Are the Aid Donors Un-Developing Ethiopia?

Samuel Lowenberg has an article in the Lancet:

The World Bank, the US Agency for International Development (USAID), and the UK's Department for International Development (DFID) have consistently failed to act on allegations of human rights abuses in Ethiopia, including ones that are tied to their aid programmes, according to new reports...

The reports raise troubling questions over alleged abuses—including beatings, rape, and murder—connected to the government's villagisation programme...

The report by the Oakland Institute documents how officials from USAID and DFID, who were investigating claims of abuse, heard first-hand accounts from villagers recounting brutal treatment by Ethiopian authorities under the villagisation programme. But even after these reports the two agencies failed to act.

One renegade former World Bank economist comments:

In view of the long-running problems documented in Ethiopia, “the impunity of the donors astonishes me”.... Human rights are essential to development, so when a foreign donor finances a government that represses these rights, it does not help a country develop, it sets it back, he says.

Please read the whole article, it is essential reading for anyone who cares about development.

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Save the Poor Beltway Bandits!

By William Easterly and Laura Freschi It is a rare day that we former Aid Watchers congratulate the US Agency for International Development on self-imposed changes that will actually help aid benefit the poor.

Today is not that day.

That day was February 6, when USAID changed its own rules to allow itself flexibility to buy more goods and services locally. Buying and contracting locally, rather than shipping goods from the US and contracting services through American companies, can be a cheaper and more efficient use of US aid dollars.  It can also help local economies thrive, and strengthen small businesses, local governments, and NGOs.

USAID plans to increase its funds spent through local actors to 30 percent by 2015, from 11 percent in 2011. Huzzah. This small but promising change means that hundreds of local nonprofits will no longer have to go through contractor middlemen. It means that where public financial management systems are strong and representative enough, more local governments can be helped with direct support rather than through experts employed by American contractors. It also means that the American companies (the so-called “Beltway Bandits”) that earn hundreds of millions of dollars in contracts each year from USAID stand to lose a little.

Naturally, these firms have accepted the prospect of this loss in revenue with equanimity, acknowledging that the reforms will improve outcomes for the proper beneficiaries of aid, and have set about adapting their business model to the new funding environment.

Haha, that was a joke. They’ve actually gone and hired a major Washington lobbying firm to kill the reforms in Congress.  Joining forces as the Professional Services Council and the public-facing Coalition of International Development Companies (from the website: “Did You Know…that funding through international development companies offers superior accountability and transparency?”) they have employed the Podesta Group, which, according to lobbying disclosure forms, has been hard at work “promoting the work of international development companies” in Congress at PSC’s behest.

And the Podesta Group has delivered: House Oversight and Government Reform Committee Chairman Darrell Issa (R-California) has told USAID he will seek to block these reforms, just in time for the markup of the international affairs budget beginning next week.

“This agency is no longer satisfied with writing big checks to big contractors and calling it development,” thundered USAID head Raj Shah in a speech in DC last year. The Beltway Bandits and their lobbyists only want him to take out the words “no longer” and then utter the remaining sentence.

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No Aid for Repressive Tyrants

We … call on Secretary of State Hillary Clinton and America’s Western allies to publicly repudiate Ethiopia’s efforts to use terrorism laws to silence political dissent. We also urge the U.S. to ensure that our more than $600 million in aid to Ethiopia is not used to foster repression.

This is the call to action from a letter published in the New York Review of Books this month.

We at DRI are inspired by the courage of Eskinder Nega, an Ethiopian journalist, newspaper publisher, and dissident arrested on September 14th after writing a blog post demanding freedom of expression and an end to torture in Ethiopian prisons. Despite previous arrests, both Eskinder and his wife, Serkalem Fasil, have chosen to remain in Ethiopia and continue their work.

While we don't want to meddle in other countries' politics, we do want to speak out against aid that supports rights-violating regimes, in solidarity with Ethiopian citizens who are simply asking to exercise their own civil liberties.

From 2005, when Eskinder Nega was first imprisoned in the aftermath of Ethiopia’s parliamentary elections marred with rigging and violence, to the present, international aid to Ethiopia has more than doubled to well over $4 billion. The three largest donors are the World Bank, the United States, and the United Kingdom.

