Millennium Development Goals for the Rich?

20 September 2010

The Millennium Development Goals (MDGs) are today’s global foreign aid agenda. Yet if we look at who's aiding whom, the world's pro-rich global agenda is rather more obvious.

Through many decades, declarations and mega-conferences, the United Nations and aid industry leaders have worked tirelessly to get governmental and non-governmental bodies and the media to sing from the same hymn book, to use the same discourse and tell the same story.  That story is about uplift for the poor, and admonitions toward the rich to be generous for those doing the lifting.  

Better than any previous proclamation of intentions, the MDGs have met needs for a single narrative.   It’s a liturgy for a broad church, encompassing a range of matters, from school attendance to clean water to the health of mothers and children.  Bundled together, these problems attract a diverse spectrum of issue-specific groups. The MDGs get them out of their silos and into a big policy coalition rallying under a single banner.  The approach matches mainstream media’s standard story line:  Someone is in distress. Help arrives. Distress is relieved.  All’s well that ends well.

Proclaimed at a major United Nations summit in 2000 and subsequently expanded in 2005, the MDGs’  neat packages of aims, sub-aims, indicators and timelines thus harness no-nonsense ‘results-based management’ of the neoliberals to the impalpable ‘human development’ goals of the social democrats. for pulling together policy coalitions, this has proven a good match.  Both approaches focus on descriptors of poverty, see practical problem-solving as the way to tackle poverty, and largely avoid crucial matters like inequality.  They keep troublesome political issues firmly off the table.  They are worthy and bland, a plain vanilla acceptable to everyone.

But in obfuscating causes, the MDGs don't get us much closer to eradicating the problems. The MDGs may draw attention to important facts about poverty and the stunting of human capabilities. They imply – and this is also one of their merits -- that those afflictions are preventable and can be radically reduced. Yet the MDGs fail to say anything meaningful about why they persist. As a trenchant new UNRISD report argues, the MDGs “focus on measuring things that people lack to the detriment of understanding why they lack them"[1].   In this sense the MDGs are a distraction.   

One reason for that silence may be the embarrassing fact that, as countries such as Vietnam have shown, success in reducing poverty stands a better chance where governments pursue disciplined development policies wholly at odds with the market fundamentalist kind required by donors in the past thirty years.

Praised in speeches, ignored in budgets

Governments of low-income countries pay MDGs no real attention, least of all when drawing up budgets.   Instead, leaderships pay attention to the IMF and others controlling the serious money.   And what does the IMF think about the MDGs?  As revealed in a recent study of MDG politics, IMF staff clearly don’t take them seriously, saying such things as, “we mention the MDGs in the introduction of reports but they don't change anything" [2].  Indeed there’s no evidence of any fundamental change.

Do donors take the MDGs seriously? Certainly they all sing hallelujah about them, and often use them to justify their aid budgets.  But they have yet to put more money where their mouths are.

Donor spending in the four aid priority sectors in MDG number eight -- basic education, basic health, nutrition and water/sanitation -- have changed hardly at all.  At the outset of the MDG era in 2001-03, those sectors accounted for about 10.4 percent of total rich country (OECD) aid;  whereas in the period 2006-08 they accounted for about 10.9 percent [3]. But then again, donors have been careful never to make any ironclad commitments. Everything is voluntary and at their discretion.  Nothing they promise, or refuse to do is politically or juridically enforceable.   By contrast, most aid recipients have to toe the donor line, or face unpleasant consequences.

Who is aiding whom?

But just who is aiding whom?  That question is rarely probed, but is vital to understanding why the IMF and its associates continue to promote market fundamentalism. For certain interests in rich countries, results of these policies have been hugely rewarding.  This is apparent if we follow the money.  Especially since the late 1990s, most global flows, after netting out foreign aid, foreign direct investment and remittances, have gone from poor to rich, as summarized in the following table.   

Yearly average net transfers of financial resources to lower-income world regions 2000 - 2008

Africa (negative) -$50 billion
East and South Asia (negative) -$239 billion
Western Asia (negative) -$105 billion
Latin America & Caribbean (negative) -$65 billion
Transition Economies (mainly former East Bloc (negative) -$75 billion
Total (negative) -$534 billion

Source:  UN-DESA, 2010, World Economic Situation and Prospects 2010, New York: UN Department of Economic and Social Affairs, table III.1, p. 73.  This compilation draws on data from IMF, World Economic Outlook Database, October 2009; and IMF, Balance of Payments Statistics.   These are recorded flows; many illicit flows go unrecorded and are therefore not reflected here.    

