Saturday, October 24, 2009

Ending Aid Dependence: Asserting National Autonomy

Ending aid dependence: Asserting national autonomy

Yash Tandon interviewed by Pambazuka News
2009-10-22, Issue 454

In an interview with Pambazuka News, Yash Tandon discusses the problems of 'development aid', his differences with Dambisa Moyo's arguments in 'Dead Aid', the importance of Southern countries' right to autonomy and his own book, 'Ending Aid Dependence'.

PAMBAZUKA NEWS: Yash, how did you come to write 'Ending Aid Dependence?'

YASH TANDON: The book was written just before the September 2008 conference in Accra organised by the Organization for Economic Co-operation and Development (OECD) and the World Bank on the Accra Action Agenda (AAA). The AAA was based on the OECD’s Paris Declaration on Aid Effectiveness (PDAE). The PDAE, based on five principles, looked benign at first sight … until you began to analyse it in detail, looked at the fine print, and began to understand its implications. It was clear to me that hiding behind its benevolent exterior lay an insidious formula to subject aid-recipient poor countries to the collective discipline of the donors. Like colonialism that was sold to us as something ‘for our own good’ and in recent decades the ideology of globalisation and neoliberalism, the PDAE was packaged also as something ‘good’ for us, especially for Africa. As somebody said, I think it was Aristotle, there comes a time when out of a false good there arises a true evil. This is what the AAA was. So the aim of the book was to caution the developing countries against endorsing the AAA.

PAMBAZUKA NEWS: What were the biggest challenges in writing it?

YASH TANDON: The main challenge was twofold. The first was to meet the deadline of September 2008. I started writing the book in June 2008, and I was immensely relieved that I was able to finish and get it published just before the conference. The second challenge was to get the message across to the developing countries. The OECD and the World Bank could not be stopped, I am afraid, but I am pleased to say that once my book was in the hands of the delegates coming from the developing countries, many of them did begin to put to question the whole idea of ‘development aid’ as a genuine instrument of development.

PAMBAZUKA NEWS: The aid taxonomy that you have come up with is a useful tool with which to analyse aid and place it into categories. As you stated: ‘Aid can be placed in a continuum from left to right, starting with Purple Aid (based on the provision of global public goods), Yellow Aid (based on the principle of geopolitical strategic and security interests), Orange Aid (based on the commercial principle), and Red Aid (based on an ideological principle).’ How did you come up with these categories? Did the colour-coded work of the World Trade Organization (WTO) inspire you?

YASH TANDON: Actually not, there is very little inspiring about the WTO. Multilateral trade is important, of course, but the WTO is so deeply steeped in legitimising the outcome of asymmetrical power relations between the North and the South that it is the wrong instrument to advance the cause of multilateralism. No, I invented the colours myself. It wasn’t difficult. And the main purpose behind it was to disaggregate the phenomenon of ‘development aid’. Too much is made of the fact that some countries have met their 0.07 per cent of GNP quota for aid to the poor countries and others have not. It is when you deconstruct the aid package that you realise that these figures are quite meaningless, and often used for propaganda purposes. There is much hidden in the package that is counter-developmental; indeed, if I may say, imperialist.

PAMBAZUKA NEWS: But, surely, you cannot use the term ‘imperialist’ in describing the legitimate concern of countries in the North about, for example, the violation of human rights or corrupt governments in developing countries. If they use aid to make countries in the South respect human rights and be responsible to their people, what is wrong with that?

YASH TANDON: This is a complex question that needs much time to explain. I am aware that a number of our friends in the North, especially in the civil society, are disturbed about the conclusions I derive in relation to what I call ‘Red Aid’, which is in fact the most dangerous form of aid. I include the donors’ use of the aid instrument to enforce human rights and ‘good governance’ on our countries as the most intrusive, and indeed, imperialist, form of aid. Of course, we cannot endorse the violation of human rights, nor can we condone corrupt governments. But donors have often used ‘human rights’ as a cover to push money into many of our own civil society organisations in the South to advance their own agenda in our countries. And let's not forget that the Western nations have double standards on human rights. They are also selective about what instances of violations of these rights constitute legitimate for their intervention and which are not. The human rights issue is a minefield. And so is the issue of ‘good governance’. Donors are best advised to keep out of using their monetary clout to enforce human rights or good governance on our countries. But as I said, this is a complex question. I suggest you read the parts in my book in which I have discussed this issue.

