For Richer For Poorer: An Oxfam report on western connections with world hunger

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FORRICHERFORRERN OXFAM^aiEPORT ON WESTERNCONNECTIONS WITH WORLD HUNGERBY JOHN CLARK

First published 1986 Oxfam 1986ISBN 0 85 59 8 0 77 X

Typeset by Typo Graphics, OxfordPrinted by Belmont Press, Northampton

Published by Oxfam274 Banbury Road, Oxford 0X2 7DZ, United Kingdom.

This book converted to digital file in 2010


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AcknowledgementsI would like to thank the many people who helped in the prepa ration of this book,witho ut whom it would never have seen the light of day.

Particular thanks go to my colleagu es in Oxfam, both overseas and in the UK,who provided valuable information, suggestions and comment. Within theCampaigns Unit, special thanks go to R ob wh o helped piece the init ial jum bleof facts, theories and ideas into a coherent shape, and to Beverley, Zita andAnne who translated the jumb le into legible typescripts.I am also very grateful to those in development institutes who providedinform ation and guidance , in particular to Susanna Davies, Reg Green,Stephanie Griffiths-Jones, Michael Lipton, Robin Luckham, Simon Maxwell,Walter N ewlyn, Andrew N ickson and Chris Sm ith, and to s taff at the ODA, theWorld Bank European office, OECD and Unicef, who gave their assistance. Mythanks go also to Christopher Huhne who helped me understand some of thecomplex issues relating to debt.Finally, special thanks go to Sue who gave me support and encouragementwhen I most needed it.

John Clark,October, 1986.


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Contents2 Acknowledgements4 Foreword7 INTRODUCTION: Setting the Scene

1 1 AID: Getting it Right35 TRADE: The Treadmill5 1 AGRICULTURE: The EEC Mountains59 DEBT: A Crisis for the Poor75 ARMS: Whose Defence?85 CONCLUSION90 Appendix I: African Debt Payments Calculations92 Appendix II: The Aid Trade Provision93 Appendix III: 10 Schools of Thought on the Debt Crisis99 Notes and References

104 Further Reading


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Foreword

In the winter o f 19 75 /76 I stayed in a sm all village called G uriawan in the Gayadistrict of Bihar State, India. This is a very poor, famine prone area inhabitedmostly by harijans or 'untouchables'. On the whole, these people are landlessand are often contracted virtually as bonded slaves to work for the fewwealthy landowners.In general the land in this area a llows two crops a year a whea t crop fromthe short rains, and the main rice crop from the long monsoon rains. Over the

winter, be fore the wheat seeds are sown, a crop of po tatoes can be grown on th ebest land. Potatoes fil l an im portan t gap fort he poor. They are cheap and readilyavailable in the village markets during the months when rice and wheat arescarce and expensive.The year I was there saw good harvests and there was no talk of foodshortages. But by January a strange phenomenon had developed. Merchantscame in droves from the town of Gaya and set up makeshift wooden shacksalon g the roads in the area . They were buying up potatoes. And they paid two orthree times the norma l price. The landlords were only too pleased to sell and for

a while the m ain work available to the hahjanswas acting as beasts of burden,carting the potatoes to the buying points.On 23 February 19 76 1 walked along with a group of them men and wom en.Each had an 801b sack perched on the ir head. I tried to carry one for a while butcould n ot las t more than a few hundred yards. Our journey was six m iles.When we arrived at the s ellin g p oint we joine d the queu e. At the front was ata l l , elderly man who was gaunt and thin clearly malnourished. He scoopedup the co ins tha t the mercha nt slapped down on the coun ter andwrapped them ,without checking, in his lunghi. He turn ed , and walked slowly away slightlyhunched, apparently in pain. He moved round to the side of the hut, s quattingdown for a re st.Our turn in the queue came. We handed over the sacks and collected themoney to take back to the landlords. As we started to walk away, the old manwas struggling to his feet. We had carried on a few yards when there was acom motion behind us. Turning roun d, we saw people running to where the m anlay, sprawled on the ground. He had simply collapsed and died. The strain o fheaving that heavy sack had proved too much for h im.Tragedies like this must occur many times a day throughout India.Statistically sp eaking he had probably reached h is full l ife expectancy. But here

was not a sta tistic. Here was a real m an. He had a name Vishna th. He had afam ily and friends , a home, and once had a childh ood . But he had no future . Hedied in the e ffort to get a bag of potatoes from point A to point B, in order to earna few pence.


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I felt sad, of course, but I also fe lt angry. Angry, because I knew that the wholesorry episode was tied up strange as it may se em w ith the potato shortageback home in Britain tha t year. The cause of the sho rtages I cannot remember,but the effect was to send the price soaring. The Brit ish, being creatures ofhabit, insist on potatoes with their m eals, and must have chips with their f ish.The demand in Britain was me t by impo rting from far af ield ; from the CanaryIslands, from Egypt and now from India. The mercha nts were quick to seize theoppo rtunity and tha t is why Vishnath carried his sack from point A to po int B.Since the export price was so good, few potatoes got to the local markets.Although the harvest had been good there was hardly a scrap of food that thelandless poor could afford to buy. For the previous 5 or 6 weeks, Vishnath andhis family would have lived by eating edible roots and leaves in the forest,eating an occasional rice meal on the days when there was work to be had. Iknow, because that was how the harijans of Guriawan were surviving. In this

year of plenty, a massive food shortage had evolved. Vishnath was an earlyvictim of the hunger.Initially, it seemed wrong to me that India should be exporting food at all,especially to B ritain. But tha t was too sim plistic. India has trad itiona lly exportedtea, pulses, spices, nuts and a wealth of other foods, in exchange for theimported goods it needs from countries such as Britain. Fair exchange is norobbery. India cannot afford to be isolated with in the wo rld.Time and time again an aid worker or a journalist will describe the irony offood exported from a region in which people go hungry. The famous Bengal

fam ine of 19 43 occurred in a year of peak food p rodu ction. But food was beingexported to the B ritish troops in Burma and Singapo re. During Africa's fam ine in1984 journalists protested when they heard of a ship in London unloading itscargo of Ethiopian me lons.It is righ t to po int out these ironies. They signal a real wron g. But the w rongis not the trade in Third World crops itse lf, but the terms of trade between theFirst World and the Third World, and the cruel gap in the w orld between rich andpoor which means that the vast proportion of the benefits of trade go to thewealthy and precious little is left over for the poor.It may make perfect sense for Kenya to switch land from growing maize forlocal food consumption to growing tea for export. There is an abundance ofcheap maize in the world whereas tea prices, though fall ing, are holding upbetter than cereals.But the problem is who ben efits? The proceeds from se lling the tea are morelikely to be used on importing cars and videos, on paying interest charges onKenya's deb ts rather than on importing maize for people to e at. And the price ofbasic food will start to rise as less is produced. This has happened in Brazilwhere soya, sugar, and other export crops have taken over from black beans a staple food of the poor. The relative price of beans has shot up.The problem is easier to define than the solution. The solution lies inattacking poverty and the forces that fuel it. Forty-four years of overseasexperience has taught Oxfam tha t hunger rarely stem s from a shortage of food,but usually from the inab ility of the poor to buy tha t food. And whether or not the


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food is expo rted, or sold in the c ities , or simp ly stored m akes I itt le difference tothe hungry.It is not food then, tha t is in short supply, but jus tice . And to unde rstand thislack of jus tice it is necessary to understand the interna tional forces tha t causehunger.This leads into the world of macro-economics, of international tradingregimes and of government policies in aid, agriculture and finance. These arecomplex subjects, and diff icult to understand. But no-one can hide the t ruth. Nomatter how successful are the projects supported by organisations such asOxfam, the overall war against poverty is being lost. The poor are winning som eimportant battles, with or without outside help. But there are more hungrypeople in the world today than there were a decade ago.Poverty will not be defeated jus t by tac kling it at the m icro-level, im portant asthis work is. To stem the m oun ting tide necessitates attack ing the root causes

of poverty at the ma cro-level.This book seeks to explain some of those international root causes, and tosuggest how they could be tackled. It addresses the role of Westerngovernments the British government in particular in contributing to thisendeavour.Clearly the causes of poverty are by no means the monopoly of Westerngovernments. There are many contributory factors. Governments, landownersand business elites of Third World countries themselves have the ultimatepower to decide how wealth is shared amongst their peo ple. All too o ften theyannex benefits of economic growth for themselves and show scant interest inthe welfare of their poor. Wh ile some governmen ts are progressive and caring,others rarely seem to act in the interests of their people. Transnationalcorporations in their turn wield enormous power over farming systems,employment and trade in developing countries and so control the destiny ofmillions of people. And the Soviet bloc has immense influence in manydeveloping cou ntries.

