Poverty & Overseas Aid
What happens in the developing world is intimately connected to what happens in the developed world. We live in a globalised world in which the decisions of consumers, governments and corporations determine who wins and who loses in the global economy. Unfortunately, addressing poverty is not just as simple as sending money overseas.
Poverty is a suprisingly complex subject. Why are people poor? What do we do about it? What do we even mean by 'poverty'? Poverty is a word that is used to describe people in vastly differing circumstances, with vastly differing self-understandings of their own predicament. Sometimes there is a danger that when we label someone as 'poor' that we do not listen properly to what they actually think about their life situation and what they hope for the future.
Certainly, we cannot properly understand the experience of human hardship without paying attention to economic, political, cultural and historical factors, and there are a number of common, recurring themes:
- rights to land and other natural resources
- global trade structures
- concentration of economic power
- corrupt and oppressive governments
- conflict and violence
- oppression of minorities
Also, there is little doubt that there is a structural relationship between poverty in large regions of Africa, Latin America, Asia and the Pacific, and affluence in North America, Europe, North East Asia and Australasia. The core elements of this relationship are:
- the demand for massive quantities of cheap commodities (food, minerals and fibres) to supply industrialised consumer economies
- the need for cheap labour in primary production and low-end manufacturing to ensure cheap consumer goods
- the political dominance of the West in all key international structures: the Word Trade Organisation, the International Monetary Fund, the World Bank and the United Nations Security Council
- the dominance of most key sectors of the global economy by enormous multinational corporations
- the control of global finance by Western governments and corporations, and the destabilising and opportunistic role of financial markets
- the reliance of many corrupt and oppressive governments on the military and financial support of wealthier countries
Poverty in the Mekong
Explore the Mekong Manna section of this website to see the complex relationship between poverty, economic development and overseas aid in countries such as Laos & Cambodia.
Manna Matters Articles exploring issues of poverty
- Who are the poor and what do they want anyway?
- Can we really make poverty history?
- Understanding the global food crisis
- Experiences of the food crisis in Cambodia
- A view from Kabul
The Role of Aid
Foreign aid takes two forms:
- aid from international institutions (such as the World Bank or UN) and the governments of wealthy countries - this is called official development assistance (ODA) and makes up over 90% of international aid.
- aid from non-profit non-government organisations (NGOs), such as Oxfam, TEAR and World Vision, which is sourced through private donations. NGOs can also be involved in delivering official development assistance (ODA).
Delivered well, international aid can play an important role in alleviating the suffering of the poorest and most vulnerable in the world, and can help in improving the longer term life prospects of poor communities.
However, aid makes up a fraction of international finance: in 2008 total ODA from all countries was around US $134 billion - compare this with the fact that in the same year the USA alone implemented a US $500 billion economic stimulus package and the UK a £700 billion rescue package. And given that poverty is primarily caused by economic and political structures, aid can never be a solution to poverty.
Unfortunately, aid can also sometimes be part of the problem. ODA from international institutions and governments has often been used to reinforce existing global economic structures, rather than to
meet the needs of the poor and vulnerable. Poorly implemented aid projects can also have unintended negative impacts upon local communities.
Listen to a discussion on ABC Radio National's Big Ideas program between Anglican Archbishop, Dr Philip Freier, Jonathan Cornford from Manna Gum, and Valerie Browning, an Australian-born midwife who has lived in the Horn of Africa for 35 years.
Australia's Aid Program
While we would like to believe that all aid is good, the reality of aid is much more messy. While, undoubtedly, Australian aid money has done much good overseas, it has also been associated with some things which we should be uncomfortable with.
Aid/Watch is the only independent Australian organisation dedicated to monitoring aid. This website provides information and critique on multiple dimensions of Australia’s aid program.
Banking on aid
For the last decade the World Bank and Asian Development Bank have been described as the ‘key partners’ of Australia’s aid program. Other than AusAID itself, the banks are the single largest channel for delivering Australian aid and Australian contributions to the banks are set to grow even more.
However, while both of these institutions have been the subject of sustained and vigorous critique internationally, there has been relatively little debate about them within the Australian development community.
Banking on Aid presents data which more fully describes the role of the banks within Australia’s aid program and surveys the arguments being made for and against the them – it argues that the role of the banks in Australian aid should be the subject of more critical debate.
Articles which discuss Australian aid:
- Banking on aid
- Can we really make poverty history?
- When aid projects go wrong: What is AusAID's responsibility?
- The aid industry in Burma
- Who are the poor and what do they really want?
- Opening the Can of Worms: Hard questions about aid
- Australians & Laos (2): On the GMS bandwagon
- Australians & Laos (1): Where you stand determines what you see