[For example, a high-level note circulated last year by the Department for International Development (DfID) to the development ministers of Canada, Denmark, Germany, Sweden and the US inserts the concept of aid dependency into Sumner's core findings, asserting that "there are startling shifts in the distribution of the world's poor, with almost three out of four of the world's poor living in non-aid-dependent middle-income countries".]
By Jonathan Glennie
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Photograph: Aijaz Rahi/AP
Even in countries such as India, where aid doesn't fill a gaping hole, it provides targeted support to the poorest. |
It is easy to assume that economic growth automatically implies reduced aid dependency, but by doing so we are failing to understand the role aid plays in different contexts
In 2010, Andy Sumner published a paper showing that three-quarters of the world's poor live in middle-income countries (MICs), compared with only 7% in 1990. He called this "a startling shift" and defined what he called a "new bottom billion", responding to Paul Collier's work a few years before calling on the international community to focus strongly on the roughly 1 billion people living in countries that were failing to take off economically.
However, I have been worried by one common misinterpretation of these figures. There appears to be some confusion among policymakers between graduation to middle-income status and graduation from aid dependency.
For example, a high-level note circulated last year by the Department for International Development (DfID) to the development ministers of Canada, Denmark, Germany, Sweden and the US inserts the concept of aid dependency into Sumner's core findings, asserting that "there are startling shifts in the distribution of the world's poor, with almost three out of four of the world's poor living in non-aid-dependent middle-income countries".
Most poor people, according to this memo, now live in countries that are non-aid-dependent. But is this true? I did some number crunching, and what I found may surprise some.
The vast majority of poor people do live in low- or very-low-aid countries (where aid is respectively under 2% and 1% of gross national income (GNI)) – 77% in 2009. But, crucially, this is anything but a "startling shift". In 1990, the number was almost exactly the same: 75%. This statistic is what prompted me to call my paper: What if three-quarters of the world's poor live (and have always lived) in low-aid countries?
The DfID note implies that there are now more poor people living in non-aid-dependent countries yet the data I compiled shows, if anything, the opposite: a higher proportion (15%) of the world's poor people now live in high-aid countries, where aid is more than 10% of GNI, than 20 years ago (10%). (See my recent paper with Annalisa Prizzon if you are interested in our new way of classifying countries as very low aid, low aid, middle aid and high aid, according to their aid/GNI ratio.)
What do these numbers tell us? Well, on one level, we need to be careful not to read too much into them. The vast majority of the world's poorest people (85%) live in 10 countries. So trying to make aid policy for the developing world based on percentage shifts in a few massive countries may not be that wise. Five of the top six of those countries became MICs in the past 10 years or so, by the way, accounting for almost all the shift in the geography of poverty described in Sumner's paper.
However, these numbers do provoke two important reflections. First, although it is fairly well-known that aid is a tiny fraction of the world's financial resources – around 0.2% of global GDP since 1990 – there is less recognition of just how low aid has been (relative to the size of the economy) in the countries where most of the poor live. The focus by rich countries on aid as the key tool to help end poverty needs to be urgently questioned.
Second, this is not a new phenomenon, and that is crucial to remember, because a lot of people are suggesting that economic growth necessarily implies a reduced role for aid. Take this quote from a (very interesting) 2008 book by Carol Lancaster, the former deputy administrator of USAid: "Some countries have made remarkable economic progress (for example Korea, Botswana and Chile) and no longer need foreign aid. Others, like China and India, with promising rates of growth and poverty reduction, need aid less and less."
The implication is clear – aid has done its job and is no longer needed. But the idea that Chile, China or India ever needed aid is fairly ludicrous; aid has been well under 1% of GNI in these three countries for decades. Korea and Botswana, on the other hand, did rely on aid heavily for brief periods in the 1970s.
By easily eliding economic growth with reduced aid dependency, we run the risk of misunderstanding the role aid plays in different contexts. Aid to low-aid countries such as Chile, China and India doesn't fill a gaping hole in the public finances, as it did in Korea and Botswana, but it has supported particular projects or initiatives within or outside government to catalyse larger change – the development of a civil society, crucial in countries where the problem is wealth inequality rather than an absolute lack of capital – and provided targeted support to the poorest.
In countries where aid has long been very low, why should further reduction be necessary? Moving up to MIC status does not necessarily mean that the poor will be better off, certainly not in the short term. Even as countries grow richer they are still home to many poor people, and even when people move above the arbitrary $1.25 or $2 day "ceilings" they may still be miserably poor compared with western standards.
[Radical governments in Latin America derive their legitimacy from ballot boxes, and in other countries the emerging left is often the greatest champion of formal democratic institutions, the most concerned about their corruption and manipulation by entrenched interests and corporate power. There is strong support for new democratic experiments in popular deliberation and consensus building, and greater rejection of top-down models of party organisation, with respect for a plurality of opinions within the left.]