Each of these issues could be the subject of a further book, so the focus ofthis book is deliberately restricted to the role of the British and other Westerngovernm ents. Although only part of the pictu re, it is a part where we can at leastexercise some influence.Vishnath's death is over ten years ago now. I stil l remember it clearly, butsometimes it seems rather removed from the complex world of politics andinternational trade . The two are con nec ted, I know. His fate lay in the fac t tha the was an unequal partner in international trade. It seems to me that, forVishnath, the problem lay in a sudden shift to export food that had previouslybeen a staple of the poor.

This book seeks to show how our daily lives in Britain are intertwined withmil l ions of people l ike Vishnath. We may not see them, but they are ourneighbours as surely as if they lived in the next street: how we lead our livesaffec ts the way they are able to lead the irs. That is why we must look c arefullyat B ritish policies tha t affect the Vishnaths o f this world , and see what can bedone to improve the supply of jus tice .


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INTRODUCTIONSetting the SceneNo-one needs reminding of the fam ine in Africa. In 1986 several million Africanpeople are still severely threatened by it. They have become regular visitors toour homes through TV documentaries. Theirs is the "loud emergency", butfamine is just the tip of the iceberg. Below the surface are more than 700m ill ion people l iving in a state o f m alnu trit ion. One in six of the human race.Fifteen m illion children die as a result of poverty every ye ar.1Every other second another child quietly dies. Theirs is the "silentemergency".The number of malnourished people in Africa has risen from 80 to 1 00 m illionsince 1980.2 South of the Sahara more than a quarter of all children under fiveare m alnou rished. There is record su ffering in a world which has the resources,the knowledge and the technical ability to eradicate hunger for ever. But thiscapacity is not being used. Instead the wealthier countries are pursuingeconomic policies which deepen the crisis of hunger and poverty. Worldeconom ic p olicies, led by the major industrialized co untries, have conspired tosqueeze dry the economies of most developing cou ntries.

Western aid for famine re lief is well pub licised , and deservedly so. Throughpublic goodwill and government action some three and a half billion dollars wasprovided for the African relief effort in 1985. But virtually unreported was thefact that in the same year the 29 poorest countries in Africa paid back to theindustrialised countries TWICE this amount in payments on their debts (seeAppendix I).In 1984 Oxfam launched a new movement "Hungry for Change". This is amovement of British people who find the current levels of world hunger andpoverty intolerable and who believe tha t the action taken by governments suchas our own is woefully inadequate in the face o f such suffering . Moreover themovement seeks to understand, publicise and find alternatives to the way inwhich current economic and trade policies pursued by the wealthier countriesactually DEEPEN this cris is.Through these policies Western governments are exporting our problems ofrecession . As a recent UNICEF survey of a wide range o f countries has shown,the impact of world recession is being passed on from industrialised to

developing countries, then from the wealthier to the poorer people in thosecountries.3 At each step the e ffects are mu lt ipl ied rather than dim inished.An Oxfam survey in Ceara, N. E. Brazil, in 19 83 showed tha t child malnu tritionstood at a staggering 4 0 % as a result of the dual crisis of debt and drought.4


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OXFAM S NEW CAMPAIGN

Celebrity launch of Oxfam's Hungry for Change Campaign In October, 1 9 8 4 .

'Debt and Poverty in Jamaica' a 1985 Oxfam report describes how 40% of allexport earnings of tha t country were consum ed by its debt service b ill and howthis, coupled with the fa llin g world price of bauxite, led to a rise in food p rices,a drop in wages and a sharp increase in malnutrition, with 28% of childrenunder four malnourished.5 Sim ilarly, Oxfam's report on Sudan lists debt as anunde rlying cause of fam ine in tha t country.6Oxfam staff in many countries have linked a rapid escalation of poverty tointernational econom ic policies. But not only Oxfam makes the link . UNICEF, forexam ple, paint this gloomy picture of Ghana:

"The percentage of malnourished children in Ghana has risen sharply in the1980s, now standing at a staggering 53%. In 1984, 56% of Ghana's foreignexchange was spent on debt service, and this necessitated massive cuts inessential imports, hitting health (especially imported drugs and medicalequipment), education (teaching materials) and water supplies (40% of thecountry's w ater supply systems, especially in the rural areas, have broken downfor lack of fuel and essential equipment). The infant m ortality rate in Ghan a,which had been declining over 15 years, has risen from 100 per thousand in1980 to between 120 and 130 in 1985. There can be no doubt that this is acruel consequence of the debt crisis".7 Oxfam's West Africa office echoes th isand says tha t the econom ic problem s have con tributed to a serious brain dra inin Ghana. While there were 1,655 doctors practising there in 1 9 8 1 , by 198 5this number had fallen to 81 7 .8

International economic forces have, in addition, contributed to the followingcatalogue of human tragedies, by weakening and distort ing nationaleconomies, reducing foreign exchange needed for imports and forcing cuts insocial services spending.8


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Brazil an increase in low birthwe ight bab ies and an increasing p ropo rtionof infant deaths result ing from m alnu trit ion. Sri Lanka a marked increase in wasting amongst children since the mid1970s . Costa Rica a doubling of the number of children treated for severema lnourishment over the last three years. Zambia and Chile a 30 - 4 0 % drop in household incomes since 19 80 . Mozambique no foreign exchange for importing essential drugs. Zimbabwe a 20 % cut in social services spending.The problem is not a shortage of food, but an inability o f the poor to buy orgrow enough foo d for a healthy life. It is a problem of food securi tya problemwhich canno t be solved merely by technologica l advances which improve farmyields. Poor people need access to land and inpu ts for food-gro wing. They mu sthave surpluses to store from harvest time until the lean season ; employment sothey can earn enough to buy sufficient food; welfare schemes as a 'safety ne t'.In sho rt, the solu tion to hunger is not so much tech nological as politica l.

This has been recognised by a recent report from the World Bank anorganisation usually more concerned with world econom ic growth than hungerand poverty. "The world has ample food" says the report, "we now need torealise that, in the global sense, and often in individual countries, an adequa tefood supply is no longer the source of the problem . . . from among the manyforces that conspire to leave almost one person in five in today's worldunderfed, one stands out about all others: poverty".9The report goes on to describe new principles wh ich the W orld Bank and otheragencies should pursue if the food security of the poor is to be imp roved. Theseprinciples might mean, "shifting resources from large farms to small farms,from export crops to food crops, from industry to agriculture and from capitalintensive to labour intensive activities".None of this is particularly new. Oxfam and other developm ent agencies havebeen saying much the same th ing for years and the World Bank itself advocatedan 'aid for the poorest' strategy in the early 19 70 s. But now at least some in thispowerful organ isation are once again ca lling for the e radication of poverty and

hunger as a World Bank priority.The immediate human crisis is one of hunger and poverty. But the seeds oftomorrow's crisis perhaps a far worse one are already sown. The rapiddestruction of the environment could have a cataclysmic effec t on gen erationsto come. A population concerned about daily survival, which has to spendseveral hours per fam ily in search of fuel-woo d, is not one which nu rtures andcares for its forests. Governments plagued with crippling interest bills are notcareful stewards of their natural resources. The concentration on export cropfarming and on timber used to offset oil imports is costing the environmentdearly. Each year some 4 0, 00 0 square miles of forest land is los t eq uiv ale ntto the land area of Scotland and Wales. 10 At this rate one fifth of the world'sremaining tropical forests will be gone by the end of the century. Africa hasalready lost half of its forests du ring th is century.Moreover over-working of already eroded land has a heavy cost. The poor


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Each year some 40 ,000 square miles of forest land are lost.cannot a fford to leave land fallow . They canno t afford fertil is er s, and they do nothave the anim als to m anure the land. The soil is not allowed to regenerate andthe protective to p cover is not restored . Water and wind erosion gradually thinthe top so il and every year, world-wide, 80, 00 0 square m iles of once fert i le landdeclines to a point where it will no longer yield any thing. The pressure to survivetoday is creating the deserts of tomorrow.It Is the list of si lent emergen cies which makes it so im portant to look closelyat the policies pursued by Western governments. It is vital to examine theimpact of these policies on the poor of the world and to change them w hen theycontribute to world hunger.

The 'Hungry for C hange' campaign identifies five main policy areas whichneed addressing: government aid policies, international trade, Westernagricultural policies, the handling of the debt crisis and finally the arms tradewith the Third World. Each is the su bject o f one of the follow ing ch apters.

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AIDGetting it RightOne of Oxfam's most experienced partners in Africa, Sithembiso Nyoni ofZimbabwe, addressed Oxfam's national conference in 19 85 . She reminded heraudience that, "Britain didn't overcome its Dickensian poverty of the 19thcentury by a multitude of development projects". European poverty, she po intedout, was controlled by social and economic reform, not by aid .The industrial revolution and rapid economic growth had provided a goodfoundation of national wealth in Britain and Europe in the nineteenth century,but it wasa long series of political disputes, the work of social reformersan d th eorgan isation of Trade Unions that enabled the poor to ge t a larger share of thisnational w ealth. Overseas aid didn't enter the picture.In the 20 th century, however, aid has played a part in overcom ing poverty. Aidfrom the USA the Marshall plan was the key in helpin g war-torn Europeback onto its fee t. But even now aid is a sm all pa rt of the world's economy, andit canno t solve the p roblems of poverty. It can help particula rly with spec ificproblems. But poverty will continue to haunt the world until the underlyingcauses are dealt with. This calls for reforms in the dev eloping countries fora narrowing of the gap between rich and poor, between the powerful and thepowerless and between men and women. And it also calls for internationalreforms, especially in trade and finan ce.Because aid necessarily has a limited role, it is particularly important totarget it carefully at the needs of the very poor.On the whole aid through the voluntary agencies is more successful atachieving this than official aidthe aid given by the richer governments.Official aid, however, is about seven times the volume of voluntary aid, so it'simportant to get it right.