PAMBAZUKA NEWS: In light of the current financial crisis, and your advocacy for more South–South cooperation mainly in respect to aid, do you believe that the financial crisis facilitates and brings the wanted cooperation forward? Or does the impact of the crisis inhibit it?

YASH TANDON: It is interesting that the impact of the current financial crisis is directly proportional to the degree of the South’s integration into the North’s globalisation agenda – the deeper the integration, the bigger the negative impact. This does not mean that we abruptly cut off from the North, but it does reinforce the point I made in my book about the imperative of the ‘national project’ as opposed to the globalisation project. Would the present crisis help or hinder South–South cooperation? Well, it is going to be a struggle. There are some in our own countries in the South who argue that we in the South need ‘more aid’ to get out of the crisis. I disagree. I think we need more national and regional ‘self-reliance’ on matters such as regional market creation, regional currency etc. The initiative taken by some Latin American countries joined by a few countries from the Caribbean to create the regional currency – the Unified System for Regional Compensation (SUCRE) – for example, is a step in the right direction. But as I said, this is going to be a struggle. I hope Pambazuka News will open space to debate this matter further.

PAMBAZUKA NEWS: As you have pointed out in your most recent article in Pambazuka News, 'G8 and Africa: Some give, plenty take', nothing has changed in donor countries' policies towards developing countries. Do you believe that the ‘national project’ (in essence, the continuation of the struggle for independence) has died in developing countries? Or conversely, have been there any events that point to a revival in the recent year?

YASH TANDON: Things are indeed changing. There are tell-tale signs that the Western world is on the defensive. It is losing its dominant and domineering position in the South. It is losing moral authority. Its global institutions such as the International Monetary Fund (IMF), the World Bank, the WTO and the OECD are losing legitimacy and credibility. The countries of the South, on the other hand, are beginning to reassert their national independence. Of course, it will take a long time before they gain total liberation from the economic domination of the West.

This is true even of countries as large as China, India and Brazil, where Western multinational corporations are able to use their lead in technology and intellectual property rights to penetrate production, distribution and financial systems. But the shifting balance of forces between the North and the South in favour of the South is a palpable and unstoppable force.

PAMBAZUKA NEWS: While the Non-Aligned Movement (NAM) is resilient, as you point out, last meeting in 2008, do you see it as a potential leader for the expansion of ‘policy space’ (the expansion of space to operate independently without restrictions from dominant global power-holders)? Where do you see the G77 and emerging powers like China in all of this?

YASH TANDON: NAM is a historical movement. There was a time after the end of the Cold War when its future was put in doubt, mostly by Western observers. But that was a myopic view of the movement. NAM was more than simply keeping out of the Cold War, it was also an assertion by the former colonised peoples that they wanted to be masters of their own self-propelled development. NAM also adopted certain principles regulating relations between states that were being systematically violated by the counties of the North – such as the five principles of non-interference in internal affairs, equality, national sovereignty, cultural diversity and identity.

I am pleased that the NAM countries were at least able to have the above principles enshrined in the final document at the Accra meeting on the PDAE, which my book discusses. The Accra document did not say if these principles also applied to North–South relations. So, yes, NAM continues to remain a live expression of the commitment to an independent policy space for the South. Emerging countries such as China and India, and the G77 countries in general, can no longer be taken for granted. Gone are the days of 1945 when the institutions of global economic and political governance were engineered without their effective participation. Gone also are the days when the WTO was thrust onto the peoples of the South without their effective participation. It is a different world now.

PAMBAZUKA NEWS: There has been much publicity given to Dambisa Moyo’s book ‘Dead Aid’. Her argument boils down to critiquing aid as a fetter against private accumulation, in essence a re-casting of the tired neoliberal mantra about the free market. That position has been in strong contrast to your own, yet some would say you have been surprisingly silent in critiquing her position. Why?

YASH TANDON: This is a very good question. No, I am not shy of critiquing Dambisa Moyo’s prescription for development. I recognise that this will take Africa backwards.

