Questioning aid: Bangladesh perspective

Aid, in the neo-liberal framework cannot be effective, and it can rarely put positive impact on the ground for which it is supposed to work for the development of the poor people in particular. It is also important that developing countries devise their own means to maximise utilisation of aid effectively denouncing the imposed conditions and at the same time hold lenders and recipient overnments accountable to the people. And for effective aid, there must be the real commitments to realise ownership, harmonisation, alignment and mutual accountability that have been emphasised in the Paris Declaration on Aid Effectiveness, writes Ahmed Swapan Mahmud

SINCE independence, Bangladesh has been facing a serious crisis to become self-reliant, free from conditions, policy prescriptions and dependency imposed by the donors. For over three and a half decades, in the name of development, the international financial institutions and the corporate agencies of rich countries have determined economic policy apparently for the county’s development. It has been observed that the policies are framed in such a way that the prescribing institutions benefited out of the policy impositions and conditionalities for aid instead of improving the socio-economic status of the country. In fact, the poverty reduction rate, of around one per cent till 2007, is not satisfactory. The question is then where does the money go? Recent trends show that though aid flow is decreasing, conditionalities are increasing.

In this age of capitalist globalisation, marginalisation is increasing while people’s struggle for life and livelihood is worsening due to the interventions of lenders in national development policy as well as to the political sphere. One of the major reasons of the poverty situation in Bangladesh is for policy impositions and interference by the lenders. For more than last 36 years, development history clearly indicates that foreign aid cannot solve the problems, rather in most cases, it creates a market for the companies of the rich countries, leads public service sector to privatisation, forces adoption of policy decisions of the donors which mainly protect interest of the rich countries. And with that point of view, it is also clear that the Poverty Reduction Strategy Paper, mainly a lending policy instrument where people have little participation cannot reduce poverty at all.
Foreign aid must be free of conditions for its effectiveness that helps being self-reliant for a country. Foreign aid to Bangladesh’s Gross Domestic Product (GDP) dipped in the last 20 years. Foreign assistance constituted 10 per cent of GDP in the 80s, bit stands at about 2.4 per cent now. It is also observed that the lenders’ funds were actually channelled back to them in several ways. A study shows that 75 per cent of the aid money returned to the lending agencies or countries in different form which included 13 per cent as consultancy fees, 12 per cent as equipment suppliers’ fees etc. Besides, various vested interest groups plundered the money including bureaucrats and politicians of the country who took seven per cent of the total amount. And most of the remaining amount was gobbled up by their local mediators. And the conditionalities also cripple the process and aid hardly puts any effective impact on the ground for which it is designed.
The International Financial Institutions like International Monetary Fund, World Bank, Asian Development Bank and the United States Aid play dominant role and put conditions even in granting loans that further cripple political decision making process of the government. Lending agencies and the rich countries maintain double standards in granting loans and aid to developing countries. Formulation of any national policy, there is a need for healthy debate bringing together politicians, members of the civil society, professional experts, academics, researchers, activists, citizen groups, non-governmental organisation and communities. But hardly, any meaningful participation of different stakeholders takes place in police formulation. Any national policy must be participatory where people from all walks of life should have the scope for active participation so that they can put forward their opinions effectively.
But the decisions are made in closed-door meetings where people don’t have any access. Lenders and bureaucrats define guidelines and formulate policies for national development. Foreign aid has made the country indebted and burdened with huge liabilities which currently stands at some Tk 10,000 per capita.

It is demand of the conscious citizenry that lenders, in the spirit of honesty, transparency, and good governance, provide the public of Bangladesh with the all kinds of information for every project funded by them, including the percentage of project funds believed to have been lost due to corruption at different levels, breakdown of which groups are the immediate recipients of the funds, independent benefit incidence analysis with a breakdown of who the ultimate beneficiaries of the project are, clear statement of the specific conditionalities, signed declaration stating whether disbursement of the project funds may be used as leverage for other concessions or favours from the government.
Aid, in the neo-liberal framework cannot be effective, and it can rarely put positive impact on the ground for which it is supposed to work for the development of the poor people in particular. It is also important that developing countries devise their own means to maximise utilisation of aid effectively denouncing the imposed conditions and at the same time hold lenders and recipient governments accountable to the people. And for effective aid, there must be the real commitments to realise ownership, harmonisation, alignment and mutual accountability that have been emphasised in the Paris Declaration on Aid Effectiveness.
   
Ahmed Swapan Mahmud is a head of Voice for Interactive Change, a non-governmental organisation and a development activist

http://www.newagebd.com/2008/oct/27/oped.html