Official aid and developmentThe wealthier coun tries of both East and West and most OPEC countries have agovernment aid budget. These funds are given (or occasionally lent atsubsidised interest rates increasingly uncommon for British aid) togovernmen ts of poorer coun tries. The aid ma ybe given directly (bilateral) or viaan international or 'multilateral' agency such as the World Bank, the UNagencies and the EEC. A small proportion of it may be channelled throughvoluntary agencies such as Oxfam or through international research institutes,

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but the rest goes to overseas governments for agree d'deve lopm ent'sche me s.The word 'developme nt' covers a m ultitude of ideas not ju st the relief ofpoverty. Recent British government aid grants demonstrate this variety.1 1 9 0 mil l ion went for emergency relief in Africa from 1 9 8 4 -6 . 6 5 m illion provided Westland helicopters for India. 2 .2 m illion he lped extend the primary health care service to poor people inthe remoter parts of Orissa State, India. 7 m illion bu ilt a new hosp ital in the Falkland Islands . 1 8 m illion paid for a new repair yard to replace the naval dockyard inGibraltar.

'Development' in official aid language is more about economics thanpeople. Helping people break out of poverty is 'development', but so too areschemes, such as airports, that help the Third World elite. These schemescontribute to economic growth and so, the theory goes, the country as a wholebenefits not just the elite. It is Oxfam's experience, however, that thebenefits of this sort of 'development' rarely reach the poor unless thegovernment in question is determined to make this happen, or unless thedevelopment scheme is carefully designed to reflect the needs of the poor.Oxfam is concerned with peop le, not economic indicators such as per capitalGross National Product (GNP). Life expectancy and nutrition standards aremuch more important than balance of trade statistics. History shows that it isdiffic ult to achieve better living standards for the poor withou t the found ation o fa reasonably healthy national economy. But national prosperity by no meansautomatically leads to individual survival. Desperate levels of poverty co-existwith opulence in some of the world's wea lthier countries, such as South Africa.The poor need jus tice as much as they need economic grow th.The key problem is tha t o fficia l aid to a very poor country may help the e litewithout touching the poor. It may even leave the poor worse off, for instancewhen farm mechanisation puts labourers out of work. In the same way aid canwiden the gaps within the fam i ly. Aid projects based on the assump tion that th ebenefits will automatically flow equally to men and women almost inevitablyfind tha t the men annex most of the gain.'Getting it right'involves learning from past experiences of aid successes andfailures . But above all it involves decid ing that the purpose of aid is to h elp thepoorest men and women . And that is a political choice.

British aidBritain's aid is handled by the Overseas Development Administration (ODA)under the Minister for Overseas Development.Bilateral aid accounts for about 6 0 % of the budg et, and mu ltilateral aid about40%. The use of bilatera l aid is mu tually agreed between the two governm ents12


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Desperate poverty co-exists with opulence a shanty area on the fringes of Recife,Brazil.

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donor and recipient. Aid is a shared respon sibility, but the donor holdingthe purse strings inevitably wields a lot of power.Most bilateral aid is 'tied' that is, given in the form of British goods orservices (such as a con tract to a British con struction company to build a road).A serious criticism of tied a id is tha t n ot only does it encourage concentrationon large projects and inappropriate aid, but it can also help bolster upinefficient British companies. It is estimated that the tying of aid reduces itsvalue by 20 -4 0% . 5 The remainder of bilateral aid is 'untied ' in cash. Most ofthis would be spent within the developing country as 'local costs', such aspaying for an agricultural trainin g schem e.

Quantity of aidWhile hunger pe rsists, can aid ever be enough? It is impossible to walk throug han emergency feeding centre in Ethiopia and believe that governments of the

Case Study SudanSudan Is one of the poorest nations on Earth, and faces a chronic problemof hunger. Any aid particularly supporting agriculture would appearto make sense.However, a 1986 Oxfam report, 'Sudan: the Roots of Famine',describes how Sudan is a very divided society where certain help toagriculture can hurt the poor.2Sudan has been the scene of many aid funded large Irrigationschemes, notably the Gezira project, and more recently the Kenana sugarcomplex. These schemes open up tracts of land, once used for grazingcattle, to modern farming. The original settlers are cleared off the landand often the traditional routes followed by nomads are blocked off. Thefarming methods are highly mechanised, and very few of the displacedpeople are able to earn wages from the scheme. One tractor, probablypaid for by aid, takes the Jobs of several people.Instead, the elite benefit. A sm all band of wealthy farmers usuallyretired soldiers, businessmen and merchants are able to make afortune, often with the help of foreign a id. The environment is degraded,as trees are hacked down to give way to more fields, and most of thecrops grown are sold in the cities (sorghum) or exported (cotton andgroundnuts). Poor peop lewho get no employment from these schemes simply cannot afford the high prices fixed by the powerful cartel ofgrain merchants.

The monopoly of these merchants has been strengthened by the recentfamine. In 1986 the EEC decided to buy famine relief food In the foodsurplus areas of Sudan rather than supply European food aid, as had been

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world are doing 'enough'. But aid is just one of the many claims on agovernment's lim ited power to spend. So perhaps the question sh ould be, "whatpriority does our governm ent give to aid, and how does this compare w ith othergovernments?".The usual measurement for comparing the size of governments' aidprogrammes is the percentage of the country's Gross National Product (GNP)given as aid. There is a recognised target set by the United Nations of 0.7%GNP, yet reached by very few cou ntries .The British government m aintains that its official aid programme (accountingfor 0.34 % of GNP) compares favourably with tha t of other Western governmen tsin the OECD (the average was 0 .3 5% in 19 85 ). This com parison is defec tive ontwo counts.Firstly, it ignores the fact that British aid levels since 1960 have been wayahead of world averages and that since 19 79 they have fallen steeply as worldaverages have been maintained or even increased. Chart A illustrates the riseand fall of UK aid.

done the previous year. This was a move welcomed by Oxfam. But Oxfam'srepresentative In Sudan quickly saw that the commercial elite of KassalaProvince and elsewhere were making a fortune selling grain to the EEC atInflated prices.

3This strengthens the hold of the elite, and yet theirfarming methods are very Inefficient. Large surpluses were produced onlybecause of the vast areas farmed. Again, aid has helped a farmingsystem which excludes the poor.

The British government has started funding the Equatorla RegionalAgricultural Programme designed to help smallholders, but It accountsfor a minute proportion of the Sudan aid programme ( 5 million In 19 84).From 1 9 8 0 -8 4 UK aid to Sudan totalled 1 54 million, of which nearlyhalf (74 million) was spent on building a power station for the capitalcity, Khartoum.4John Selwyn Gummerthen Conservative Party Chairmanadmittedin a TV interview that V e don't like such schemes", but argued that it Isfor such projects that Third World governments seek funding.Since the debt crisis began to bite in the early 1980s and theInternational Monetary Fund (IMF) imposed austerity measures oncountries which could not keep up with their debt repayments, the poorhave become poorer. Subsidies on food or fuel were cut and governmentspending on social services pared back.Against this background existing official aid practice appearsInadequate. The main emphases are Irrigation schemes, mechanisedfarming, dam s, roads and urban electricity supplies which have no directrelevance to the people living in famine prone areas.

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Chart A% GNP allocated as aid (net disbursements) 1 96 0 -19 85

0 . 7 -

0 . 6 -

0 . 5 -

0 . 4 -

0 . 3 -

% GNP UKWestern W orld Average (DAC)

0.21960 '65 70 7 3 74 75 7 6 7 7 7 8 79 '80 '81 '82 '83 '84 '85

YearThe 'Western World Average' is the average of the m ember states of the De velopment AssistanceCommittee (DAC) of the Organisation for Economic Co-operation and Development (OECD).

