Aid in the context of Third World Debt ?Will world promised pledges?

Aid in the context of Third World Debt

As can be seen above, generous aid has been provided in hundreds of millions of dollars. Crippling Third World debt however, is in the hundreds of billions:

The Agence France Presse reports Indonesia’s public debt totals some $130.8 billion and Somalia owes $2.5 billion, according to figures supplied by the World Bank. Other tsunami-hit countries have debt burdens ranging from the Maldives' $202.6 million to India's $82.9 billion, Thailand's $58.2 billion and Malaysia's $48.3 billion.

Odious third world debt issues are often ignored by the rich nations, or promises to deal with them have often turned out to be hollow. (This site's section on third world debt has more about how it impacts poor countries' ability to develop, alleviate poverty, and rebuild from disaster.)

Against the backdrop of this disaster’s recovery and rebuilding, this issue must surely be addressed in depth. Rich countries, the World Bank and the IMF have already indicated that there will be some early discussions and meetings to see how to deal with this, at least preempting any early criticism.

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Will the world keep its promised pledges?

Charities and the United Nations are also warning that based on previous experiences, large pledges of donations can often be reduced later. The following are some examples of how this happens:

• Governments may renege on their pledges;
• Double accounting may occur where some of the promised money is actually diverted from existing aid;
• Less is actually delivered.

The British newspaper, The Guardian, captures this and is worth quoting at length:

Charities and international bodies say they fear that much of the money pledged so far to help the emergency in southern Asia may not materialise because governments traditionally renege on their humanitarian pledges.

...

But UN OCHA spokesman, Robert Smith, told the Guardian: “We should be very cautious about these figures [of massive aid pledges]. Let's put it this way. Large-scale disasters tend to result in mammoth pledges which... do not always materialise in their entirety. The figures look much higher than they really are. What will end up on the ground will be much less.”

Rudolf Muller, also of UN OCHA, said: “There is definitely double accounting going on. A lot of the money will be swallowed up by the military or will have been been diverted from existing loans.”

A spokesman for the Overseas Development Institute, Britain's leading aid analysts, said: “The research evidence is that the immediate response to natural disasters involves some new money, but that rehabilitation needs are often met by switching aid money between uses rather than increasing total aid to the countries affected.”

The disparity between government promises and the delivery of emergency and rehabilitation aid can be extreme. Iranian government officials working to rebuild Bam, destroyed by an earthquake exactly a year before the Asian tsunami, last week said that of $1.1bn aid promised by foreign countries and organisations only $17.5m had been sent.

Similarly, more than $400m was pledged by rich countries to help rebuild Mozambique after floods in 2000, but according to its public works minister, less than half was delivered.

The worst example was Hurricane Mitch, which in 1998 swept through Honduras and Nicaragua, killing more than 9,000 people and making 3 million homeless. Governments pledged more than $3.5bn and the World Bank, the International Monetary Fund and the EU promised a further $5.2bn, but less than a third of the money was ever raised.

Similarly, emergencies in Gujarat, Bangladesh and central America in the past three years have mostly not received all the money promised. The humanitarian emergency in Afghanistan attracted more than $700m of pledges, but less than half that has been sent. Of the $100bn promised for debt relief, only $400m was received.

— John Vidal and Jamie Wilson, $2bn pledged, but will the world keep its promises?, The Guardian, January 3, 2005

(IPS also reports this in a news article titled: UN, Relief Groups Fear Aid Falling Behind Pledges and has some additional details.)

BBC aired its monthly public debate programs, Question Time. In the program on January 6, 2005, former UK government minister for development, Claire Short, noted that a lot of pledged money from governments is old money already assigned for other projects, which will now be redirected to this. However, what she also added was that it was sad that in effect, it was taking money from the poor to give to others in need.

This site's section on third world debt also has more examples of this, where countries have been promised debt relief, but sometimes it has never happened.