Re: [A-List] The Monterrey consensus: Stiglitz speaks

["Anne Williamson" <annewilliamson@xxxxxxx>]

Life must be hard once a sell-out parasite like Stiglitz is informally
banned from
receiving World Bank support/grants. This man is a total fraud.  Thought
he'd make
a big "morality" play, but then discovered the wind is mighty stiff when you
go
against it.  Next he'll be signing on with that great humanitarian, Jeffrey
Sachs(-of-shit),
who just happens to have a big bag of money from the UN for AIDS that he is
deploying
in the same way he deployed Russian aid money - to his and the elites'
advantage.  -A.

----- Original Message -----
From: Keaney Michael <Michael.Keaney@xxxxxx>
To: A-List (E-mail) <a-list@xxxxxxxxxxxxxxxxxxx>
Sent: Monday, April 15, 2002 9:03 AM
Subject: [A-List] The Monterrey consensus: Stiglitz speaks


Overseas aid is money well spent
Assistance from the west can reduce poverty in developing countries. It is
time to stop making excuses, says Joseph Stiglitz
Financial Times: April 15 2002

The United Nations conference in Monterrey on finance for development was
not the disaster that many feared. It produced a chorus of recognition of
the risks posed by the widening gap between haves and have-nots. The US
pledged a substantial increase in its overseas assistance. But even with
that increase, US aid is paltry, a mere 0.15 per cent of gross domestic
product, and much of that assistance is allocated not so much by
humanitarian concerns as by geopolitical motivations.

Worse still, however, is the excuse given by Paul O'Neill, Treasury
secretary, for this stinginess. He argues that if Washington is to give aid,
it must be shown that it is effective, hinting that there is no such
evidence, or at least that he has not seen the evidence. But if he has not
seen it, it is simply because he has not looked.

I have had the good fortune of being able to see development assistance in
action "on the ground": irrigation projects in the Philippines or Nepal that
allowed farmers to have two or three crops a year, rather than one, doubling
or tripling their meagre incomes; or education projects in Colombia,
designed to allow the children of migrant workers to move from school to
school, and pick up lessons where they left off.

Not every dollar is well spent, of course. That can always be said, whether
in the public or private sphere. But World Bank studies have shown that aid
to countries with reasonably good policy environments - and there are many
such countries - has significant effects in spurring growth and reducing
poverty.

Of course, much aid has gone to countries without those conditions, but the
assistance was as often dictated by political concerns as by a push for
development. Think of the west's backing of Zaire's Mobutu Sese Seko during
the cold war; or the billions sent to Russia in July 1998 to support Boris
Yeltsin.

Failures should not be chalked up against development assistance; rather,
they should be treated for what they are - money spent, whether wisely or
not, to pursue political objectives.

The fact that statistical studies, which did not distinguish between the two
kinds of aid, suggest that assistance to countries without the right policy
environment does not promote growth has led many to conclude that aid should
be given only selectively. I believe, however, it would not be in the west's
interests - nor would it be morally right - to abandon developing countries,
which include some of the poorest people in the world. It is bad enough that
they suffer from exploitative or incompetent governments, or that they live
in countries visited by large adverse shocks beyond their control.

There is an alternative strategy: find different delivery mechanisms that
bypass the government and focus assistance on projects that directly help
the poor. In Bangladesh, for example, non-governmental agencies have
provided micro-credit, which not only enhances the income of the poor but
provides programmes to imp- rove the health of women, strengthen their
understanding of their legal rights and enhance the quality of education in
poor villages.

The slogan "Trade not aid", sometimes used by those reluctant to give aid,
would be more convincing if countries such as the US opened themselves
freely to goods from developing countries. Instead what do we find?
Vietnamese catfish are not allowed to go by that name, as their low price
undercuts American catfish. Steel imports from efficient producers in Asia
are kept out of the US. As Russian aluminium entered the US, the US created
a global cartel to limit the inflow.

Trade is important, and Europe's generous effort to open its markets to the
poorest countries (the Everything but Arms initiative, which, because it has
not really addressed problems in agriculture, has come to be called
Everything but Farms) needs to be deepened and broadened to include not just
the very poorest. If the US were to join Europe in this endeavour, it would
show it is serious about promoting free trade - and Washington should act as
soon as possible.

But opening up markets makes little difference if countries lack the
capability to produce for them - if, for instance, they do not have the
transport to bring their goods to market. By the same token, the mantra that
countries should turn to the private sector is misleading. Foreign
investment is important, but it goes to relatively few countries and in
relatively few sectors. Foreign direct investment misses out on rural roads,
on health and education - all important to developing countries.

The Monterrey conference was long on rhetoric but, especially because of
Washington's refusal to make serious commitments either on aid or trade, it
was short on action. Two years ago, civil societies around the world united
in the Jubilee Movement to push debt relief. They succeeded. What makes
democracies so great is that political leaders must respond to popular
demands. It is time once again to unite, to push for trade and aid to the
poorest.

Full article at:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT326V2A10D&liv
e=true

Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland

michael.keaney@xxxxxx