But even this picture is deceptive, because the World Average figures giveundue prominence to one country. The USA is such a huge economy that adecline in its aid programme as we've seen in recent years giv es the falseimpression tha t the whole Western world is turning against aid . Chart B showshow British aid compares with the average for the Western world less the USA(0.45% GNP in 1985). It shows how other Western nations have steadilyincreased their aid levels since the early 1970s and how British aid was aheadof the f ield from 1976-79, but has fallen dramatically behind since then.Superimposed on the sam e chart is the average for other cou ntries in the EEC.This comparison makes the British performance appear all the moredisappointing. While our closest political and economic allies have seen fit toforge further ahead of world averages in terms of aid performance. British aidhas taken a nosedive.16


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Chart B% GNP allocated as aid (net disbursements) 196 0 -19 85

0.7 -

0.6 -

O.5.-

0 . 4 -

0 . 3 -

% GNP UKWestern W orld Average (DAC) less USAOther EEC

0.21960 '65 70 73 74 75 76 77 78 79 '80 '81 '82 '83 '84 '85

YearSource: OECD data; 19 60 -1 98 3 , OECD Development Co-operation (various issues); 1984, WorldBank World Development Report 1985; 1985, ODA, 1985 Annual Report.

Britain would have to increase its aid programme by 70% in order to comeback in line with the EEC (0.58% GNP in 1985). Furthermore, ourCommonwealth allies (Canada, Australia and New Zealand) are also beatingBritain, giving an average of 0.4 8% GNP as aid in 1 98 5.Britain's aid has been cut dramatically in comparison with other Westerncountries. In money terms the aid programme sounds large. In the financ ial year198 6/7 the net budget is 1 ,18 7 mil l ion . But this is less than 1 % of thegovernment's overall budget and is a level which has fallen in real terms byabout a fifth over the past seven years.As Third World poverty has deepened, British aid has been cut backsignificantly, although after a record breaking mass lobby of Parliament inOctober 1 98 5 the aid budget was revised upwards by 1 7 m illion . This was awelcom e sh ift, but nowhere near enough to make up for seven years of cuts .17


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Campaigning for Increased British overseas ai d a record-breaking lobby of ParliamentIn 198 5 .Ironically the fam ine in Afric a wh ich did so much to increase the awarenessof the general public se rved to reduce the budget for long-term development.Thousands of people wrote asking the government to give more famine reliefand there were several parliamentary debates. The Aid Minister responded tothis pressure w ith a series of emergency g rants. But this was not, on the whole,new money. It came out of existing aid funds intended for developmentelsewhere rather than emergency relief.The all-party Foreign Affairs C ommitteeof the House of Commons criticised the government on this point, arguing tha tcentral government contingency reserves should be used to help tackle suchmajor disasters.6 One result of the shift in aid to African fam ine relief has beenthe sharp decline in UK aid to other reg ions. In particular, aid to the Indian sub-

continent fel l from 2 37 mil l ion in 198 4 to 1 93 mil l ion in 19 85 .QualityThe quality of a id is even more im portan t than the qu antity. The crucial qu estionis , how effectively does aid improve the living standards of the very poor? InBritain its effec tiveness is reduced by a conflic t between the ideals of relievingpoverty and British self-interest. In particular: political concerns influence how much aid goes to which countries; commercial interests determine the form of aid given and the nature ofprojects suppo rted; emba rrassing agricultural surpluses determine how EEC food aid is given.18


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Political interestsAll governments use political criteria in alloca ting aid. In the case of Britain this'politicisation' is exaggerated by its colonial connections and overseasdependencies. Hence in 1985, in spite of massive public and media concernabout famine in Africa, Gibraltar, with a population of about 27,000 receivedalmost as much UK aid as Ethiopia, with 40 million people, mostly extremelypoor. In 1985 the Falkland Islands received the equivalent of 5,500 perperson of UK aid, while India received 15p per person. While it may be the casethat these B ritish Dependencies need the facilitie s provided, the costs shouldnot be charged to the overseas aid budget.For political and commercial reasons, more British aid has gone to wealthiercountries such as Turkey, M exico and the Philippines during the 1 98 0s tha n toa number of more obviously needy countries.Political criteria can be seen most clearly in the case of Central America. Adecade ago Britain gave considerable aid to the Somoza dictatorship inNicaragua. Now, since the change in regime, that aid has been all but cut off.Costa Rica and Honduras received respectively 40 times and 87 time s as muchUK aid per person as did Nicaragua in 1983 , and the disparity was even greaterin 1984 .9The ODA has stated a policy of, "a greater focus of aid... where local policiesseemed likely to be supportive of aid efforts" 10 and has recognised thatNicaragua has "a good record of spending development aid".11 Oxfam hasconsiderable experience of the effectiveness of humanitarian assistance inNicaragua, but in spite of this the country is effectively denied British aid.It is true tha t Nicaragua is not one of the poorest coun tries in the world, andit could be argued that other countries are more in need of aid, but there aremany countries wealthier than Nicaragua w hich do get substan tial British aid.Moreover, the des tabilisation and destruction caused by the con tinuing g uerillawar has meant that many communities in Nicaragua face immense hardship.Despite political difficulties, there is plenty of scope for humanitarianassistance, and in Oxfam's experience, the Nicaraguan government is doingmore to help its people than many other governments to whom Britain is moregenerous.Similarly, the British government is unwilling to give aid to Kampuchea.Again, there are difficult political obstacles. The United Nations continues torecognise a government in exile, formerly led by Pol Pot, as the legitimateleaders and sees the ruling government of Heng Samrin as a Vietnamesepuppet. But desp ite the obs tacles , the u rgent needs of the Kampuchean peop leshould dictate a generous hum anitarian response.In Ethiopia the British government abandoned development aid in the late19 70s because it was perceived as ineffective and simply sup porting a Sovietstyle government. However, even in such circumstances it is possible to usedevelopment aid in ways that benefit the poor, and do not 'prop up' regimeswhich are not favoured by the British governm ent. Oxfam put forward a proposalfor this type of development aid to Ethiopia a proposal welcomed by the UK

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ambassador in Addis Ababa.12 Eventually the government did agree to a 3million programme similar to that outlined by Oxfam, concentrating on ruralwater supplies, se eds, soil and water conservation and farm to ols .Because so much UK aid is allocated according to p olitical criteria, there islittle left over for the poorest countries which have less political or commercialclout. So UK aid to the so-called 'least developed' coun tries, like Bangladeshand Tanzania, fel l from 0 .14 % of GNP in 1 9 8 1 to 0. 08 % in 19 84 .1 3 Total aidfrom all countries to sub-Saharan Africa has stagnated at $9 billion per year,while debt repayments have risen from $ 2. 3 b illion to $8 b illio n. 1 4

Commercial interestsThree quarters of British bilateral aid is ' t ied' to UK goods and services.Naturally, if an aid programme requires imported machinery, and a suitableBritish p roduct is available at a com petitive price, the ODA would want to supplythat rather than, say, a Japanese alternative . Many tools, p umps , spec ialisedequipment, metals, fertil isers, vehicles and spare parts need to be imported.Som etimes research workers or tech nica l expertise need to be broug ht in . All ofthese can be provided by official aid and they provide jobs and contracts inBritain too. But at present there is such a heavy emphasis on tied aid that theaid programme appears to be more concerned w ith suppo rting ailing sec tors ofBritish industry than the Third World poor.

Britain was criticised recently for tying more of its aid than other donors, butthe knots are being tied still tighter.15 In March 1986, for example, a 65million aid deal was finalised with India for 21 Westland W-30 helicopters,intended for offshore oil exploration work. Each one of these helicopters costsmore to the aid budget than the whole development programme for E thiopia.The Indian government did not want to accept this aid but agreedreluctantly when told that they were un likely to get the aid otherwise. It was thehelicopters or nothing.The scheme was dislike d by many within the ODA. None theless, it came abou tbecause the government wanted to help the ailing Westland company. 65million (more than the annual b udget of Oxfam) was spent a t a strok e.Oxfam staff in India have argued tha t other UK aid sch em es, such as airpo rtsurveillance equipment and the provision of a new traffic light system inCa lcutta, are low priority fo rth e m illions of people who are stilt hungry in India.If official aid simply couldn't help the poor it wouldn't be so bad. Butelsewhere in India there are innovative ODA schemes for improving healthservices (Orissa), for improving nu trition (Gujarat) and for increa sing the yieldsof small farmers through improved fertiliser use (East India). Aid such as this,especially in the form of local costs , can 'reach the parts other aid doesn't'. It isthis kind of aid not he licop ters tha t m ost taxpayers w an tto see their moneyspent on. It is'Real Aid'.The most com mercial aspect of British aid is the so-ca lled Aid Trade Provision(ATP) in essence a subsidy fo r UK exporters .ATP was created by a Labour government in 1978, but has been greatly20


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Enough Said?Frankly, there's been m or e t hanenough said about Wesfland over the pasl H e ! i c o p t e r C o r p o r a t k 3 n o f l n d i a b a i i i e e f f e f ^ . T h r e e y e a r i n e ^ i a t k ) n Blew months over, two years of manufacture is about to begin. For an order worth ove rThis ad is no) about polit ics, it's not about recrimina tions, it's simply about 65 mil l ion,success. Wha is more, success lor the newly recapitalised Westland pic. Ai the momen t we've lit t le else to say (And anyway, if you 'll excuse us,Two days ago the contract signed recently, to supply 21 Westland 3(ft to the we've got work to do.)

