RULES FOR REAL
AID
1	Aim at the poorest
Aid aimed at stimulating overall economic growth has failed to reach the poorest 40 per cent of the world’s population. Paul Streeten now puts the case for a ‘basic need’ approach to aid and development.

	8th July Dear James What a relief to find myself here in the Sonargaon! Having heard that Dacca was a real hell-hole, I had visions of sleepless nights in a bug—ridden bed, with cockroaches crawling around the floor. But the Sonargaon has a spotlessly clean marble floor, sparkling fountains and a nice swimming pool. As · far as the aid scene goes, I feel I’ve jumped right into the deep end of the pool. My brief here was to take a Dekko at the Greater Dacca Power Project, · one of our biggest aid projects here. We expected it to attract factories and -create new jobs, but things haven’t quite worked out as planned. In fact the scheme.. is now supplying electricity for air conditioners, refrigerators, TV sets, hair. dryers and electric lighting for people in the better—off parts of the city. Not quite what we’d intended, but who are we to complain? It was worth millions to us in export orders, consultants’ fees etc — which can’t be bad! The project itself seems to be running pretty well. Apparently other parts of Dacca suffer from power failures with monotonous regularity; that’s not our problem. and I’m not losing any sleep over it. Tomorrow I’m hopping across the border to Calcutta and then it’s on to Delhi.

THE idea of meeting the basic needs of all before satisfying the greed of the few goes back to the founders of the world’s great religions. More recently, it has become a central topic in the world development debate. Today, virtually all aid donors and many national governments are officially committed to make meeting basic human needs a primary objective of development.

Yet the actual practice of official aid to developing countries still offers little to the poorest 40 per cent of the world’s population. Indeed, most aid seems to be administered as if long discredited ‘trickle down’ theories of development still commanded respect. Under the guise of ‘building the infrastructure for development’, sophisticated telecommunications systems are installed, costly steel mills and power stations constructed, huge tracts of land irrigated and planted with export crops and agricultural technologies introduced in which the hungry are too poor to invest. Such ‘aid’ brings few benefits to the 800 million absolutely poor people in the world, and is often detrimental to them.

The basic needs approach to development, stimulated by the World Employment Conference of the International Labour Office in 1976, defines the five main basic needs as food, health, water and sanitation, education and shelter. By targetting scarce resources on the poorest 40 per cent of the population, the basic needs approach aims to eradicate (or lessen) hunger, disease and illiteracy with fewer resources and sooner than the roundabout method of raising incomes.

If this approach has so much to recommend it, why has it failed so far to become the chief focus of development aid programmes? The explanations lie on both sides of the aid relationship. Among aid donors, five myths persist about the shortcomings of the approach. Among aid recipients, four suspicions confuse the issue still further.

Five Myths
1. ‘Basic needs would sacrifice investment, productivity and growth in favour of consumption and welfare. These are luxuries which only rich countries can afford’.

Photo: Claude Sauvageot

Not so. Meeting basic needs on a sustainable basis calls for considerable investment and steady growth, but distributed on a more equitable basis, for example through expanding the production of food rather than export crops, and favouring efficient labour-intensive technologies rather than capital-intensive ones. In addition, a growing body of evidence suggests that a basic needs approach acts as a stimulus to productivity. A healthy, literate and well-fed labour force is capable of greater physical and mental effort than one that is ill, hungry and malnourished — as shown by the examples of Japan, South Korea, Taiwan and Israel.

2. ‘Donors can respond only to requests from the governments of developing countries, many of whose attitudes towards basic needs are lukewarm or even hostile. We cannot interfere in the development policies.

There is more than a grain of truth in this argument. But donors are free to select for assistance those countries that are eager to embark on a basic needs approach. In any case, recipient governments are rarely monolithic. A combination of aid and dialogue can lend support to the internal forces working to move government policy in the direction of a basic needs approach.

3. The approach is not practical because most developing countries lack the administrative and technical infrastructure to use large sums of aid for basic needs projects’.

This is a ‘cop-out’ argument. True, more administrative and technical skills are needed to design and manage development projects in the Third World, but these could be provided by increasing aid in the form of technical assistance — provided the intention to do something about the problem exists. Often these skills are not highly sophisticated and could be speedily acquired. The basic need approach calls for ‘barefoot administrators’ and ‘barefoot technicians’ rather than over-trained experts with skills more relevant to highly industrialised countries than to the Third World.

