Friday, 23 March 2012

Development Management: Can the ‘new aid paradigm’ and its associated values and principles really make a difference to global poverty? (by Ivan Fukuoka)

Globalisation of a singular-development model will inevitably invite challenges and resistance especially when the resulting benefit is not redistributed and shared with those marginalised by the development process. Poverty and hunger are indicators of a dysfunctional development approach of our modern and increasingly globalised world.

The nineties was a decade of many economic and financial challenges but also host to many important international conferences and meetings concerning the state of the world. Many of these conferences were fundamental in the setting of a common vision for a better world. One of such conference was the United Nations (UN) Millennium Summit in September 2000, which produced a declaration and adopted by 189 UN member-nations. The UN ‘Millennium Declaration’ contained ‘a commitment to work towards environmentally sustainable human development’.

Thereafter, the ‘Millennium Declaration’ evolved into a set of eight-point non-binding framework for development goals aptly called the ‘Millennium Development Goals’ or MDGs. MDGs seek to halve by the year 2015 the problems affecting many developing countries in the South, but not limited to developing countries exclusively.

The first goal of MDGs is eradication of poverty and hunger. This is important because success in poverty reduction is going to influence positively on the remaining goals. But, this will depend on the success level of the ‘new’ aid and development management.

Past failure of structural adjustment programs (SAPs) administered by the IMF and World Bank in many countries during the nineties prompted reformation process at both institutions. The neoliberal economic and development approaches to aid assistance were reformed to be more humane following the UN ‘model’ of human development.

And recent report from aid operation in Afghanistan exposed some weak points from the ‘new aid paradigm’.
The report showed many cases of aid ineffectiveness in delivery of the program and attracts international attention. Putting the validity of the ‘new aid paradigm’ in question.

What needs to be underlined here is that both ‘old’ and ‘new’ paradigm originated from the thinking of ‘economic rationalism’ the values and principles of which are also embedded in current neoliberalism policies. So it’s worth remembering that regardless the number of ‘reformation’ the WB and IMF have taken, their core values and principles remained the same, therefore will not result in any real change or transformation.

Can the ‘new aid paradigm’ constitute a real [development] paradigm shift?
Development process is never a value free exercise because there are many stakeholders with differing interest and motivation from grassroots level up to influential political elites. All these groups have some degree of interest in the development process and its outcome, as it may affect their progress or wellbeing, especially if their economic wellbeing is at stake. In the case of ‘new aid paradigm’ (NAP), the principal stakeholders are forces belonging to/or associated with pro-market neoliberal capitalist and the global corporations.

Neoliberal economic development borrowed much of its ideals from ‘economic rationalism’ – a viewpoint that places ‘…the dominance of the economy and economic processes over all areas of state policy-making’ (Marginson, 1993; Pusey, 1991; in Codd, p.65). In other words, this doctrine emphasises the search for efficiency as its primary [development] objective.

Obviously, this is the kind of objective commonly found in businesses, companies and corporations of the world, because through efficiency, labour and wages, time and costs can be saved or reduced thereby increasing profit.

However, aid and development work sometimes need to transcend beyond measurable efficiency for something less tangible, something which cannot always be measured through efficiency alone. For instance, there are qualities like ‘happiness’, conviviality and tradition, these qualities exist even before modern development arrived and it may- even redefines the meaning of modern development. For example, Bhutan’s drive to integrate ‘happiness’ into modern development context is worth serious consideration.

The Gross National Happiness or ‘GNH’ (Larmer, 2008, p.130) may well be the missing ingredients of neoliberal economic development.

Clearly the proximity of ‘new aid paradigm’ to neoliberalism will make it difficult for a real paradigm shift to take place – at best it will usher more ‘re-formation’ (as the case with the WB) but probably not a proper transformation in the aid and development work. As the development objective of neoliberal economic globalisation is pro-market and corporation rather than pro-poor.