WESTIANDW pic* o v i England

This advertisementwhich recently appeared in the national press totally falls to mentionone fact: far from being a triumph to Westland salesmanship, this 6 5 million order wasalmost wholly paid for not by the Indians but by the British aid budget. Enough said?Source: WDM, Spur, May 1986.

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expanded in recent years. A company, seeking to win a lucrative contract in adeveloping country say to build a steel m ill can apply to the Departmentof Trade and Industry (DTI) for help. The DTI may estimate that perhaps 10million will clinch the deal against a foreign competitor. The DTI thenapproaches the ODA to ask for an ATP subsidy. The ODA usually has to make asnap judge me nt, having no time to look at the social aspects of the project.As the former head of the ODA, Sir William Ryrie, has said of the ATP, "theborderline between aid to developing countries and aid to British industry issometimes hard to find".16Examplest)f ATP projects agreed in 1 98 4 include 3 3 m illion for a GEC builtpower station in India, 5 .3 m illion fo rth e UK con struction g iant, UKAG, to bu ildan airport in Sri Lanka, and 6 .7 m illion for power lines in Jordan and Indonesia.A TV documentary in 1 98 5 described one ATP project. A Midlands companyWil lowbrookwon an ATP funded con tract to supply bus bodies and chassis to

Zambia. This was against the advice of British High Commission staff inZam bia, who though t that the buses wouldn't stand the rough road cond itions.They were right. The buses broke down very quickly, the Zambian governmentwas furious, but the company had by this time gone into receivership.Food aid good and badIn the summ er of 1 98 4 Oxfam made its largest ever grant for sending a shiploadof food to Ethiopia, announcing at the time that it was takin g this step to shamethe B ritish and other governments into com mitting relief aid to a major fam ine.But it was not until November of that year, when harrowing pictures of thefamine made the hea dlines of TV news bulletins and a public clamour arose,that major international relief efforts were launched by governments. In thewords of Foreign Office Minister, Tim Eggar, "the famine had become adom estic political issue"\o which the government had to respond.The British government took the lead in mounting a concerted EEC food aideffort in December 1984. Though dwarfed by the scale of the famine, thisemergency food aid undoubtedly saved thousands of lives.

Food aid such as th is is vitally need ed, but in other circums tances it can be ahandicap for the poor. The bulk of food aid is not used in emergencies a nd, asa former head of the ODA said, 7s frankly more a means of disposing ofEuropean agricultural surpluses than of helping the poor".17Food aid is the su bject o f lively deba te. There are four princ ipal issues:Speedthe EEC responded only slowly to the fam ine in Africa. Oxfam and otherorganisations had warned of impending famine, sophisticated 'early warningsystems', contributed to by British government funds , had been signalling a redalert for many months, but it was only when television brought the famine toeveryone's homes that governments began to take serious actio n.Even when it is decided to provide food aid, EEC procedures are often veryslow. Oxfam staff in Mali , for instance, describe how food aid arrived up to fou rmonths late. By the time it arrived, it coincided with the best harvest for five22


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'Real Aid' such as support for community health programmes 'reaches the parts other aiddoesn't'.

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years. As there was then so much food available, market prices remainedextremely low and the poor farmers were h it. 18A similar picture emerges from Burkina Faso, where Oxfam staff report thatwith food aid still on sale in the markets, producer prices have been held downand warehouses are bursting with grain.Oxfam has recently issued a report proposing an important series of reformsto EEC food aid procedures so that there is a much swifter response toemergencies in future.19 The former UK Aid Min ister has given his pe rsonalsupport to the majority of these proposals.Food aid use th e EEC's annua l food aid programm e is very large , but in mostyears only about a tenth of this goes to famine relief. The bulk is given togovernments who sell it commercially or use it in state institutions such ashos pitals. Little goes directly to the poor and in fact can actually harm the m . Inforcin g local food prices down, food aid can make life difficu lt for small farme rs,and can encourage Third World governments to place less emphasis onimproving their countries' ag riculture.

However, there is no clear-cut answer to these problems. Some countries,particularly in Africa, are dependent on food imports, and if they can get themfree through food aid, this clearly saves precious foreign exchange. The keyrests in providing food aid as part of an overall food strategy for the country inquestion, designed to help strengthen, not undermine, the local farming andma rketing structures. EEC aid is now beginn ing to move in this d irection .Country allocation at present the distribution of food aid bears little relationto need. In 198 5 the peak famine year only about 2 0 % of the EEC's foodaid went on fam ine relief, and Egypt received more EEC food aid than Ethiopia.Quantities and kind the amounts of food aid given are strongly related to theEEC's problem o f food mo unta ins. Half the value of EEC food aid, therefore, isnot wheat or other basic grain, but milk powder and butter oil, which generallyproves to be inappropriate. In spite of all such evidence, the EuropeanCom mission has recently proposed an increased share of dairy produce in foodaid. In June 19 86 , however, the UK Aid Min ister citi ng Oxfam evidence announced his intention to use his influence within the EEC to reform food aidand in particularto 'de-link' it from th e EEC problem of agricultural su rpluse s.20

OpportunityOfficia l a id can help the very poor. But it can also crea te problems for them. Orit can exaggerate existing imbalances within their communities, notablybetween men and women. Given the problems, how can official aid be mosteffective?Involving the poorIn Oxfam's experience the key to effective aid and this applies equally toofficia l and non-governmental, orvoluntary, a id is devising schemes that the24


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poor themselves see as the answer to their problems. This means consultingpoor people in the design and execution of projects, and working with localstructures that g enuinely represent the m .'Popular participation' is a favourite slogan of development workers today. Itis easy to claim as a principle, but it is immensely difficult to achieve evenfor non-governmental organisations like Oxfam. For official aid agencies it isvery much more difficult, because they channel aid largely to Third Worldgovernments who, understandably, dislike strings and conditions beingattached. Targeting and involving poor people may seem a reasonablecondition for aid, but to governments it can often appear as unwarrantedinterference. For example, they might not wish to allow a donor government tosend in people to discuss future projects with poor communities because itwould represent an abdication of local governmental respons ibility.Official aid should form a 'partnership for development' with a Third Worldgovernment. In a scheme such as providing credit to poor farmers this mightmean strengthening existing structures; extending bank or co-operativeservices for example, or it might m ean creating new structures vill ag e basedrevolving loan schemes, perhaps. Either way, it would have to be a jointundertaking between the two partners. In some countries this is easier toachieve than in others. Some governments are 'pro-poor' and have adecentralised approach which favours this type of partnership. Others arecompletely hostile to such ideas. Most fall somewhere between, with someprogressive ministries or departments which can be persuaded to employ the'partnership' app roach.The sta rting p oint is to agree that a major proportion of officia l aid shou ld bespent on projects which directly alleviate poverty. In December 1985 Britainand India reached an important agreem ent that at least 2 0% of all cash aid toIndia should be as local costs for this type of project. 21 However, in any suchagreement, the problem remains of how best to con sult and involve poor peoplethemselves. Heeding only the advice of existing leaders may do no more thanto reinforce the power of a local elite. Official aid projects which have beensuccessful in reaching the poor have often sta rted by crea ting new mechanismsfor involving people, such as village meetings and women's groups, but thistakes tim e and great care. Local voluntary organisations can usually he lp, butit is important not to overload these groups, distort them into bureaucracies orotherwise corrupt the m .As many officia l a id agencies try to do m ore to he lp the poor directly, popularparticipation will become an increasingly important area of debate andexperiment. It could prove to be the meeting ground between voluntary andoffic ial agencies which both describe their work as aid, but u ntil now have beeninvolved in quite different processes.Women in developmentListening to the voice of the poor by itself is not enough . Usually, that is a malevoice. Development projects which improve the economy of a community may

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well b ene fit the men but leave the women and ch ildren worse off than before. Aclassic mistake of development is to assume that the poor live in nuclearfamilies and that to benefit the male head of the household is to benefit allmembers of the family. In reality there is usually a tremendous wealth gapwithin the family. The men own the property and eat better. A developmentapproach that assumes the 'household' as the unit of development also doesnot recognise that more than one third of all households are headed by women.

Projects which offer employment may encourage men to move from theirhomes, leaving the women to look after the c hildren and household and earntheir keep . Agricultural schemes may encourage production for sale rathe rthandom estic use. In these examples, the m en will receive the cash and frequentlyvery littl e goes to other m embers of the fam ily. An Oxfam paper on this subjec tdescribes the frequent occurrence of m alnourished women and children whilethe m en sport new clothes, bicycles and radios. 22Malawi is often quo ted as a shining example of developmen t. It has achievedconsiderable growth and economic reform. Yet only 4 % of its women can readand write , and it has the fifth highest infant m ortality rate in the world.If a development project is to be relevant to women, they too must beconsulted and actively involved in the project. However, social and culturalpractice often makes it difficult for development workers the majority ofwhom are men to meet the women of a comm unity. Priorities for both officia land voluntary aid agencies are to appoint more women staff, to explore allavenues of consulting with poor women and to devise more projects which

specifically address the needs of women. For example, in most developingcountries women do the majority of the farming, yet few receive training or

If a developm ent p roject Is to be relevant to wom en, they to o must be consulted.

