Jonathan Glennie, in his new book, The Future of Aid, proposes an alternative to foreign aid
There has been a lot of recent chatter in international development circles about whether foreign aid to developing countries is making any difference to reduce global poverty and inequality. Overseas Development Assistance or ODA, the share of taxpayer funding provided by OECD member countries to lower-income countries, is increasingly being seen as both condescending in its approach and dominating in its political power. Countries like Pakistan, are beholden to ODA from multilateral and bilateral donors, which propels sectors ranging from infrastructure and urban development, to education and health, to fiscal reform and women’s rights, to name just a few.
But despite the criticism on the purpose and efficacy of such aid, there has been very little done in terms of developing an alternative to it; perhaps because of the vast global bureaucracy that controls it and a colonial mentality that still makes many donors feel they are masters. And countries like ours, blindly comply with their terms and conditions.
Jonathan Glennie, in his new book, The Future of Aid, proposes one such alternative - global public investment, or GPI. The result of eight years of discussions and collaborations across the world.
Published under the shadow of Covid-19, when the world is scrambling for support at unprecedented levels, the book quite fortuitously, uses the pandemic as the push to demand more equitable public spending, which could ultimately lead to the “end of aid”.
Glennie, a development professional and human rights campaigner, defines GPI as concessional international public financing for global public goods and services, to meet global obligations like climate change, natural disasters, economic shocks and yes, pandemics. He distinguishes between traditional “aid” and GPI, in five ways; targeting more ambitious global goals (as opposed to scattered objectives); functioning on public finance (as opposed to private financing); removing the geographical focus off the Global North and South; developing a governance partnership giving all countries decision-making power (as opposed to only donors making the decisions in traditional aid); and changing the narrative on how countries view one another based on their wealth (removing the distinction between rich and poor).
In short, Glennie argues, that GPI will allow countries to contribute to a series of global public funds based on their financial ability to contribute, which can then be equitably redistributed back in time of need. Many such funds currently exist, such as the Global Fund to Fight AIDS, Tuberculosis and Malaria and the Global Fund for Vaccines and Immunization. However, GPI will enable all countries who contribute to be part of the decision-making process, as opposed to only the rich and more powerful.
Glennie is clear in his book that GPI is no magic bullet to equality and democratic public finance. In fact, he openly admits that there is still a lot of thinking to be done for the concept to be applied in real time. But it is a springboard for countries who have traditionally received only aid, to start thinking how they can move from being recipients to becoming collaborators.
But the concept that public finances be invested in public goods (as they should be), rather than given as “aid”, is one that also gives rise to many questions in today’s complex political scenario. The most important of these is whether current aid providers, including the IFIs, are willing to give up their role as central power brokers in aid provision. The book argues, that even though poor countries would still receive far more than they contribute, richer countries would continue to shoulder most of the burden, until other countries are able to come up to par. Whether this will lead to a replication of the current power structures aid perpetuates, is a valid concern.
Another question, is whether GPI could be applicable to countries which suffer from excessive elite capture, democratic instability and weak regional relations. One of the book’s core arguments, is that GPI will allow countries to sit across the table and decide how their contributions will be invested. Many countries in Africa for instance, have emerged as serious power brokers over the years who do have certain leverage over their richer counterparts. But many are still controlled by global geo-politics.
Take Pakistan. Can we expect our government to be able to sit across the table from the US or UK and still be able to control the narrative in terms of how much leverage we have based on how much we invest? How much control will for instance, an 80:20 share get us? Moreover, can we realistically expect that we and/or other South Asian countries will be able to sit across from India and civilly discuss the investment of our public funds? GPI would require a number of countries to completely put aside their political tribulations to create a retinue of funds that would be truly global.
And this equally applies to rich Western countries who use aid to further their own policy agendas of exerting the greatest control. For instance, relations between the USA, UK and European Union (post-Brexit), and China, India and Russia, are equally an issue of power struggle between these countries, as opposed to collaboration.
It also raises the issue of debt. Pakistan’s share of ODA as net of Gross National Income, the determinant of aid allocations by donors, has diminished over the last five years from 1.4 to 0.4 percent despite being one of the top ten ODA recipients in Asia over the last three years. We also stand at a debt liability of almost 98 percent of our GDP. Where would we muster the funds to contribute to GPI, if we no longer have adequate public funds to cover our own needs?
The book also talks about the rising public investments made by a number of emerging Southern powers, like Turkey, Mexico, and of course, China. But while this has vastly increased the amount of public funds committed to overseas development, they are in many ways, an extension of the traditional “aid” policies GPI hopes to eventually replace.
Another caveat to keep in mind, is that while GPI envisions greater global governance over public resources, it does so at a time when there also happen to be more doubts about the legitimacy and effectiveness of global public institutions, such as the World Bank and the IMF. GPI partnership and funding mechanisms will have to move away from the models used by such institutions for them to garner trust among nations that are suffering the brunt of hard loans.
Glennie argues for all the right values; legitimacy over public spending, democratic decision-making, equal redistribution of wealth, equality among nations and an end to the traditional thinking around rich and poor countries in the Global North and Global South. A global Expert Working Group has already been set up to deliberate on proposals for the implementation of GPI. But like any new approach, it needs to first jump through a set of hoops before clearing the way.
Which is why these questions are important to consider for the countries willing to adopt the GPI approach. The concept is crucial at a time when a Covid vaccine is finally available. Sadly, what should be a global public good, is currently being treated as a market commodity available to the highest, and richest, bidder. If anything, GPI establishes the vital need for all countries of the world to understand what a global public good actually means.
Global public investment may not be for all countries of the world. But, it is something that we at the receiving end of aid, could use to develop our own specific models of financial self-sufficiency and cross-country collaboration. At least to meet some of the most pressing needs of our time.
The Future of Aid. Global Public Investment
By Jonathan Glennie
Published November 30, 2020 by Routledge
Themrise Khan is an independent professional with over 25 years of experience in international development, social policy, gender and global migration. She is based in Karachi.