It is worth recalling that in 2002 a team of World Bank economists [4] calculated that from $40 to $60 billion in extra aid outlays would be needed, alongside other measures, in order to achieve the MDGs – amounts equivalent to about one-tenth of those recorded as flowing from the poor to the rich.  The upward re-distribution of wealth to the rich has added to bottom lines in the financial sector, especially on Wall Street and in Offshore Financial Centres.  Other winners include poor country elites, whose wealth is commonly stashed in rich jurisdictions.

The prevailing relationship, therefore, is essentially predatory.  In it the MDGs and aid have merely compensatory functions, something with echoes of the past.  The essential relationship of feudalism, as described by the French historian Marc Bloch, was predation compensated by charity.   
 
Despite their new talk about ‘poverty reduction and growth’, the citadels of the aid system in Washington DC continue pushing the same formulas that frustrate equitable development in poor countries and facilitate the haemorrhage of resources and funds from them [5].  Under these conditions, trying to achieve the MDGs is like trying to walk up an escalator going down.

 

Footnotes:

  1. UNRISD 2010, Combating Poverty and Inequality. Structural Change, Social Policy and Politics, Geneva: United Nations Research Institute for Social Development (UNRISD), p. 2 [ www.unrisd.org ]
  2. David Hulme 2010, ‘Governing Global Poverty? Global Ambivalence and the Millennium Development Goals’ in J. Clapp and R. Wilkinson (eds), Global Governance, Poverty and Inequality, London: Routledge
  3. OECD Stat.Extracts. ‘ODA by Sector’.  http://stats.oecd.org/   accessed 19 September 2010.   Note: because OECD data does not include the category “nutrition”, the category “Dev. food aid, Food Security ass.” has been used as a proxy.
  4. S. Devarajan, M. J. Miller and E. V. Swanson. 2002, Development Goals: History, Prospects and Costs. World Bank Policy Research Working Paper. http://econ.worldbank.org/files/13269_wps2819.pdf
  5. International obstacles to the MDGs and how they can be removed are discussed in a clearly-argued paper: Third World Network, Achieving the Millennium Development Goals (MDGs) Requires Fundamental Reforms in the International Financial Architecture, TWN Briefing Paper, September 2010. [ www.twnside.org.sg ]

Possible
title or supra-tag line:

Millennium Development Goals for the Rich?

 

Possible
sub-title:

 

 

 

by
David Sogge

 

Lacking
any visible competition, the Millennium Development Goals (
MDGs)
are today’s global anti-poverty agenda. Yet reviewing progress ten
years on the world's pro-rich global agenda is rather more obvious

 

Through
many decades, declarations and mega-conferences, the United Nations
and aid industry leaders have worked tirelessly to get governmental
and non-governmental bodies and the media to sing from the same hymn
book, to use the same discourse and tell the same story. That story
is about uplift for the poor, and admonitions toward the rich to be
generous for those doing the lifting.

 

Better
than any previous proclamation of intentions, the Millennium
Development Goals (MDGs)have met needs for a single narrative. It’s
a liturgy for a broad church, encompassing a range of matters, from
school attendance to clean water to the health of mothers and
children. Bundled together, these problems attract a diverse
spectrum of issue-specific groups to get out of their silos and join
a big policy coalition rallying under a single banner. The approach
matches mainstream media’s standard story line: Someone is in
distress. Help arrives. Distress is relieved. All’s well that ends
well.

 

Proclaimed
at a major United Nations summit in 2000 and subsequently expanded in
2005, the MDGs’ neat packages of aims, sub-aims, indicators and
timelines thus harness no-nonsense ‘results-based management’ of
the neoliberals to the impalpable ‘human development’ goals of
the social democrats. for pulling together policy coalitions, this
has proven a good match. Both approaches focus on descriptors of
poverty, see practical problem-solving as the way to tackle poverty,
and largely avoid crucial matters like inequality [Link to
http://www.guardian.co.uk/commentisfree/2010/sep/14/equality-un-millennium-development-agenda].
They keep troublesome political issues firmly off the table. They
are worthy and bland, a plain vanilla acceptable to everyone.

 

It
is this obfuscation of the causes that means that too often the MDGs
are part of the problem. The MDGs may draw attention to important
facts about poverty and the stunting of human capabilities. They
imply – and this is also one of their merits -- that those
afflictions are preventable and can be radically reduced. Yet the
MDGs fail to say anything meaningful about why they persist. As a
trenchant new UNRISD report argues, the MDGs “focus on measuring
things that people lack to the detriment of understanding why they
lack them"
1.
In this sense the MDGs are a distraction.

