Friday, May 04, 2007

The Future of Foreign Aid (or rather, my own future)

"Is foreign aid the solution to poverty?"

Solving poverty, a concept in itself noble and inspiring, is, by its nature, a utopian idea. Like every utopia, it is somewhat removed from reality and has an element of delusion. It is an equal delusion to assume that foreign aid alone is the solution. Whereas it pursues abstract and at times intangible goals, the mistakes of aid are costly and shortcomings tangible. Foreign aid cannot solve poverty not only because it tries to find a “fix” that does not exist. Foreign aid fails because it is poorly managed, blind and incompetent, and does not reach those who it is aimed for. Poverty – a complex and multilayered phenomenon, has no magic fix – a belief that foreign aid has been deluding itself for decades. Instead, there are ideas – humble, small, creative ideas that can be used to help the poor. The poor are not passive recipients, waiting for aid to relieve their burden. The poor are a resource, a major and determining factor, often overlooked and underestimated. Foreign aid, unsuccessful for decades in its pursuit to find external solutions on global scale, needs to shift its attention to those it is trying to help. Foreign aid can help the poor. It can help them effectively and significantly. To be able to do that, it needs to stop its Quixotian quest, admit its mistakes, learn from the past and seek precise ways to achieve effectiveness.

I finished writing my paper. It’s done. Submitted. Over. Now I don’t have to think about it anymore. The results won’t be in until this coming fall. By then I will be in a completely different place with a completely different mindset. And the results most likely won’t matter. Not that they matter now. Although this was a scholarship paper, the monetary reward was hardly big enough to get me motivated to such extent. I did, in fact, put a lot of time and effort into writing it. I tried to read everything I could on the subject and do my best to say everything I wanted to say. And I did write this paper first and foremost for myself. The rewards are already in – I wrote a paper, one that I actually really like – and hell, in fact, froze over.

It’s been a while since I’ve written anything close to this in its length and depth. Hell, I don’t remember writing a decent paper even when I was in school. Despite the fact that I went to the best school in the field in the whole country, its “excellence” hardly amounted to anything – academically it proved to be way too unchallenging and close-minded, still suffering from deeply rooted Soviet notions of discipline and bureaucracy, combined with corruption flourishing all over the country. My straight A record does not mean a thing (except for looking good on paper), since getting anything less than an A would indicate a complete failure under given circumstances. Before I altogether gave up on going to classes, thanks to my good grades and whoever it was that invented “individual schedule”, I took the liberty in choosing my own little projects that were often frowned upon and gained me a reputation of undisciplined waywardness. I learned early enough for my own good that I was not going to get anything out of that institution and chose to learn whatever I needed directly from work experience. Hence my resume dating way back to 1997, when I landed my first teaching translating jobs at the age of seventeen. In fact, it was thanks to this work experience that I came to choose the field I’m about to get into - the same field that less than a week ago I claimed as inefficient, incompetent and ignorant in the aforementioned paper.

I did read a lot for this project. I learned quite a few details, discovered names, the history, the existing “schools of thought.” However, when it comes to the effectiveness of foreign aid, I didn’t find out much that I didn’t know already - by merely growing up in a developing country and watching aid officials, their projects and lives of ordinary citizens (or “locals” in foreign aid language). In the past I have, in fact, been indirectly involved with both UN and USAID, working on a number of contract-based, short term projects in a passive role of a translator. You actually don’t need to be a wiz to see how wasteful, short sighted and incompetent these agencies are. You only need to take a glance at an arbitrary project budget to learn more than you need to know – and this is only the part that I had access to. It’s enough to meet a consultant to realize that the guy has no clue whatsoever either about the country he’s stationed in, or about the job he is doing there. The ones that are actually bright (and I’ve been lucky enough to come across a few) speak bitterly about both the present and the future of this huge industry that is first and foremost a business – one that finds ways to transfer money of the poor from rich countries to the rich in the poor countries. As one of the harshest critics of aid said, “foreign aid has subsidized political irresponsibility and pernicious policies …it has been an opiate of the Third World governments to rely on handouts instead of on themselves for development” (see Bovard for the full article, if you’re further intrigued – a lot of insightful details and examples). I’m not even going to get into the whole Noam Chomsky conspiracy thing (and I do, very much so, believe in conspiracies). So why in the world am I getting into this?

