On the 4th of July 2012, the Global Poverty Project’s National Director Samah Hadid spoke in The Wheeler Centre’s Intelligence Squared debate on the topic ‘Is foreign aid a waste of money’. This is what she has to say.
If we accept that extreme poverty is wrong, and we are committed to doing something about it, then we can’t possibly believe that foreign aid is a waste of money.
Foreign aid is writing incredible success stories - helping hard working people escape the cycle of poverty.
We have been lucky in the lottery of birth. But 1.4 billion people aren’t so lucky, and their lives are being constrained as a result. Not because they aren’t trying hard enough to change their situation, but because they’re working in broken systems.
Let’s think about what this would mean for a minute, by applying it to our own lives. If we were born into poverty:
- As babies we would have been vulnerable to basic, but life-threatening health issues like measles, malaria and diarrhoea,
- Many of us wouldn’t have a primary education. If we were lucky enough to have a school near our community, our families would have struggled to pay fees, and women would have been less likely than their male siblings to be sent to school.
- If we wanted to start a family of our own, we’d face a shortage of skilled health workers and birth attendants - leaving our families vulnerable to life-threatening complications during pregnancy and childbirth, and
- Any of us hoping to build businesses or trade goods to build ourselves a better future would rely on the presence of local infrastructure to get us to markets - basic things like bridges and roads, that may not exist.
These issues - the absence of basics like health services, education and infrastructure - are stifling possibility in more than 1.4 billion people. They’re basic issues, and issues that our aid helps address.
In just the past four years, Australia’s aid has done things like:
- Vaccinate 900,000 children in Papua New Guinea,
- Helped seven million children into schools in Afghanistan - providing upcoming generations with crucial education opportunities
- Supported maternal and child health services for more than 27 million people in Bangladesh - leading to a 40% reduction in maternal deaths over the past decade, and
- Supported transport infrastructure in Vanuatu - providing job opportunities, and access to important services, such as health services and schools.
These are just a handful of success stories – a small part of an international aid system that has saved more than 10 million lives in the past 10 years.
These kinds of life-changing opportunities make our aid program an incredibly important investment.
Aid helps write incredible success stories, and helps hard working people escape the cycle of poverty. It is a crucial component in a set of measures providing our world’s most vulnerable with the opportunity to escape extreme poverty. It is helping vulnerable communities deal with the impacts of natural disasters, famine, and the unpredictable effects of climate change. It fosters trade: ensuring a more literate and healthy population that can attract investment, and participate in markets. It also contributes to good governance, and reduced corruption - because educating a population allows them to better hold their government to account.
Effective aid also helps people work their way out of extreme poverty so they won’t need aid in the future. It can help kick start economic development and better governance, so that countries can graduate from aid – as Brazil, Panama, Vietnam and South Korea did. South Korea has even transitioned from being an aid recipient to an aid giving country. And it was able to successfully enter the trade system because of aid assistance and investment in education.
Aid helps create the crucial preconditions to communities escaping poverty. It’s not the answer to extreme poverty - but this complex issue has no single solution. Instead, we need to combine targeted, effective aid with things like trade, good governance and debt forgiveness, to ensure people born into broken systems will have the opportunity to escape extreme poverty.
We know that things like trade are important in helping lift economic conditions in poor countries. But trade cannot do the job of fighting poverty alone. To allow trade to happen, the world’s poor need to be able to make investments - into things like credit markets, infrastructure and education. And if we’re going to alleviate, rather than exacerbate the suffering of the poor, our trade markets need to be fair and equitable - which isn’t currently the case.
An issue that often comes up in discussions of foreign aid investment is corruption.
We agree, corruption is an issue, and one that we should be working to tackle. But let’s put this issue in context: in the past 4 years of Australia’s aid program, corruption has affected just 0.017% of aid dollars. To use it as an excuse to remove support for the whole program is completely unreasonable. We shouldn’t be throwing the baby out with the bathwater.
If our concern with such corruption is directed where it should be – the fact that it directs money away from the world’s poorest people – then we should be talking about corporate tax dodging - which costs developing countries more than $160 billion dollars; more than the $120 billion that is given in aid.
We should be addressing corruption, and we can do that by supporting the types of things we know make a difference - like education, something that aid supports.
We know Australia’s aid is improving literacy - investing in a generation who will be better equipped to hold their leaders to account. It’s also improving governance, accountability and delivery of services by working with governments and communities to ensure money is spent wisely.
If we’re committed to addressing the injustice of extreme poverty, then aid is a crucial investment. It pays for the things that are the preconditions to escaping poverty, allows people the chance get a foot onto the ladder of development, and saves lives. And that is why foreign aid is not a waste of money.