I am aware about the debate regarding the effecitveness of aid and the article below is one that highlights this important issue once again. Shouldn't we as development practitioners think about addressing these debates to specific sectors rather than talking about it generally. Personally, handicrafts is one such area where this the outcoems of this debate can be directed.
As the article questions, aid probably in the form of trade would be more effective. Aid in training, capacity building and providing tools for market linkages would be more beneficial. This is not to say that this has not been looked into. For instance, International Trade Centre works primarily with this motto. Its website www.artisanconnect.net, is one such endeavour too, where all the inofrmation for the access to markets for the artisans and other industry professionals is provided. My emphasis is on the neglect of this industry- we all know that development works at the grass root level but how can we all ensure accountability and transparency in aid allocaiton is maintained with respect to this sector. Can we all develop a tool or a system for this sector in particular. Should we start with aid or aid in the form of trade: a question we need to think about clearly and answer!
Does Africa Need Trade or Aid? (7)Cindy Sin Yu Yau guardian.co.uk, Monday 14 June 2010 09.30 BST
Ignatius Mayero is thankful. As the Project Co-ordinator for Bega Kwa Bega (BKB), he knows that lives have been saved thanks to loans paid out to the handicraft group by Shared Interest (SI), a "cooperative lending society" based in the UK. "I think this is the most important step that we have made. With a loan we have started a cake making project that will accommodate other girls and also act as a supplementary unit of production beside our work of making handicrafts."
Bega Kwa Bega, meaning "shoulder to shoulder", aim to provide people from the Korogocho slums in Nairobi, Kenya, with a means of trading with other countries. The handicraft group employs dozens of talented females, who have recently been provided by SI with Term Loans to purchase sewing machines necessary for the production of their handicrafts.
The results of the additional equipment are there for all to see; BKB now runs six projects, including baking and sewing and the turnover has resulted in more money going back to the people of Korogocho. Over 85 percent of their products are exported to countries such as the UK.
Before SI, BKB's limited resources for handicrafts meant that they could not afford to employ any more people. "This [loan] will help our women continue working as they wait for the orders since there [are] some seasons that we don't receive orders."
Entrepreneurial aid schemes, such as SI, are believed to be the way to ultimately alleviate Africa from poverty. The World Economic Forum and the UN's Millennium Development Goals both state that the eradication of poverty in the long term will be down to "trade" not "aid".
A topic which has caused much controversy, former Goldman Sachs strategist, Dambisa Moyo's book 'Dead Aid' ascertains that western aid keeps African countries in poverty, rather than ease the results of it. Moyo is not the only one. Author of award-winning book 'The Bottom Billion', Paul Collier also says rather controversially, "Aid is to buy influence rather than have an effect in the country."
As an alternative, many experts have spoken about the benefits of setting up entrepreneurial opportunities for individuals in the developing world through private lending, providing them with the money and tools to be able to start their own businesses and repay their loans. Many companies have been established for this purpose, and distance themselves from "charity" status.
Lewis Temple, chief executive of International Development Enterprises (IDE) believes this is the best way to eradicate poverty amongst farmers in poor countries, stating "We provide income opportunities for farmers to earn sustainable and long term cash income."
IDE's aim is to equip farmers in rural areas of Africa and Asia with cheap, affordable agricultural tools through the private sector. IDE also help farmers set up business links at regional markets and work closely with local non-governmental organisations to help farmers establish their own trade.
Far from seeing IDE as a charity, Mr Temple believes, "[It is] a more dignified approach that enables farmers to use their own skills and enterprise to challenge poverty. A donation of cash is a short term fix that humiliates the farmer and diminishes their abilities to lift themselves out of poverty."
Meanwhile, charities have fought back against the rising animosity towards aid. Coco, a UK based charity which focuses on education and healthcare for children in developing countries, specifies that all donations are used to "maximum effect" by co-operating with local community organisations.
"Entrepreneurial investment in developing countries is undoubtedly a necessity for growth, poverty alleviation and development," says Lucy Philipson, Coco's Operations Manager who thinks that aid has been unfairly dismissed. "However, whilst investment in trade is important, trade alone cannot fight poverty. Aid, both emergency and development, is still needed as long as developing countries exist."
Ms Philipson believes that it is not merely western aid which stifles growth in developing countries. "Corrupt governments, unaccountable aid agencies and a general failure to be transparent give aid a bad name. But not all aid organisations operate without morals or ethics, some of us genuinely work in partnership with communities to alleviate poverty."
Countries dubbed "fragile states" such as Sierra Leone and Zimbabwe still rely heavily on aid actually reaching the right causes within the country, where there is fear of corruption and government misspending. Charities are continuously lambasted for not distinguishing between development aid and emergency aid and not making aid money more easily accounted for.
Changing the way in which aid money is dispensed could be the only way developing countries are improved. Experts now argue that the problem lies in a "one size fits all" strategy formed and applied by European governments. Where aid money is given directly to the government, countries such as Tanzania have been known to invest heavily on the needs of civilians. In countries such as Zimbabwe, however, there is no visible improvement to the infrastructure of the country. The EU maintain a travel ban and have frozen assets of Zimbabwe's president Robert Mugabe for the disputed 2008 elections and alleged human rights abuse by his government: driving Mugabe to plead for more aid.
The Organisation for Economic Co-operation and Development reported this year that most rich countries still have a long way to go in order to meet their pledges to the developing world before the economic slump. OECD member countries which include the US, Japan, Germany, France and the UK gave on average 0.3 percent of their national income as aid last year, which was far below the UN target of 0.7 percent.
Aid is undoubtedly one way of helping those in poverty, but how much actually goes directly to those it aims to help? In an ideal world, aid would work in tandem with the ability to trade. Countries such as Tanzania prove that when aid is correctly applied communities can flourish, especially improving the country's infrastructure. Trade loans compliment this, providing a basis for families to alleviate themselves from poverty forever.
This feature was written between 6 March and 30 April 2010 as part of the Guardian International Development Journalism Competition