I have avoided confronting Moyo so far because I want to join forces with her to argue the case against development aid. I agree with Moyo that ‘development aid’ is no solution to our under-development. I agree with her that aid makes our governments accountable to donors rather than to our own people. And so on. At times, she makes an even stronger and more categorical case against aid than I do.

However, her proposed solution of opening up the African market and resources to foreign investment capital is not the way forward for Africa, or for the developing countries. To be sure, we in the South are still behind the West in terms of technology, and we do need technology. But the barrier to this technology is not capital inflow from the North. In fact, there is more capital outflow from the South to the North. The barrier to the South acquiring technology lies in intellectual property rights (IPRs) in which technology is encased. I used to be the executive director of the South Centre from 2005 to 2009. One of the major battles the centre (founded among others by Mwalimu Julius Nyerere) was to break down this stranglehold of IPRs on the universalisation of technology. Science and technology are a heritage of mankind, not a gift of the West to civilisation.

Moyo comes from a different world from where I come from. She comes from the world of finance, and it is not surprising that she should offer solutions closer to her experience. I come from the world of academia and active political struggle for the liberation of my country from the shackles of imperialism, a phenomenon which Moyo does not recognise. Lately, I have been involved in building the capacity of the countries of the South to negotiate in the WTO, the United Nations, the World Bank, the IMF and the OECD. From my experience I can say that the track Moyo is advocating is already losing effectiveness, credibility and legitimacy. She is right about ‘Dead Aid’ – the title of her book – but what she is advocating is a ‘Dead Road’.

PAMBAZUKA NEWS: As the former executive director of the South Centre, what are your thoughts on the recent Africa–South America (ASA) summit in Venezuela? Should we see this as a major event in South–South cooperation or as a stepping-stone to future cooperation?

YASH TANDON: What we are witnessing is a milestone in the road to South-South cooperation. Western mainstream media has been attacking President [Hugo] Chavez even though he has been repeatedly winning democratic elections. Hence the ASA summit has been maligned in the press. But we must remain clear in our mind as to what the ASA stands for. It stands for the South’s further liberation from the domination of the North. One of the most important things to have come out of the summit is the endorsement of the Banco del Sur (the Bank of the South) as an alternative financial system to the IMF–World Bank dominated global banking system. Of course, the Banco has to go a long way; its capital base is still small, and it is still evolving rules of financing development projects. But it has a bright future. It is interesting that several African countries have expressed an interest in joining the bank.

Another significant development is the evolving alternative currency in the southern hemisphere. The SUCRE can offer to the countries of the Latin America a real opportunity to break away out of the dominance of the dollar. He who controls money controls the economy. That has been our experience in Africa, where the IMF effectively controls our money. Money is a public good. It is not something that should be handed over to private banking. The Latin American experience may yet usher in a new concept of money, one that serves the people and not a few thousand from the corrupt elites of the banking establishment.

PAMBAZUKA NEWS: Do you have any future projects with the Southern and Eastern African Trade Information and Negotiations Institute (SEATINI)? Are there any publications on the horizon for us to read?

YASH TANDON: SEATINI, whose chairman I am, is an evolving civil society organisation. It is right now focused on the current negotiations in the WTO, and also the Economic Partnership Agreement (EPA) being negotiated between the African, Caribbean and Pacific (ACP) group of countries and the European Union. We are fighting against the EPAs. It is also involved in issues related to food security, land-grabbing in Africa, climate change and regional integration. I am myself engaged in applying my ideas on ending aid dependency to my own country, Uganda. I am taking this opportunity to revisit the history of our monetary policy, and to examining how and why we allowed ourselves to be chained down by aid and an externally controlled money system, and how we might break away from it. I am also doing some research and writing on African integration and regionalism. This is under threat from the EPAs, and continued fixation of our leaders to the flawed neoliberal policies of the Bretton Woods institutions. This is strange, since these organisations are themselves now bankrupt not only of capital but also of ideas. Out of these engagements, no doubt, will emerge some small publications that I hope will have useful policy recommendations to our governments. Through these writings I hope also to join the larger debate on how the African people can unite against ceaseless efforts by imperial forces to divide and conquer us.


* Yash Tandon is the former executive director of the South Centre in Geneva.
* Tandon's 'Ending Aid Dependence' is available from Pambazuka Press at £9.95.
* Please send comments to or comment online at Pambazuka News.

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