World Bank Report Calls For Redirection of Aid to Africa
The World Bank on Tuesday released a report "indict[ing]" its past African aid allocations and stating that aid that had gone to "poor countries with corrupt governments had failed and that future aid should be targeted at governments committed to reform," the Philadelphia Inquirer reports. The World Bank drew these conclusions from case studies of aid provided from the 1980s to the mid-1990s to 10 African countries -- Democratic Republic of Congo, Ethiopia, Ghana, Nigeria, Ivory Coast, Kenya, Mali, Tanzania, Uganda and Zambia. While the report cited Ghana and Uganda as examples of "relative success," it "echoed" previous studies that found that "two decades of financial aid accomplished little in eradicating poverty in much of Africa." David Dollar, an economist who helped draft the report, said, "Our message is [that] providing large amounts of finance to countries with poor policies doesn't produce good results." In fact, the World Bank documented in some cases that foreign aid exacerbated problems by "allowing dictators to stay in power, without improving the well-being of the poor." According to the report, in 1996 more foreign aid went to "mediocre governments" than to "good governments" committed to reforms. Although this trend may be attributable to "noneconomic motivations," such as European nations wishing to aid former colonies, the World Bank said that donors may have used aid "as an inducement [for] corrupt governments to change their ways," a method that "largely failed," according to the agency. "When reform is imposed from abroad, even as a quid pro quo for aid, it is not sustainable," the report states (Moritsugu, Philadelphia Inquirer, 3/28).
World Bank officials say that the report is already "guiding" their decisions regarding low-interest loans to African nations, the Boston Globe reports. Although bank officials note that "many countries now in the midst of the AIDS pandemic are not ready to use donors' assistance effectively," the Globe reports that the bank's $500 million fund earmarked to fight AIDS on the continent may soon increase to $1 billion. Alan Gelb, the bank's chief economist for Africa, said that those countries that may not be able to manage "large quantities of funds" would instead receive technical assistance and "policy dialogue" under the report's guidelines. The Bush administration also may use the report, as well as a "little-noticed" GAO report that says that USAID's AIDS prevention efforts in Africa cannot be evaluated because of a lack of data on its programs, to guide its reassessment of African policy (Donnelly, Boston Globe, 3/28). Speaking to the Senate Foreign Relations Committee earlier this month, Secretary of State Colin Powell, hinting at a change in U.S. aid policy along the lines of the World Bank findings, said, "I'm going to be trying to invest in those countries that have made the necessary changes that have put them on the path of democracy and the free-enterprise system, and not keep propping up despots who won't move in the right direction" (Philadelphia Inquirer, 3/28).