The decision
of some donors to suspend aid to Rwanda raises a fundamental question on the
rationale for rich countries to give aid to poor countries. Is the major reason
for aid to reduce poverty and help raise the welfare of the poor in developing
countries or is to increase the ability of rich countries to exercise political
leverage over them?
The
decision on Rwanda will confirm the rarely discussed, but widely held view that
the raison d'être for aid is mainly for political
leverage. It increases control and potential for arm stringing of the poor by
the rich.
Rwanda
is consistently rated as a country that uses aid wisely, productively and to
the best benefit of its people. The 2010 United Kingdom Department for
International Development Department (DFID) evaluation of the impact of UK
aid globally, ranked Rwanda highest in delivering best value for every pound of
aid given to the country.
Over
the last five years alone, with effective use of aid and domestic resources,
Rwanda helped over one million of its citizens raise themselves out of poverty.
According to the results of the 2011 externally validated household living
conditions survey, the poverty headcount reduced by an unprecedented 12
percentage points, with poverty reducing faster in rural areas than urban areas
and inequality declining as measured by the geni-coefficient.
This achievement was termed by
the highly respected Oxford University Economist, Paul Collier, as a
development hat trick - high economic growth resulting in significant reduction
of rural and urban poverty, with inequality falling. This means the benefits of
a decade of growth are fairly and equally distributed across the country.
Rwanda is one of few sub-Saharan
African countries on track to achieve almost all the millennium development
goals by 2015.
The country has been able to put
all children of school going age in school and they are guaranteed to stay in
class until they finish the nine years of basic education. Child mortality has
significantly reduced.
The Rwandan population enjoys
universal health insurance coverage, guaranteeing access to basic health
services.
There is no question that aid to
Rwanda reaches those who need it most. It has the desired impact and delivers
best value for money. The country has a strong accountable public finance
management system, a zero tolerance policy to corruption and robust engagement
with donors.
So
every pound of aid is accounted for and can be tracked to tangible and
verifiable results. There is, therefore, no doubt that if the raison d'être for aid is to reduce poverty and
benefit the vulnerable, Rwanda is a star performer.
For donors to suspend aid to the
country based on allegations in a highly contested United Nations "Group
of Experts" report to the UN Sanctions Committee on DRC raises serious
questions about the intentions of donors when they give aid. This has far reaching
implications beyond Rwanda.
The
crisis in the Democratic Republic of Congo has been around for decades. It
didn't start with the M23which
Rwanda has expressly and strongly denied it doesn't support. DRC has
experienced over four decades of governance failure, institutional decay,
corruption, insecurity and conflict.
The current crisis is a direct result of the country's
political and historical complexity. This is external to Rwanda which has its
own internal priorities of reconstruction after a tragic genocide in 1994.
The carnage, death, loss of life
and humanitarian crisis that has gone on for decades in DRC is painful and
inexcusable. It must stop. This can be achieved by genuinely addressing the
root causes of the cycle of conflict and finding a lasting solution. Any
sustainable solution will have to be DRC led. This requires ownership by the
Congolese to genuinely seek a political dispensation that will bring durable
peace and stability.
Rwanda as a neighbour can only
help where it is needed. Indeed Rwanda has been pro-actively engaged with the
DRC government and within the framework of the International Conference for
Great Lakes led regional initiative to find a lasting solution to the crisis.
The suspension of budget support,
despite Rwanda's efforts and demonstrated good will to help ensure stability
prevails in the region, while rebuilding after being a failed state in 1994 is
a slap in the face. This action harms Rwanda, but will not help DRC either.
Rwanda has built a successful
partnership with its development partners. The country has played a key role as
an inspiration in the conception and implementation of the Paris declaration on
aid effectiveness.
The
declaration was influential in re-shaping the relationship between
donors and aid recipients. It sought to re-define the relationship as one of
development partnership rather than paternalism. Principles of encouraging
countries to own their development process and donors to ensure the quality of
aid is improved, predictable and aligned to country owned priorities are at the
core of the Paris declaration signed by donor countries and aid recipients.
