacity to produce for themselves - and deal with emergencies as they arise.

Though not given as swiftly and generously as it often should be, emergency aid is a must if we are to embrace reasonably humanitarian principles and practices. We should not let our fellow human beings - especially vulnerable women and children - starve, die from treatable illnesses, or suffer painful and humiliating conditions of living if we can prevent it.

However, longer-term aid is equally essential if we are to prevent chronic suffering and or the recurrence of a more or less regular cycle of emergency need. Unless we can dramatically lift the productive capacity of some areas, they will always contrast with the relative prosperity, wealth and security of societies such as those in Europe, North America, Australia, New Zealand and Japan. In some ways poverty and inequality diverge: but both, at least in their more extreme and humiliating forms, are to be avoided if we are to be able to look towards reasonably stable international political, economic and strategic security.

In this context, it is vital that we be more fully aware of the almost miraculous progress in productive capacity and living levels that have occurred in the "Asian Tiger" economies since the 1970s. Progress of a similar kind - a progress which is even more startling because of the size of the communities involved - is now being made by China and India.

The contrast between these "Tiger" economies and the African economies over the same period, and in what have appeared to be the same world trading conditions, is so striking that we must search vigorously for the causes. If we can accurately identify those causes we might be close to finding the formula for launching the African and other "least developed" economies on the same growth path.

My experience of Africa consists mainly of service as Australian High Commissioner in Nigeria, a post which also took in Sierra Leone and those countries from Benin in the northwest to the Democratic Republic of the Congo in the southeast. I made extensive tours in Africa, the longest covering, not only West African countries, but also Ethiopia, Kenya, Tanzania, Zambia and Mauritius.

Over the years (and it is around 40 years since independence for most African countries) substantial emergency and long-term aid has gone to Africa, delivered under both bilateral and multilateral programs. Emergency aid has tended to be as repetitive in scale and scope as the emergencies. Ethiopia needed emergency aid 20 years ago and needs emergency aid today. Niger, in or on the edge of the Sahara, has always been a candidate for widespread misery and starvation. Its plight today can be no real surprise and that plight will be repeated unless we find a way of removing its fundamental causes in the aid that we provide.

In all of these cases, we must ask: what should we do to make the country or region self-sustaining over the long haul and self-sustaining at a level of living that, in the 21st century, we have come to regard as acceptable or at least tolerable?

Long-term aid, bilateral or multilateral, has had little effect in most of the less developed countries. Agriculture has stagnated or declined, secondary industry has shown little development, no matter how large and persistent the capital and technical assistance. Exploitation of often huge and valuable natural resources - oil, diamonds and the rest - has brought little benefit to the general population, nor has it brought sustained, diversified growth to the economy. Broadly, those resources have been squandered to the advantage of foreigners, speculators and a diversified group of political opportunists and warlords.

Overall, most African countries have probably received less long-term, fixed-capital aid than many countries elsewhere; but there is little convincing evidence that more aid of this kind would have had much more beneficial effect anyway. For example, an international organisation like UNIDO (United Nations Industrial Development Organisation) seems to have had a negligible impact in developing manufacturing in the African countries, despite its efforts over some 40 years. The same may be said of the International Monetary Fund and the World Bank, although these two institutions have helped to establish some infrastructure - not always in ways most helpful to the recipient country.

Can we expect anything more of the aid which is now proposed? Can our hopes be higher for the alleged expansion and modest diversification of aid which is now proposed?

The short answer is that, if it is no different from past aid, is the odds are it will be no more effective than past aid.

The evidence is that cancellation of debt will, in itself, have negligible impact on expansion of fixed-capital investment which is the key to sustainable, long-term growth. The same is true of relaxation of restrictions on the trade of the least-developed countries. Those restrictions, including subsidies, should be removed: but, in itself, the increase in foreign-exchange revenues will not be enough to affect economic development and growth dramatically. And, in any case, those revenues will need to be applied in ways distinct from those of the past if more beneficial results are to be achieved. We must again bear in mind the ways in which revenues from oil and, for example, diamonds, have been squandered.