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support from existing projects. Experience shows that when women areinvolved, not only are the projects more successful, but the benefits go to allmembers of the fam ily, especially the children.In Zambia Oxfam funds agricultural training and advice centres for womenbecause existing services effectively exclude them, although 40% of ruralhouseholds are headed by wo me n.23

Basic servicesBasic human needs are often neglected in favour of prestige urbandevelopment schemes. This is particularly acute in Africa, according to Unicef,since the overall economic diffculties of that region have led to a seriousdecline in basic services such as health and educa tion.24 Unicef calls for a 'f loorunder poverty' approach so that al l, however poor, have access to he alth care ,water supplies and basic ed ucation. S imple measures exist which could havesaved millions of lives; immunisation against the major killer diseases,treatment of diarrhoea with salt and sugar rehydration solutions and a smallrange of essentia l drugs. The infrastructu re needed to support these measures health and education services in even the remo test areas, for example is,however, expensive to set up and maintain; beyond the reach of many poorcoun tries. Much m ore official aid should be used to estab lish these vital basicservices.Agricultural developmentThe famine in Africa has sparked off a timely international debate aboutwhether officia l a id is do in g enough to prevent hunger and whether it could domore. The House of Commons Foreign Affairs Committee has called on theBritish government to increase this type of aid. The government agreed that itwas im portan t to respond to the 'changing needs of Africa' and the Aid Ministeragreed on, "the importance of doing all we can to help the smaller farmers inAfrican countries and in other parts of the world who face difficulties". One ofthe main challenges for future UK aid, he said, 7s to look much more closely atwhat can be done to revitalise peasan t agriculture".This is an important policy stateme nt. Up until 19 84 the trend in British aidcertainly wasn't in this dire ction. In 1 98 4 only 1 6% of UK bilateral aid went toagriculture. The All Party Parliamentary Group on Overseas Developmentpublished a report in 19 85 called 'UK Aid to African Agriculture', which showedthat the real value of such aid had fallen by about one third between 1 97 9 and1984.2 7 The report also revealed increased commercial criteria, diverting aidfrom direct benefits (such as crops, livestock and forestry) towards indirect,infrastructural a id, such as roadbuilding by British construction industries.Moreover, the tendency is to focus aid on the more productive areas ratherthan the vulnerable regions. For example in Sudan considerable UK aid hasgone to a massive irrigation scheme in Gezira, producing mainly cotton, ratherthan on sma ll-scale irrigation for subsistence farm ing in the famine prone areas

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of Darfur and Kordofan. Small-scale irrigation can help increase staple foodproduction and is of immense benefit to subsistence farmers. But official aidusually favours the jumb o schem es. So, although two thirds of all irrigated landin sub-Saharan Africa is found in Sudan, notably in Gezira, large areas of thecountry are gripped by fam ine .28The All Party Group report showed that two thirds of UK aid to Africanagriculture and rural development goes on roads, paper and rubber schemesand a further 10 % to support sugar, coffee, cocoa and tea developments. Thiscompares with just 1.5% for the livestock sector and 1 % for rural watersupplies.Comm ercial crite ria, says the report, draw aid away from rural dev elopm enttoprestigious urban schem es. Hence the largest slice of UK aid to Sudan in recentyears ( 74 million) went to the buildin g of Khartoum power statio n.ResearchSome major advances have been made in recent years, with British scientificcontributions, in improving crops for suitable for drought prone areas. But theUK aid funding for this work has slipped backwards. The ODA funded TropicalDevelopment and Research Institute has had its budget slashed in recent yearsand fund ing for important international research institutes has stagnated at alow level (4.5 million in 198 4) .2 9 Oxfam's representative in Ethiopia points outthat, "the Addis Ababa-based International Livestock Centre for Africa onlyreceives 220,000 UK aid and ironically contributes more than this to Britain ingoods and services bought here".A team of sc ien tists at Kew Gardens set up a 'Survey of Economic P lants forArid and Semi-Arid Tropics' to develop improved varieties of traditional staplefoods consum ed in drought prone regions. One of the plants the team is workingon is nicknamed 'green glue' which, say the scientists, could help reclaimdeserts. The plants grow close to the ground in arid wastes and bind shiftingdesert sand together to reform soi l . "What is needed now", says the Kew ChiefScientist, Mr. Lucas, "are field trials with backing from governments". Initiallythey were promised government fun ding , but later this de cision was reversed.Rather than see the programme collapse , Oxfam has stepped in with fund ing.Similarly, at the height of the Ethiopian famine, Oxfam made a grant to WyeCollege to safeguard c ontinuin g research on t'eff, a staple food in Ethiopia.In 1 98 4 the ODA supported only one research project on millet th e staplefood of millio ns of the poor in many parts of Africa. The ODA provided 1 4 ,0 0 0 .Twice this am ount was spent on tobacco re search. 30The government has made a number of statements recently about theimportance of scientific research in combating famine, and some new grantshave been made. Whether this represents a lasting change in aid priorityremains to be seen . To be effective increased suppo rt should be in the form oflocal costs for overseas based research centres, and for employing local staff.The research undertaken sho uld be determined after careful consu ltation withthe communities involved.28


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Aid via the World BankThe World Bank is the world's largest funding source for agriculturaldevelopment. Britain provides about 8% of these fund s, and has considerableinfluence within the World Bank. The EEC countries as a bloc have a votingpower exceeding th at of the USA.The World Bank is often accused of favouring large-scale developmentschemes which are not in the best interests of the poor. Since 19 74 only 16%of World Bank agricultural aid to sub-Saharan Africa was spent on rain-fedcereal growing, though the majority of Africa's farmers have no access toirr igation. 31In its recent report 'Poverty and Hunger', however, the World Bank hasindicated that it may have been wrong in the past.32 It has made similarstatements before, but in recent years it had rather turned its back on the'poverty focus'. This new policy is encouraging, but it remains to be seen howeffectively it is implemented.

Other ways of helping the poorAgricultural development relevant to the poor farmer in vulnerable areas isnow widely argued to be a major priority for aid . Although it is importan t, it canonly be one strand of an effective attack on poverty and hunger. Not all thehungry are small farmers, nor live in famine prone areas. The majority of the

poor in Latin America, for instan ce, live in urban shanty town s. And in countriessuch as India and Bangladesh most of the rural poor either have too little landor are landless labourers who w ill not necessarily benefit from improvements infarming. In Africa, too , agricultural development by itse lf won't cure the p roblemof hunger, disease and poverty. Other ingredients are vital too, includingenvironmental protection, cre ating jobs in both the cities and the rural areas,bringing safe water supplies to the poor, improving education and healthservices, health and nutrition ed ucation and welfare schemes such as low-pricefood distribu tion at time s of severe hardship.One way of reaching the poor is through special c redit schemes or communitybanks. Poor people are often unable to get bank loans because they can offerno land or assets as sec urity esp ecia lly in the case of women and they mayalso be hampered by illiteracy. They are jus t as likely to have ideasfo r improvingthe ir income as wealthier people, but usually cannot borrow the money requiredby these schem es, or can only do so from a money-lender.In Bangladesh local Oxfam staff report that traditional money-lendersfrequently charge interest rates of 10-20% a month. Oxfam is funding manyvillage banks, and providing the necessary credit for a range of initiative s, frommaking fishing nets to duck rearing. These schemes often have separate

channels for lending to women to help them overcome the traditionaldifficulties they face in obtaining credit as well as giving them greaterindependence and con trol over their income.Official aid can be used in a sim ilar way. The Grameen Bank in Bangladesh 29


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supported by the International Fund for Agricultural Development, a mu ltilateralaid agency has a good record of providing credit to landlesss men andwomen.PitfallsAid that may be intended to help the poor by helping the economy of theircountry to grow, or even aid tha t is intended to be ne fit the poor direc tly, can endup caus ing hardship and poverty for many.The World Bank, for example, is funding a number of schemes in remoterparts of Brazil which are intended to improve the country's economy, offerthousands of jobs, produce cheap power and improve communications. All ofthese objectives may be achieved, but the native people of those regions willsuffer loss of livelihood and destruction of their environment.

In the tribal belt of Gujarat state , India, many families effectively lose their land whenthey need to borrow. The money-lenders Insist on taking over the use of their farms asInterest. One man, Kalvara, from Vangad village, had borrowed money for drugs tocombat a creeping paralysis following a bout of malaria . The drugs didn't work, leavingKalvara destitute and crippled. Many others In the same area had also lost the use oftheir land. Oxfam lent the capital needed to start a 'village bank' In the area, whichquickly replaced the traditional money-lender. Kalvara and others borrowed from thebank at very low Interest, paid off the money lenders and regained their land. Others Inthe village helped farm Kalvara's land while the use of his legs slowly returned. Now heis back on his feet again.