4. ‘Basic needs is a Trojan horse for socialism or even communism, and most countries with which the Western nations co-operate do not wish to adopt these ideologies or forms of government’

It is a fact that the only societies which have succeeded in meeting basic needs are those which have also reduced inequalities. It is also true that there is less inequality and poverty in socialist countries than in capitalist ones, though some socialist countries have also failed in meeting basic needs.

Revolutionary land reforms and public ownership of the means of production in countries such as China, Cuba and Vietnam make it easier to pursue a basic needs strategy. But the success of several non-socialist countries — such as Sri Lanka, Costa Rica, Taiwan and South Korea — in meeting basic needs shows that socialism is not a prerequisite.

5. ‘The basic needs approach lacks serious analysis and is largely rhetoric. The implementation is either fuzzy or — where spelled out — inefficient, unsuited to achieve the declared objective and possibly counterproductive’.

This criticism is of more concern to academic economists than to people concerned with getting things done. It also happens to be untrue. It may, of course, turn out that some attempts to meet basic needs will be inefficient or even counter-productive, and compromises with more conventional approaches may have to be accepted. But in view of the lack of success of previous strategies to reach the deprived, experimentation with new methods should be welcomed.

Four Suspicions
Many aid recipient governments, on their part, are still preoccupied with four suspicions about the basic needs approach.

1. Basic needs is an excuse for reducing foreign aid to poor countries because they require largely local resources’.

Wrong. A global commitment to meeting basic needs demands more, not fewer, international resources. A basic needs programme to provide minimum acceptable diets, safe water, sewerage facilities, public health measures, basic education and to upgrade existing shelter would call for substantial investment and recurrent expenditures. To give one specific example, recent World Bank estimates put the capital cost of achieving universal access to adequate water supplies and sanitation by the year 1980 at between $200 and $600 billion. If the countries of the West were to concentrate their efforts on the poorest countries and contribute about 50 per cent of the costs of these programmes, an additional $20 billion of official aid will be needed between now and the year 2000. At this rate official aid flows would still be only 0.43 per cent of GNP (compared with 0.34 per cent at present) and still well below the UN target of 0.7 per cent.

2. ‘Basic needs serves as a device for protecting inefficient manufacturing industries in the West, by slowing down the growth of manufacturing industries and their exports in the Third World’.

Wrong. Though some donor agencies may have abused it in this way, a basic needs emphasis on agriculture, the rural sector and labour-intensive industries is not in conflict with export-led industrialisation. On the contrary, it is a necessary condition for it — as shown by the examples of Taiwan and South Korea.

3. ‘Using basic needs criteria paves the way for donors to violate national sovereignty and interfere in the autonomous setting of development priorities’.

Not necessarily. Buffer institutions, acceptable to both recipient and donor countries, can protect the recipients’ sovereignty and the donors’ wishes to channel funds towards the basic needs of the poorest groups. Multilateral organisations and voluntary agencies are particularly suited for this role. The specialised agencies of the United Nations are already organised to meet the principal basic needs. What they lack is co-ordination, political clout and financial backing.

4. ‘Basic needs is just a tactic to divert attention from the responsibilities of the industrialised nations under the New International Economic Order (NIEO)’.

The NIEO, which calls for larger resource transfers from North to South and radical reforms in the international distribution of power, is a worthy and just cause. But it offers no guarantee that Third World governments will use their new power to meet the basic needs of their poor. A NIEO not committed to meeting basic needs is liable to transfer resources from the poor in rich countries to the rich in poor countries. The ideal combination would be for a national government to commit itself to meeting the basic needs of its people — for example, by a campaign to eliminate hunger and malnutrition — and for the international community to commit the financial and technical assistance needed to support a large part, say half, of such a programme.

The experience of a great variety of countries and programmes over the past 30 years demonstrates that a basic needs approach to development is far more likely to reduce poverty and deprivation than conventional ‘growth first’ development strategies, without regard to growth of what and for whom. This does not mean that basic needs development is an easy option. On the contrary. The point, however, is that no progress at all is possible unless the fundamental objective is borne in mind. With strong national and international commitment to meeting the basic needs of the poorest 800 million people in the world and with the mobilisation of a political base, the elimination of the worst aspects of global poverty is possible within a generation.