Resource Conversion: The Fuel of Global Economic Growth and Development
The last stage in Rostovian linear model of development requires ‘High Mass Consumption’ and this fit nicely with neoliberal ideals of ‘market economy’ where economic growth is expected to increase at all times and normally will slowdown only when there is a ‘market-crash’ or economic depression. ‘Normal’ market behaviour is people buying, companies producing, bourses are bullish and the economies growing, but what exactly fuelled all these productivities and growth is the continuous depletion of world’s natural resources. What is really happening here is resource conversion – or borrowing author Derrick Jensen strong description ‘…production is the conversion of the living [resources] to the dead…’ for consumption (Jensen, 2006, p.599) labour included of course. This is the fuel of development, and like fossil fuel or oil, it too may run out one day. Which is useful to remember.

Economists often ‘forgot’ to mention that there are associated costs for economic productivity and growth to happen. However, these ‘costs’ are not simply called cost anymore but hidden under some economic jargon like ‘externalities’. Take the Amazon rainforest for example, unseen and unknown to the many participants of the economic activity is the untold pain and suffering of the marginalised, the minorities and others organisms and species who lost their habitat and lest we forget the forest is also populated by people like you and me who have to sacrifice [unwillingly] their home, their culture or even their life as they stand in the pathway of ‘progress’ and development. Their weak voices were lost and unheard under the cacophony of modern industrial 'progress' and 'development' – surely this cannot be progress nor development.

Neoliberal economic-development according to Friends of the Earth International, has long been brandishing the promise of a ‘win-win’ theory of comparative advantage to address the problem of poverty. However, it was developed when the domestic economies were strong so it has lost its relevancy in the face of a globalised and borderless market. (FOEI, towards sustainable economies, p.7)

Some economic experts point to the so-called ‘poverty-trap’ – the self-reinforcing mechanism that acts as barriers to productive techniques which result from both market and institution failures (Azariadis & Stachurski, 2005, p.297). But how can the poor use, let alone purchase the technology when they are hungry. Economist Hernando de Soto has an interesting argument regarding this, he said the poor are not really poor, but their informal-economic sector lack the formal [legal] recognition for their lands/assets and goods which deprived them from fully participating into the formal economy (de Soto, 2000).

Others development agencies and institutions recommended solution like ‘Sustainable Development’ (SD) which has been around for more than a decade with meagre result, probably because SD is an oxymoronic term in itself.

Because if to develop means to industrialise then it is clear that it will not be [environmentally] sustainable, unless of course the rate of take is less or at least similar to the rate of regeneration. And since not many countries can achieve economic and development progress without utilising their own or others natural resources, environmental degradation is unavoidable. Thus it is obvious that market-economy operation depends upon industrial development, which in turn depends on the conversion of [natural] resources.

This is inline with the explanation of development from  Gilbert Rist, quoted by Andreasson below:
‘‘Development’’ consists of a set of practices, sometimes appearing to conflict with one another, which require—for the reproduction of society—the general transformation and destruction of the natural environment and of social relations. Its aim is to increase the production of commodities (goods and services) geared, by way of exchange, to effective demand (Rist, p.13, cited in Andreasson, 2005, p.60).

When taken in SD context the above explanation is in apparent conflict with the goal contained in the seventh MDGs – which target stated clearly ‘… [to] reverse the loss of environmental resources’ (UN, 2000, MDGs # 7, website).

This is one of the reasons why Brazilian economist Buarque suggested that: ‘The first step towards promoting [any] development must be an independently obtained definition of development’ (Buarque, 1993, p.51). Therefore a country or a nation must be very clear about what is ‘development’ – for whom it is intended and more crucially at what cost is this ‘development’ – which may not be limited only to the dollar value but more than that, because a wrong development program may even cost a [local] culture – the bedrock of civilisation itself.

‘New aid paradigm’: part of the problem or the solution?
The founder of Grameen Bank of Bangladesh, professor Muhammad Yunus said this: ‘…nothing in the world is the single solution…’ during an interview with the BBC News. When this statement is taken into the context of the ‘new aid paradigm’ – it brought the concept of ‘time’ to mind.

‘Time’ here means timeframe – ‘short-term’ and ‘long-term’ – where improvements or efficacy can take place. So, if ‘short-term’ means inching away from the unregulated free-market economy then the Bank and IMF can be said to have improved.