Although they acknowledge “concerns” about governance and the protection of basic human rights, aid agencies continue to increase aid flows, praising the Ethiopian regime for high national growth rates and improvements on some health and poverty metrics. Even if not entirely reliable, these figures allow Ethiopian Prime Minister Meles to capitalize on The Myth of the Benevolent Autocrat, under which a “strong leader” (in the tradition to Lee-Kwan Yew, Deng Xiaoping, and even Paul Kagame) is given undue credit for a period of high growth, and excused for whatever human rights abuses and press freedom repression was deemed necessary in the pursuit of economic growth. Unfortunately for Meles, recent DRI research has found that there is no empirical basis for a belief that unconstrained autocratic leaders outperform democratic leaders.

The Ethiopian predicament raises tough questions for people concerned with both poverty alleviation and human rights. The Ethiopian government uses aid to build schools, vaccinate children, and provide social safety nets for the poor. But a Human Rights Watch report found that the government also systematically uses aid as a political weapon to discriminate against non-party members and punish dissenters. The report found widespread evidence of village leaders withholding seeds, fertilizer, and loans from farmers not in the ruling party, and local officials denying emergency food aid to women, children and the elderly as punishment for refusing to join the party.

In Ethiopia, aid agencies should do all they can to make sure aid helps Ethiopians rather than their rulers. One (albeit imperfect) measure of this is “channel of delivery” – data collected by the OECD on whether country aid agencies route funds through the public sector, NGOs, private-public partnerships, or multilateral organizations. These two graphs show available data for the US and the UK.

Like the UK, the World Bank has long given its aid through direct budget support either to the central or local governments, insisting that social accountability mechanisms are in place to prevent misuse. But many observers and journalists tell a different story: that such mechanisms are either not present, or are not working because independent, third-party observers upon which such accountability measures depend are more often ruling party-affiliated NGOs.  Even a study commissioned by the donors found that two of the programs for Ethiopia’s most needy “face important challenges in their accountability systems” and “significant weakness” in safeguards and monitoring processes intended to detect distortion and produce evidence about whether or not the program works.

While it is logical to believe that the way donors deliver aid can strengthen or weaken the compact between rulers and their people in democratic countries, aid cannot create this compact where it does not exist. Empirical evidence does not support the idea that aid can cause dictatorships to become democracies, and in fact a new DRI working paper suggests that aid is more likely to push countries further down their existing path—so that aid to dictatorships makes them more dictatorial, not less.

Bad news for Eskinder Nega and other dissidents and journalists wrongfully persecuted and imprisoned, as aid agencies continue to empower the regime at the expense of the Ethiopian people.

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ARTICLE: A firewall should be built between USAID the defence department

Professor Easterly writes for the Guardian Poverty Matters blog on November 21, 2011:

US foreign aid programmes should be for poverty relief and should not be taken over by national security interests, abetted by delusions of nation-building.

As the US government budget wars continue, everyone agrees that among the most vulnerable programmes is foreign aid. What is now forgotten is that foreign aid enjoyed strong bipartisan support until quite recently. On 16 March 2002, President George W Bush announced large funding increases for aid, which have indeed been realised across two administrations since. Even former opponents such as Jesse Helms became aid boosters. What happened to destroy that support?

The answer is that the US aid programme was taken over by national security interests, abetted by delusions of nation-building. The US Agency for International Development (USAid) wound up in the most self-destructive position – the unsuccessful cover-up. USAid arguably had little choice, but development intellectuals and celebrity aid advocates did have a choice – and most chose to stay inexcusably silent during the national security takeover of aid. The resultant failures overshadowed notable successes in more traditional aid programmes like health. These disasters and the neglect of more feasible poverty relief failed to sustain the compassionate constituency evident earlier in the decade. Aid can still be saved politically if it now forswears the undoable nation-building dictated by the defence department, and returns to its original mission of poverty relief – a mission both cheaper and more likely to succeed.

Read the full article on the Guardian website.

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