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The 'Nordestao' scheme, for example, embraces a number of hydro-electricprojects w hich, as Oxfam field s taff a rgue, will have, "serious implications forrural populations occupying lands to be flooded".33 The 'Polonoroeste' project a major road building and land development scheme is opening up part ofthe Amazon region of Brazil to large ranch and esta te owners. But it is clearin gout the forest dwellers in the process.In other parts of the world Oxfam staff te ll sim ilar s tories.The World Bank funded Narmada dam project in Gujarat, India, will displacetens of thousands of families living in the valley to be floode d. At the time ofwriting a question mark hangs over their future. Promises have been made toresettle them properly, but the firs t to be moved have received virtua lly no help.A compe nsation agreemen t has been reached between the Indian autho ritiesand the World Bank, but it remains to be seen how this will be applied inpractice.

The Worid Bank-funded Narmada Dam project In India will displace tens of thousands ofpeople living In the valley to be flooded .

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The ODA-funded Social Forestry scheme in Karnataka, India, was intended tobenefit the poor by planting trees for fuel-wood and animal fodder. In someareas it is welcomed by poor, landless women, but in others the scheme hasconcentrated on trees such as eucalyptus that provide pulp for Mysore papermills, but which, the local poor argue, do not provide the fuel-wood or animalfodder they need.An ODA-funded scheme in Cajamarca, Peru, helped a major multinationalfood corporation introduce dairy farming. The scheme provided loans andveterinary services which encouraged s mall farmers to invest in dairy cows. Thecompany was the sole purchaser of the milk produced and deducted loaninstalments from the payments to farmers. The price of milk fell steeply and thepoor have found themselves in a poverty trap. They can't sell their cows andreturn to shepherding because there's no market for dairy cows. But there's nofuture in producing milk either.

A way for aidAid projects intended to help the poor often go wrong. Som etimes wages don'tarrive for the local staff. Some times there is corruption. So metimes the designof the project is inappropriate and all to often failure stems from not involvingthe local people from the start in the very programme that is intended to helpthem.

Despite these difficulties, it is essential to continue to find ways to tacklepoverty. At least mistakes can be rectified and lessons learned for the future.But to concentrate aid on power stations, helicopters or holiday villagesbecause econom ists and planners are confident they will bring good fin an cialreturns is to turn our backs on the one p riority voters and taxpayers want to seedominate the use of official aid figh ting poverty directly.There are many illustrations of the damage that can be done in the name ofcompassion. To some people these examples are enough to conclude thatofficial aid does more harm than good. This is a very pessimistic view. It is

important to look at the successes and the failures of official aid, and fromthese to es tablish future priorities for aid use, based on the principle that thefundamental purpose of aid is the direct relief of poverty.

The goalsTo respond to clear public concern by developing an aid programme thatreflects in its scale and nature a sincere government com mitm ent to the figh tagainst poverty and hunger in the world. To assert that this is the principalobjective of aid and far outweighs British commercial self-interest in itsal locat ion. To demonstrate an intent to direct a much greater proportion of aidto the im me diate needs of the poor.

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Priorities for the BritishGovernment1 . To reduce the emphasis on commercial criteria in the allocation of aid. Inparticular, the commercial extreme of the aid programme the Aid TradeProvision should be phased ou t of the a id budget altogether and trans ferredto the Department of Trade and Industry, since its primary purpose is to winexport contracts for UK firm s.2. To allocate aid where it will help the poor most effective ly.Which people: the Third World poor' do not form a homogeneous group. Someare peasant farmers who might be nefit from a gricultural development. Othersare nomads who are threatened by the degradation of the environment. Somelive in shanty towns and need improved health care and other basic services,while others face im med iate starvation and need emergency relief. A differentaid approach is needed for each group.Which countries: the majority of the world's poorest people live in the poorestcountries, and this should be reflected in the distribution of official aid. Butmany very poor people live in the slightly wealthier countries, and they shouldbe helped too .Which governments: some governments make it much easier than others tohelp their poor. Since aid in these countries can be particularly effective, it isimportant to give them special weight in the a llocation of aid. In countries wherethe government is not concerned about fighting poverty, the only effective wayof reaching the poor may be through voluntary age ncies .3 . To involve the poor. To ensure tha t development schem es are long-lastingand that their benefits really do reach poor people, it is important that theyrespond to needs identified by the poor themselves. Great stress should beplaced on 'popular participation' involving poor communities in the designand execution of development projects and in particular on the involvementof women, with special schemes to respond to their needs. Al I this necessitatesforging a new 'partnership for developm ent' with the governments of develop ingcountries and, where this is not possible, channelling aid through voluntaryagencies.4. To increase the em phasis on agricultural development, rural developmentand aid specifically directed at poor people, particularly in the faminevulnerable areas, including :a) Improving extension services (techn ical advice, veterinary services etc.) andparticularly targeting them to women, so that poor farmers have access toimproved methods.b) Con centrating on agricu ltural schem es designed to improve the ability ofthose most at risk from hunger or fam ine to buy or grow the food for their fam ily'sbasic needs.c) Improving the rural infrastructu re in the most vulnerab le areas, includ ingroads, rail, telephone systems and the supply of seeds, fertil isers and other

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inputs , when it is clear tha t these initiativ es respond to the expressed needs ofthe poorest people.d) Improving the prices paid directly to poor farmers for their produce.e) Increasing and diversifying rural cred it, so tha t sm all-sca le farm ers, menand wom en, are able to borrow what they need for seeds , irrigation systems,fertil isers etc.f) Providing more support for UK, Third World-based and internationalinstitutes for research into food crops suitable for agriculturally vulnerableareas.g) Supporting governments tha t are attem pting to promote land reform.5 . To reform EEC food aid . Present procedures should be overhauled toincrease the proportion ava ilable for fam ine re lief (if the need arises), to phaseout products such as milk powder and butter tha t are not basic foods, to phaseout food aid schemes which co nflict with the interests of local farmers and toconcentrate non-emergency food aid on coun tries which both (a) needto importfood and (b) are embarking on 'food strategies' designed to increase foodproduction and deliver the ben efits to the whole po pulation.6. To strengthen the EEC's capacity to respond to emergencies. Thisparticularly involves reforming emergency food aid procedures. These reformswould include:a) Improving early warning systems for the detection of famines at theirearliest possible stage (and greater preparedness to respond to the alarms).b) Se tting up strateg ic em ergency food reserves in famine-vu lnerablecoun tries, inc luding help to cover the running costs.c) Instituting swifter procedures for allocating emergency food aid .d) An agreem ent to supplem ent the UK aid budget out of cen tral governmentreserves in the event of major emergen cies, such as the recent famine in Africa.7. To make a full com mitme nt to U nice fs 'W ithin Human Reach' strategy, inparticular placing great stress on food security and on strengthening health,rural water supplies, education and other basic services needed by the poor.8. To increase the emphasis on soil and water conservation, sand dunestabilisation, reafforestation and other measures to protect the environmentand develop natural resources.9. To argue in the international arenas for these 'Real Aid' criteria to beadopted by official aid agencies, es pecially by the m ultilateral agencies suchas the World Bank.10 . To agree a five year timeta ble for reaching the UN target of 0 .7% GNP asaid, concentrating the increase in the aid budget on the poverty-relievingprogrammes described above and on similar programmes of multilateralagencies.

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TRADEThe TreadmillOne of the harshest realities of modern times is the vicious treadmill of thecommodity trade. People in the rich world are proud of all the aid they and the irgovernments gave for famine relief in Africa (three and a half billion dollarsworth in 19 85 ). And, true, the suffering would have been imponderably worse ifthat aid hadn't been given. But this must be put into perspective.If Africa's trade hadn't collapsed, then the continent would have EARNED$5 billion extra In that year.No-one is suggesting that all these extra earnings would have gone entirely tothe drought regions and eradicated fa m ine , but it would certainly have lessenedthe crisis. C ountries on a sounder economic foo ting may have serious drough ts,but they are likely to avoid catastrophic famines. Hence Kenya, which iswealthier because of its relatively advanced and diverse trade base, suffered abad drough t and harvest loss in many parts of the country in 1984, bu t avoidedwidespread famine.1 Other countries , such as M ali or Burkina Faso, which arefinancially unhealthier, were simply unable to cope with their drought. In 198 3,before the worst period of drought, Sudan's financia l reserves had, for example,fall en to such a point tha t they only covered six days' worth of im ports .2 There'sno safety m argin in such an economic clim ate.An understanding of hunger must encompass an understanding of the tradetreadmil l .