The
framework for mutual accountability has been championed by the OECD-DAC and Rwanda has been hailed as meeting
its part of the bargain.
Rwanda
has been instrumental in ensuring that this new aid architecture is feasible
and works. In December 2011, the country represented Africa and brought the
continent's voice at the Fourth High Level Forum on Aid Effectiveness in Busan, South Korea.
President Paul Kagame spoke eloquently in Busan about the strength
of this new era of development partnership and the promise it held.
Less
than a year after Busan and donors re-affirming their
commitment to ensure aid works for the poor, Rwanda, the star performer, is a
victim of the violation of the same commitments that donors first agreed on in
2005 in Paris and re-affirmed in the Accra Agenda for action in 2008.
The decision on Rwanda affirms
that aid remains very highly politicized. It demonstrates that donors, at the
expense of the poor and vulnerable, will use aid to push for political
objectives or to reward compliance and punish non-compliance depending on
"development partner" interests.
Budget support to Rwanda was
frozen not because the country has failed to use it for the benefit of those
who need it most, but to influence a political end in the DRC. There is no
direct link between what is happening in the DRC and what aid achieves for
ordinary Rwandan citizens. This is definitely not the right way to solve DRC's
problems. Rwanda should not be penalized for the failures of another country.
Critics of general budget support
present it as if donors give the aid to Rwanda as a blank check that government
can spend as it wishes. That is not true. The Government of Rwanda in its
annual budget preparation works with its development partners to agree on
allocations to agreed priority programs and results are pegged on a well
defined verifiable results framework. So donors know ahead of time where their
money is going and what it will achieve.
While the case of bilateral
donors withholding aid due to political consideration may be understood, the
worst precedent that has been set is the politicization of the multilateral
development agencies - The World Bank and African Development Bank. This is
unprecedented and has far reaching implication beyond Rwanda.
The
World Bank and the AfDB are development Banks. Politics should
be kept out of their business and operations. Rwanda has not violated any
agreement with the institutions. Donors must keep politics out of these
reputable global organizations whose sole mandate is development and not
politicking.
This may be about Rwanda today,
but the implications for the functioning, governance, and reputation of these
banks and the countries they serve is far reaching and exposes them to risk.
This must stop. Rwanda has not violated any terms of the World Bank or the
Africa Development Bank and interests in DRC that have nothing to do with
Rwanda should not be brought into their governance and decision-making process.
There is no reason for the rich
countries of Europe to politicize these institutions. This is a very dangerous
path and should not be ignored or seen as limited to Rwanda.
One important point to underscore
is that these political decisions directly affect the poor. They compromise the
quality of aid which has an adverse effect on the quality of development
outcomes and results.
But fundamentally the belief that aid is primarily aimed
at reducing poverty and improving the welfare of the poor is greatly
undermined. Even ordinary citizens begin to perceive aid as a tool only
intended for political control and to buy political leverage and influence.
The Rwanda case should therefore
not be seen in isolation. It should awaken developing countries to the reality
that aid is very volatile. It is intensely more political than we have
previously believed. We can no longer claim that aid is fundamentally for
poverty reduction and development when at the flimsiest excuse, lives of the
poor can be put on line due to political considerations.
Developing
countries also need to reflect on the nature of the relationship between donors
and aid recipients. Is it truly a development partnership or paternalism? Until
recently, Rwanda had believed that the relationship had moved closer to a
partnership.
Reality has now dawned that aid remains very
unpredictable and the donor-aid recipient relationship might be slipping back
into the 1960s approach where political, military and
economic interests were the major determinants of the nature of aid countries
received.
Donor commitments are
increasingly becoming a talk-show and mature democracies of the world can
renege on their own commitments and fail to honour agreements on aid
disbursements without accountability.
I
would be curious to know what we would be saying if the Busan High Level Forum on aid effectiveness
was happening tomorrow and the evaluation of progress on the forgotten Paris
declaration on aid effectiveness was happening today.
We certainly have another
aid effectiveness show coming in the near future and the same commitments will
be rehearsed.
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