However, for ‘long-term’ improvement of the poor, rhetorical reformation will not do the work. And, expecting total transformation in the aid and development industry under the current market-economy would be unrealistic. In fact the Bank and IMF have done quite well doing some ‘improvements’ regime to keep up with the emerging trends in the aid and development industry. Their positive effort deserved appreciation, the trouble is a ‘short-term’ approach as such is of little benefit for the poor of the world.

For example, the Bank’s departure to their new position was marked by the release of the World Bank’s 2000/1 Development Report on ‘Attacking Poverty’ – which is ironical since the object of the ‘attack’ should have been the pro-corporation short-term policies of neoliberal market-economy itself. In this case, it is sobering to remember one prominent proponent of neoliberal market-economy, the late Milton Friedman who argued that, ‘…the greatest good would be achieved by basing all business decisions on maximising profits for shareholders.’ (Friedman, 1970, cited in NI 407). Reflected in this point of view is its narrow ethics and how ‘short-term’ thinking which benefits the few [shareholders] override ‘long-term’ thinking that benefit the many – in this case [hopefully] the poor.

Poverty in the [modern] world is the systemic by-product of an increasingly globalised neoliberal market-economy. Its modus operandi involves extraction of natural resources for conversion into products. And depending on the scale of the operation, the larger and more industrialised the operation and the more resource it will use. This create imbalances in the scale of world’s resources use and later may develop into social imbalances such as poverty. So until these imbalances are corrected it is unlikely that poverty can be eradicated.

Development based on the ‘new aid paradigm’ is too closely associated with neoliberal market-economy goals—so it is very much part of the problem, therefore it will not serve the purpose of eradicating poverty as mandated in MDGs first goal. The multi-dimensional nature of poverty also cannot be address through uni-dimensionally type of ‘attack’ on poverty. Rather it is more appropriate to pursue the root of poverty, which is inherent in the dominant neoliberal market-economy.

It will take nothing less than a full transformation of current world economic system to undo this dependency on converting natural resources; perhaps even a self-implosion of the whole economic system itself under the pressure of the current global scale ‘triple threat’ of rising food prices, climate change and population growth. The ability to live well based upon long-term steady-state interdependence with intact, healthy ecosystems and their natural capital is lost forever nearly everywhere.

Powerful modern developed countries ‘tool-box’ is full with all kinds of science and technologies, the libraries are full with Eastern and Western wisdom and ethical ideals – why not make best use of it. In the end the choice is mainly in the hands of those in power, those who have the capacity to change and influence policies at many level. It is expected from those who live in modern industrialised environment and have benefited from the last 200 years or so Industrial Revolution [including the elites and privilege of third world nations] to reconsider their collective mode of economic activities. Development itself may become an ethical or even moral question. As sardonically put by Serge Latouche: ‘May the planet perish, as long as development is intact!’ (Latouche, 1997, p.139).

The Evolution of Technical Assistance: from Expertise and Advisory to Facilitating
The dominant paradigm in capacity development is the neoliberal development model which originally can be traced to Rostow’s ‘five stages of development’ and the concept of ‘economic rationalism’ that value ‘efficiency’ as its main motivator. This is such, because efficiency [unlike capacity] is thought to give an edge against the competition.

New Policy Agenda (NPA) is the starting point for international development agencies. Its content is neoliberal economic developments and democratic theories. Agencies the like of WB and IMF and others utilise and modified it according to their needs. However NPA is challenged by the following three points:
  1. Western development program is in crisis; 
  2. Western dominance is resisted; 
  3. Northern NGOs in crisis.
Non-government development organisations (NGDOs) started filling the gap left by state and regulatory body retreats in during the eighties and to a certain extent the nineties.

Many social services that used to be the domain of the state were filled by NGDOs, and it becomes the main vehicle for pressing on NPA decentralisation and democratisation and serves as a link between state and citizenry.

As dissatisfaction grew due to poor cost-effectiveness of the top down approach, giving NGDOs opportunities to serve as tools for bottom up development. With the shifting emphasis in neoliberal development thinking and policies, ‘capacity building’ evolved into Capacity Development Services or CDS.