How the treadmill worksStep 1 Need to earn moreIf your rent goes up and the fam ily food bill sh oots u p, you've got to earn more.That has been the problem o f most develop ing countries over the first half of the19 80 s. W ith rising interest rates and soaring prices of machinery, oil and otherimport needs, developing cou ntries needed to earn more.Step 2 Limited opportunitiesThere are few ways in which deve loping co untries can earn more. Three quartersof their earnings come from just 33 key comm odities and an individual countryis likely to be heavily dependent on just one or two of these. 3 The markets forthese commodities are l im ited.For example, in 1984 88% of Zambia's export earnings came from copper,

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50 % of Sudan's from co tton, 5 1 % of Malawi's from tobacco and 5 9% ofBangladesh's from jut e. 4 Most of the commodities are agricultural products,but some countries depend on mineral exports.The Third World's dependence on a handful of raw com mo dities comes fromnecessity rather than c hoic e. They need to earn foreign exchange , and virtuallyall o ther ways of do ing so are den ied them. They would like to sell other goods process their commodities and produce manufactured goods but thewealthy co untries, their would-be customers, erect barriers to such trade.Step 3 Facing competitionCommodity prices tumb le as developing cou ntries produce more for export andcompete with each other to find outlets for their goods. This problem has beensharpened by the recession faced by industrialised co untries, which meant theywere cu tting im ports, and by the development of sy nthetics to replace natural

Case StudyBrazilThe effect of the trade treadmill can be seen In the case of Brazil.Throughout the country the export drive Is Indicating how land Is used.Brazil is now one of the world's leading food exporters, yet millions of Itspeople are malnourished. To pay for the Interest on its $1 0 0, 00 0 milliondebts, and to meet the capital repayments due, Brazil has had to go hell-for-leather for export growth. The growth has been remarkable. Brazilnow has a $12 ,4 00 million trade surplus more than enough to serviceIts debts.8 The acreage under soya bean has Increased more than twenty-fold from 1 9 6 3 -8 3 , overtaking all other crops except maize.9 Most soyais exported as animal food and by 1983 accounted for about 10% ofBrazil's foreign exchange.Oranges are Brazil's latest boom crop. Production has increased twoand a half times over the last ten years and Brazil Is now the world'sleading producer of orange juic e. 10

The Brazilian sugar trade has not been so lucrative. Production hassoared, but exports have to be subsidised such Is the eagerness forforeign exchange to pay their import bills. The main use of the increasedsugar production, however, is to ferment into alcohol which, in the'Gasahol' programme, is used to replace petrol In cars.Oxfam staff report the clearing of peasants from land which has beentaken over for cocoa production in north east Brazil. This process hasbeen gradual and steady over many years. In the state of Bahla as awhole, the number of cocoa trees has Increased by 40% in ten years.Oxfam is supporting legal costs of lawyers who are representinghundreds of families in their cases against the encroaching landlords.The pressure on land in the Amazon region Is even more dramatic. In

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products such as cotton and jut e. Increased production in a declining marketresults in commodity prices falling even lower.Step 4 Running fasterTo maintain constant export earnings means selling even larger quantities. Formany coun tries this m eans using m ore and more of the best qua lity land to growfor export.Step 5 Back to the beginningThe more that is expo rted, the faste r prices fa l l . This spiral led to a full 1 8% fa llin the price index for primary commo dities in the firs t five years of this decade .5The loss in earnings for the Third World of about $40 billion per year is muchmore than the aid those countries receive .6This comes at a t ime when prices ofthe goods they impo rt are higher and the de bt repayment is m ost severe.

the state of Acre in Brazil's western corner the local people collect rubberand gather Brazil nuts for their livelihood. They live In ecological harmonywith the rain forests. However, this is changing rapidly, as wealthyranchers from the South and multinational companies move in. Afterclearing the forests there Is a great deal of profit to be made in beefranching, selling the meat for export. Cattle meat exports have expandedseven times In ten years.The juggernaut of progress seems unstoppable. The rubber tappershave tried to defend their forests and their traditional way of life, but It isparticularly difficult, as they are scattered in Isolated communities. Theydecided that the only hope was to band together with rubber tappers fromother parts of the Amazon. Helped by funding from Oxfam, 120 peoplefrom different areas came together for the first ever national meetings ofrubber tappers in October 1 985 In the capital city, Brasilia. For some thejourney was Immense. One woman travelled for 13 days by canoe andthen seven days inbuses and boats to take part. The meeting was not justa chance to exchange experiences and plans. It also enabled the rubbertappers to meet with government representatives and to explain theirproblems directly.The contrasts between a country which is one of the world's leadingfood exporters, and yet in which many people are malnourished is a harshreality indeed. But the answer to Brazil's crisis of hunger doesn't simplyhinge on what crops are grown. The pivotal issues are how wealth andpower are shared within that country, and the external economicpressures created by the debt crisis and world recession.

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Indexes of real commodity prices, 1 9 6 5 -8 4Index (1980 = 100)160130

90

50

10

Commodity

Oil

\J \;s except oil

__ /

"-\n

1965 1970 1975 1980 1984Note: Data are nom inal prices deflate d by the IMF world export unit value inde x.Source: World Bank data.

For Africa the situation is particularly grim. The terms of trade the ratiobetween prices it pays for im ports and receives for its exports are worse thanat any time in the past 30 years.7 This is the trea dm ill: racing faster and faste r,not even to stand sti l l , but to move inexorably backward.

Who are the losers?The land used by deve loping countries to grow the m ajor export crops increased1 1 % from 1974 to 1 9 8 4 . u Since most of this was better quality land, peasantfarmers have been forced increasingly onto less productive areas.In a similar period (between 1 97 3 and 19 83) th e area under cereals and rootcrops in poor countries increased by some 8%. The area under soya beans,coffee and sugar grew particularly fast in this perio d, increasing by 4 8 %.1 2From 1975 to 1980 developing countries increased their volume of non-oilexports by 9.4 % .1 3 This is not, in itself, a problem. Most people in Britain drinktea, eat rice, use rubber tyres, wear cotton shirts and many smoke cigarettes.If a developing country has a particularly good climate and soil for growingcoffee, for exam ple, it seems to make good financial sense to use the land togrow coffee for export, and to import food with the earnings. Developingcountries, say econom ists, have 'comparative advan tage' in the production oftropical products because of their favourable agricultural conditions. But thetrade tread mill doesn't allow this to happen. The race to export is fue lled by aneed for foreign exchange dollars that are needed to pay interest chargesand soaring import bills.While over-production for export without a matching increase in demand38


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results in falling prices for commodities, if farmers neglect food productionthen the prices of local foodstuffs wil soar. The middle class and wealthygrumble, but pay the higher bills. The poor simply can't afford to. For thegovernments, it's easier to keep their own hungry people at bay than foreigncred itors. More and more people go hungry, and are forced to eat weeds, roo tsand other forest produce som etimes fo od they know is poisonous in orderto live from day to day. For the poor, 'comparative advantage' becomes'absolute disadvantage'.Many countries suffer the 'ab so lute disadvantage'.TanzaniaThe amount of coffee Tanzania had to export to pay for a ten ton truck doub ledfrom 1960 to 1970, and doubled again in the seventies. Tanzania greatlyincreased its coffee production in the 19 70 s, but with fallin g coffee prices andrising prices of oil and manufactured goods, the increased coffee harvest wasworth less than at the start of the d ecad e.14

1982 to 1985 saw an increase in the price of coffee to the extent thateconomists predicted th at th is crop offered a breakthrough for African coun triesfacing economic d ifficulties . Then came the collapse . In January 1 98 6 coffeefetched $2.20 per pound. By July it had tumbled to $1 .3 7 ju st two fifths of theprice it had been in 1 97 5.BangladeshOxfam staff in Bangladesh describe how, following a period of reasonableprices, poor farmers put over their land to growing jute. By 1986 the price hadcollapsed and these farmers were having to sell their jute below the cost ofgrowing it.Burkina FasoCotton output in this West African country shot up 37 time s to 7 5, 00 0 tons from1960 to 198 4.1 5 At the same time th e production of m illet and sorghum (staplefoods of the poor) barely dou bled .MallCotton production also increased eight-fold in Mali overthe last 20 years, whilefood production has declined 10%.16 A recent report from Oxfam's CountryRepresentative te lls how world cotton prices nosedived ju st as Ma li gathered arecord harvest. The loss to the n ational treasury is estimated to be $3 0 m illion ,a seventh of its entire budget.17KenyaAccording to World Bank estimates, Kenya has one of the highest rates ofmalnutrition in th e world, yet some of its best agricultura l land is used for exportcrops.18 For instance a Brooke Bond subsidiary grows carnations and otherflowers on land by the side of Lake Naivasha. The flowers are then rushed inrefrigerated trucks to Nairobi airport and flown to the UK. Estate owners earn

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much more by growing flowers for European buttonholes than food for Kenyanpeople.NigerIt is not just agricultural com mod ities th at have taken a knock. In 198 2 uraniumaccounted for 80% of Niger's export earnings. The recent price collapse ofuranium ore, has, therefore, had a devastating effect on the country's economy.In jus t one year Niger has seen 27 % wiped off the value of its tota l exports.19IndonesiaThe fall in the pric

Documents

For Richer For Poorer: An Oxfam report on western connections with world hunger