I have to admit that there is an element of vanity in my choice – it’s cool to be in the network of international agencies with big names, such as World Bank, United Nations, International Monetary Fund, the USAID. It’s cool to be able to travel all over the world. Excellent career opportunities, attractive pay, noble and prestigious field. But then I have to stop and ask myself: how long will it take until I get completely bored with the nobleness and prestige and disgusted with bureaucracy, incompetence and outright hypocrisy? At least I know beforehand what I am getting into, if I choose to shoot for the big names, and won’t be stepping fresh out of grad school with rosy visions of saving the world, to get disappointed before my first contract is up.

Perhaps the biggest importance of this project for me was that despite the fact that foreign aid has gained such a deplorable reputation of being useless, wasteful, incompetent and corrupt within its own system, I still see hope, if not for the whole industry, at least in small projects and my place in it. I always believed, and have already spoken about seeing the role of foreign aid in creating opportunities and hope for those who don’t have it. I do believe in humanity and compassion. I do think that foreign aid can help the poor significantly, even if it alone is not the solution of poverty. In my paper I argued about the importance of understanding the nature of poverty, and how, despite its global scale, it is a local and even more so, a personal matter. I argued the importance of cultural sensitivity instead of acting upon assumptions that policies of the West are universally applicable. I argued, based on what I knew, and having my newfound and beloved Mr. Easterly to back me up, that the only hope for poverty is the poor themselves. And I argued the importance of establishing an accountability system in any project implementation and getting feedback from the “locals” to see if aid is working.

What do I see in my future in the field of foreign aid other than my passionate beliefs and a potentially good topic for thesis that I’d like to explore? Small NGOs? Microlending? A job of a consultant residing in luxury suits in five star hotels and business travel class? The Heller School of Social Policy and Management (hosting the program of Sustainable International Development at Brandeis) claims that it trains the next generation of development planners and policy maker for whom a global society free of poverty, preventable disease and environmental degradation is achievable. I can’t quite see myself as one of these “planners.” I’d rather be one of the “searchers,” as Easterly sees them, working in a godforsaken corner of the world, making sure that kids get vaccines, access to clean water, and chance to get proper education. Or continue my interrupted microlending career and give out loans to farmers and small business owners. One of the founders of the most famous microlending institutions did, in fact, receive the Nobel Peace Prize for his efforts to create economic and social development from below. Whatever it is, I do pray to God that I don’t become one of those well paid, meddling bureaucrats, sitting in an office buried in paperwork, without having a clue what poverty is like.

2 comments:

T.S.T. said...

I was just engaged in a debate about microcredit/microlending this weekend. It's such a tremendously promising concept from my perspective . . . but my perspective is one of relative ignorance. Are you a proponent?

Nika said...

I have had about two years of experience in microlending institution in Armenia, and although i was only a part of the support team and wasn't engaged in the decision making, from what i have learned from these two years is that when correctly administered, it can be very very useful. I have first hand experience of both small business monitoring, disbursing funds and operating "growth and impact" database to have an insider's observation of the field. It has been around for a while, and it does have its own critics, but overall it seems to be working better than any other aid project. In fact, here is a passage that i wrote on microlending based on Grameen Bank, which jointly with its founder, received the Nobel Peace Prize for 2006:

Grameen Bank of Dhaka, Bangladesh, is one of the most successful and well known microfinance institutions. It is a creative approach to reach the poor based on the theory that the poor can change their lives through their own efforts. Grameen Bank chooses women as its main borrowers. Loans are short-term and in small amounts, averaging slightly over $100.

Microlending, as an alternative to aid, is achieving development better than expensive and unrealistic aid incentives. It reaches out to the poor – one thing that foreign aid failed to do. It provides what the poor need most – resources that they otherwise have no access to. It gives loans directly to the poor and let them manage the way they find it fit. It understands the importance of credit – lack of access to even small amounts of capital as primary reason why many of the world’s poor remain socially and economically handicapped. It targets women as its main borrowers, since they are at greater risk of being poor than men and they experience poverty more profoundly than men. It sees importance of women in the development process, since women often work harder and bear a greater burden in the sustenance of their families. Helping women means helping families and children, since women are more likely to invest their income in their homes, which in its turn ensures better life for families and children.

Microlending is an empowering approach to development, as it provides resources to the poor directly. Because microlending is based on loans, rather than grants and handouts, it imposes responsibility on borrowers to repay these loans on time. It sets strict rules and does not forgive loans. It further requires the use of loans for business reasons instead of consumption. It targets one of the most vulnerable layers of population – women, as it sees them not only worse affected by poverty, but as an important role player in the life of their families..."

and so on and so forth. A long answer to your question that yes, i am, in fact, a big proponent.