BABY FOOD | AID

The United Nations has asked the rich countries of the world to give 1% of their Gross National Products every year in development aid to the poor countries. Britain, along with many other developed nations, now claims to have exceeded this target.

But these facts grossly overstate the amount of genuine aid given for world development.

First of all, the famous 1% target includes not only money given by governments but also money invested in the poor world by the private companies of the rich nations. There is no justification for including these investments under the aid programme. If a British company invests in Germany it never occurs to us to call this ‘aid to Germany’ - but if the same company inyests in India or Nigeria, then it is labelled ‘aid’ and included in Britain’s total aid budget. This point is not a minor quibble, for these investments account for almost two thirds of Britain’s total aid.

Most people and many governments now accept this and as Anthony Tasker, Director of Britain’s Overseas Development Institute, has said "The ‘1% target in anything like its present form, no longer deserves a place in serious international discussion of development issues".

If we subtract private investments from the total aid programme of the rich world we are left with ‘official aid’ given by governments. The United Nations’ target for official aid is 0.7% of the rich countries’ G.N.P.s. This is a much more meaningful figure but hardly any of the rich countries have reached it and some, like Britain and the United States, have not even accepted it as a target to aim for. In practice, the rich countries are giving a smaller and smaller proportion of their wealth in official aid. During the First Development Decade (1961 - 1971) official development aid, as a percentage of the rich nations’ G.N.P.s, fell from 0.53% to 0.35%.

But even official aid is exaggerated by the way in which it is measured. Much of the aid given to the developing world is in the form of loans which have to be repaid often with interest. These interest repayments totalled $487 million in 1970 - 1971 (approximately 7% of all the aid received by the poor world in that year). By 1970 the total outstanding debt of the poor world amounted to $67 billion and repayments stood at over $5 billion a year. Already, several poor nations arc paying back to the rich world more in debt and interest repayments than they are receiving in aid.

The real value of official aid is further reduced by the common practice of stipulating that aid money can only be used to purchase products from the country which is giving the aid. Well over half of all the rich world’s aid is ‘tied’ in this way and studies in Pakistan have shown that goods purchased with ‘tied’ aid cost on average 50% more than would have been the case if the Pakistan government had enjoyed the freedom to shop around. This figure is probably exceptional, but a study commissioned by the World Bank found that goods purchased with tied aid were, on average, 20% more expensive.

The tying of aid in this way is, of course, an indirect boost to the industries and exports of the rich countries giving the aid. But as George Woods, former President of the World Bank, once said "If you want to subsidise your manufacturers, then do it. But for heaven ‘s sake don ‘t call it aid."

All these factors severely erode the value of "the millions we give in aid".

If world development is ever to be a reality and if unnecessary suffering is ever to be stopped then there will have to be an increase in both the quantity and the quality of international aid. But aid alone can never solve the problem of world poverty. Social reform, self-reliance, economic growth, population control, fairer trade, technical, and financial policies, are the essential prerequisites for world development and without them it will be impossible to make maximum use of aid as a weapon against world poverty.