By the end of 1970s—development policies shift towards a more participatory approach in a bid to involve the poor and the oppressed. Technical Assistance (TA) changes its focus – supports were given to NGDOs private initiative.

The 80s – see TA being pushed to the margin by programme aid. Privatisation continues and state roles reduced. The main theme of 1990s continues along more privatisation and added institutional building its focus. The emphasis is on ‘change’ process of institutions.

And today, capacity enhancements services (CES) provider emphasis is on ‘advisory services’ with focus on organisational development, process approach and later facilitator hence shifting away from expert and advisory services. The outsider [worker] role is to encourage change from directive to non-directive.

The continuum of ‘consultancy’ starts with ‘expertise’ to advisory and later facilitator at the end – with enough room for further role development if needed. In brief the role of an expert is of leadership. The adviser responsibility is for result but not much concerned with the learning process. While a facilitator role is to teach others how to diagnose and constructively intervene when necessary.

The success of capacity enhancement change is to a large extent dependent on consultants’ appropriate roles at appropriate time. Highlighting the importance of sensitivity and awareness when engaging with the client. The ability to listen, to learn and to adapt becomes crucial. As client’s learning obstacle cannot be overcome simply by a prescription from the outside. To awaken this ‘inner’ potential may requires change in [client] mindset and culture from within but can be facilitated from without [by facilitator]. The emphasis here is on the client’s own self-understanding which depending on his/her level of understanding will determine the depth of change.

At the organisation level the focus is now on capacity enhancement. Capacity enhancement values respect, trust, honesty, and recognition of client’s existing capacities. Facilitator attitude should be honest, supportive and sensitive, while making sure their power is not misuse all the while keeping the client in control of the process.

Capacity enhancement providers such as SNV of the Netherlands are working along these guiding principles when dealing with their client:
  • demand-driven;
  • client-centred; 
  • client-led 
  • flexible.
Good facilitation process requires facilitator to be conscious of one’s own values and ability to create conditions and mechanism for genuine participation. Equally important is facilitator readiness to adjust and adapt in a dynamic and sometimes unexpected situation.

There are other and better alternatives to prosperity and away from the tyranny of poverty [and corporations]—but it will take nothing less than a ‘transformation’ in the mindset of the public. Keeping the ‘business as usual’ way of life will not help to reduce poverty and hunger.

Reconsideration of what is progress and development according to one’s own understanding, cultural and traditions context is crucial. What is good for one particular person, localities, countries and region may not be good for others.

Once the meaning of progress and development is clear then [each] can adapt a road map but always aligned to the greater good of the planet as a whole. Appropriate use of all human faculties to act and react with planetary dynamics is not only important but urgent. The room for doubt in our own capacity is over—the ‘triple-threat’ of rising food prices, population growth and climate-change is too huge to be ignored. Taking into account that natural resources are decreasing and limited, surely development must be geared for long-term steady-state interdependence with whatever is [still] intact in the planet’s ecosystems. The ability of the inhabitants of this planet to live well within this limits is paramount for sustainability.

The concept having or owning ‘less’ is important to get acquainted with, because having less is not the same as living in poverty. The rule for any systems [economic system included] is: the more complex a system is, the more resilient to stress or collapse. One has to reflect on this otherwise sustainability is a distant dream.

Education has an important role to play by imparting ideals, principles and practices of sustainable-living development, so that the general public has deeper understanding of what sustainability really is, and this is especially true for those with commanding economic power. Biologist Stephan Harding summed up development as: ‘…to be truly sustainable, development would be aimed at ensuring that the amount of matter flowing through the global economy would either shrink or be at a steady state.’ (Harding, 2006, p.233).

And finally, as often reminded by economist and poverty expert professor Jeffrey Sachs, ‘...we have the technologies and financial resources to eradicate poverty’(Sach, 2005, p...). Which also reminds us about the moral and ethical obligations of those well equipped with advanced technologies and abundant financial resources — lest they forget.

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De Soto, H. (2000), The Mystery of Capital (pp.32-54). London: Bantam

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People versus corporations. (2007) New Internationalist, 407, December, (pp.12-13).

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