By Jayati Ghosh
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Photograph: Farjana K Godhuly/AFP/Getty
A farmer in Bangladesh. Socialism once favoured centralisation, but is beginning to find a balance between large and small. |
Reports of socialism's death have been greatly exaggerated – its progressive dynamism could be the key to a brighter future.
Even as resistance to global capitalism builds, it tends to be accompanied by gloomy perceptions that grand socialist visions of the future are no longer possible. But there is much more dynamism within the global left than is often perceived, with variegated moves away from tired ideas of all kinds. Left movements in different parts of the world increasingly transcend the traditional socialist paradigm, with its emphasis on centralised government control over an undifferentiated mass of workers, to incorporate more explicit emphasis on the rights and concerns of women, ethnic minorities, tribal communities and other marginalised groups, as well as recognition of ecological constraints and the social necessity of respecting nature.
Seven common threads appear in the emerging left, in what are otherwise distinct political formations and dissimilar socio-economic contexts. These are not always "new" ideas – more often than not, they are old ideas that appear new simply because of the changing context and the collective failure of memory.
The first is the attitude to what constitutes democracy. Unlike earlier socialist formulations, which saw all institutions of the bourgeois state as inherently and deeply tainted, the emerging left has shown a much greater willingness to engage with formal democratic processes such as elections, referendums, laws delivering rights, and judicial processes.
Radical governments in Latin America derive their legitimacy from ballot boxes, and in other countries the emerging left is often the greatest champion of formal democratic institutions, the most concerned about their corruption and manipulation by entrenched interests and corporate power. There is strong support for new democratic experiments in popular deliberation and consensus building, and greater rejection of top-down models of party organisation, with respect for a plurality of opinions within the left.
The second relatively "new" feature is the rejection of overcentralisation. The centralising, homogenising state was a central element of actually existing socialism throughout much of the 20th century. Of course, there are good reasons for the socialist celebration of largeness: the need for social co-ordination of investment, especially large-scale investment, as well as state direction of the redistribution of wealth and income. But the new aim is to find the right balance between large and small, according to context. There is greater emphasis on the need to generate or enhance the viability of small-scale production, and a reaction against past attempts at centralised control over all aspects of material life, which have been experienced as rigid, inflexible, hierarchical and lacking in accountability.
This requires a more complex approach to a third area: property rights. Earlier models of socialism wanted to do away with all private property. But emerging left thinking is vague or ambivalent about private property, disliking it when it is seen as monopolising or highly concentrated (for example, in the form of multinational corporations), but otherwise not just accepting of it, but even – as in the case of small producers – actively encouraging it.
The fourth new tendency is that of speaking in the language of "rights" – not seen in the individualistic sense of libertarian philosophy, but more broadly defined in terms of entitlements and recognising the need for the social and political voice of citizens, communities and groups to be heard.
Fifth, the emerging left goes far beyond traditional left paradigms in recognising the different and possibly overlapping social and cultural identities that shape economic, political and social realities. It is now realised that addressing issues only in class terms is not sufficient, and many strands of the emerging left are now much more explicitly (even dominantly) concerned with addressing the inequalities, oppression and exploitation associated with social attributes, race, community, and so on.
Divergent from this is a sixth area, gender, which represents the most significant of these social/material attributes. A changed attitude to the woman question – and, associated with this, a more complex understanding of the nature of exploitation – are features of many such emerging left movements. That's not to say patriarchy has suddenly disappeared from the ranks of leftist organisations and movements – unfortunately, this is clearly a longer struggle. But the wider perception of the ways the gender construction of society affects both men and women in so many aspects of their lives has now become – explicitly, if not always in practice – a more serious concern among the emerging left.
Finally, society's relationship with nature is undergoing much more comprehensive interrogation than ever before. Traditional Marxists tended to be technology fans, to the point where the requirements of an organic and sustainable attitude to nature were rarely factored into discussions about accumulation and productive expansion. All this has changed quite dramatically in the recent past. Today, many of those who call themselves socialists see environmental conservation, the protection of ecosystems, biodiversity and the integrity of a country's genetic assets, the prevention of environmental damage, and the recovery of degraded natural spaces as matters of public interest and strategy.
The fundamental premises of socialism remain: the unequal, exploitative and oppressive nature of capitalism; the capacity of human beings to change society and thereby alter their own future in a progressive direction; and the necessity of collective organisation to do so. The fecundity of the socialist alternatives cropping up in different parts of the world suggests that – whatever we may think to the contrary – socialism has lost nothing of its dynamism and excitement.
• Jayati Ghosh will be gave a public Ralph Miliband lecture on the future of the left at the London School of Economics on 28 May 2012