None of that means we should not offer relief; nor does it mean the kind of emergency aid proposed by Bob Geldof and Bono should not be extended and expanded. On the contrary, it should and our continuing awareness of the desperate need of the people living in poverty should provide a stimulus for us to try constantly to find longer-term and more satisfying solutions to the problems of chronic or long-term poverty everywhere.

We must remember that the problems of poverty are not confined to developing countries. We have substantial and widespread poverty in the world's richest countries. We have inequalities which are unacceptable or should be unacceptable to all societies, rich or poor. We have instabilities too - and speculative and corrupt practices - which are unacceptable. Those instabilities and practices afflict all countries, everywhere, the richest as well as the poorest.

Here may indeed lie a key to the solution of the problem of poverty in the poorest countries. We in the rich countries can resolve our own problems by resolving the problems of the poorest countries at the same time as we ameliorate the misery of the poor in our own countries whom we have neglected for far too long. The two can and should go together.

Let us go back for a moment to the years immediately after World War II. After the Great Depression of the 1930s and World War II, we were determined to construct a postwar world society that avoided both economic depression and armed conflict. At the multilateral level, we created the United Nations with economic and social responsibilities as well as responsibilities for world peace. We set up such organisations as an array of regional and technical commissions within the framework of the United Nations to report through an Economic and Social Council to the General Assembly of the United Nations. We created a Food and Agriculture Organisation, The Bretton Woods twins - the International Monetary Fund and the World Bank - an International Labour Office, a General Agreement on Tariffs and Trade. These and many others flourished in the years between 1945 and 1970 but have sadly languished since.

We can eliminate poverty everywhere. People as different as former President Bill Clinton and Jane Goodall have assured us not only that we should but that we can do it in a reasonable period of time. I too believe we can.

But we will need to change the policies we have adopted over the last 30 years. Those policies have emphasised reliance on the "free" market and the private sector. They have advocated reduction of the role of government and public investment. They have advocated a "freedom" in economic policies that guarantees power and privilege for the relatively few and instability, inequality and or poverty for most of us.

As we learned in the decades before World War II, a "perfect" market economy can never deliver economic stability and full employment, except for relatively brief moments. Economic stability and full employment with high levels of growth and innovation can be delivered only by a mixed economy, that is, one in which public participation in the economy is substantial, imaginative and energetic.

That does not mean a centrally-planned economy. It means a mixed economy in which we avoid the inadequacies of both the centrally-planned economies and the present so-called "free" market economies.

It means the widespread adoption of policies, similar to those adopted between 1945 and 1970, by means of which we can resume our conquest of poverty, inequality and social and political instability everywhere in the world. Without it, we will never have reliable, persistent full employment and relatively equal opportunity, we will never have well-founded peace and peaceful change and we will never have, in fulfillment of our universal human aspirations, a spontaneous co-operative resumption of such enterprises as the conquest of space. Without it, we may never again land on the moon, whether it be an actual moon landing or a satisfaction of our human aspirations in other visionary ways, such as the conquest of poverty everywhere on our own planet Earth.

Those who would like to find a design - for a practical and practicable process for the elimination of poverty - might like to visit Victory Over Want.

VOW suggests that governments have failed to address problems of world poverty and that a democratic initiative, outside the frontiers of present governments and established international institutions, is required.

That initiative should not be undertaken by the rich only, to minister patronisingly to the needs of the poor. It should be a combined effort by all countries, all regions, all races, all religions. It should be an investigation, an enquiry and a co-operative effort by people of all political persuasions, driven by solving not only the problems of others but, essentially, the problems of every one of us. The effort should be driven by the need to find peace and, even beyond that, to devise means of achieving and maintaining peaceful change.

VOW does not advocate a helter-skelter, revolutionary overthrow of our economic, social and political systems. Instead, it advocates the rational application of the knowledge we have gathered - scientific and other - to create a world society that is progressive and peace-loving and that is free of poverty and the grossest of the inequalities that beset us now.

The task may be difficult and may seem forbidding to many but we can certainly manage it, if we have the will and the preparedness to make those changes that will sustain us, not only as individuals or societies but even as a species. It is what we must do if we are to ensure that we will be capable of survival, in the years and through the generations ahead.