 

One reason for that
silence may be the embarrassing fact that, as countries such as
Vietnam have shown, success in reducing poverty stands a better
chance where governments pursue disciplined development policies
wholly different from the market fundamentalist kind required by
donors in the past thirty years.

 

Praised
in speeches, ignored in budgets

 

Governments of low-income
countries pay MDGs no real attention, least of all when drawing up
budgets. Instead, leaderships pay attention to the IMF and others
controlling the serious money. And what does the IMF think about
the MDGs? As revealed in a recent study of MDG politics, IMF staff
clearly don’t take them seriously, saying such things as, “we
mention the MDGs in the introduction of reports but they don't change
anything"
2.
Indeed there’s no evidence of any fundamental change.

 

Do
donors take the MDGs seriously? Certainly they all sing hallelujah
about them, and often use them to justify their aid budgets. But
have they put more money where their mouths are? It doesn’t seem
so.

 

Donor
spending in the four priority sectors in MDG number 8 -- basic
education, basic health, nutrition and water/sanitation -- have
changed hardly at all. At the outset of the MDG era in 2001-03,
those sectors accounted for about 10.4 percent of total rich country
(OECD) aid; whereas in the period 2006-08 they accounted for about
10.9 percent
3.
But then again, donors have been careful never to make any ironclad
commitments. Everything is voluntary and at their discretion.
Nothing they promise, or refuse to do is politically or juridically
enforceable. By contrast, most aid recipients have to toe the donor
line, or face unpleasant consequences.

 

Who
is aiding whom?

But just who is aiding whom?
That question is rarely probed, but is vital to understanding why the
IMF and its associates continue to promote
market
fundamentalism. For certain interests in rich countries, results of
these policies have been hugely rewarding. This is apparent if we
follow the money. Especially since the late 1990s, most global
flows, after netting out foreign aid, foreign direct investment and
remittances, have gone from poor to rich, as summarized in the
following table.

Net
transfer of financial resources to lower-income world regions, 2000 -
2008


Region

Average annual
nettransfer in US $

Africa

negative
50 billion

East
& South Asia

negative
239 billion

Western
Asia

negative
105 billion

Latin
America & the Caribbean

negative
65 billion

Transition
Economies (mainly former East Bloc)

negative
75 billion

Total

negative
534 billion

Source:
UN-DESA, 2010,
World
Economic Situation and Prospects 2010
,
New York: UN Department of Economic and Social Affairs, table III.1,
p. 73. This compilation draws on data from IMF, World Economic
Outlook Database, October 2009; and IMF, Balance of Payments
Statistics. These are recorded flows; many illicit flows go
unrecorded and are therefore not reflected here.

It is worth recalling that in
2002 a team of World Bank economists
4
calculated that from $40 to $60 billion in extra aid outlays would be
needed, alongside other measures, in order to achieve the MDGs –
amounts equivalent to about
one-tenth
of those recorded as flowing from the poor to the rich.
Thredistribution of wealth to the rich has added to bottom lines in
the financial sector, especially on Wall Street and in Offshore
Financial Centres. Other winners include poor country elites, whose
wealth is commonly stashed in rich jurisdictions.

The prevailing relationship,
therefore, is essentially predatory. In it the MDGs and aid have
merely compensatory functions, something with echoes of the past.
The essential relationship of feudalism, as described by the French
historian Marc Bloch, was predation compensated by charity.

 

Despite
their new talk about ‘poverty reduction and growth’, the citadels
of the aid system in Washington DC continue pushing the same formulas
that frustrate equitable development in poor countries and facilitate
the haemorrhage of resources and funds from them
5.
Under these conditions, trying to achieve the MDGs is like trying to
walk up an escalator going down.

1
UNRISD 2010,
Combating
Poverty and Inequality. Structural Change, Social Policy and
Politics
, Geneva:
United Nations Research Institute for Social Development (UNRISD),
p. 2 [ www.unrisd.org ]

2
David
Hulme 2010, ‘
Governing
Global Poverty? Global Ambivalence and the Millennium Development
Goals’ in J. Clapp and R. Wilkinson (eds),
Global
Governance, Poverty and Inequality
,
London: Routledge

3
OECD Stat.Extracts. ‘ODA by Sector’.
http://stats.oecd.org/
accessed 19 September 2010. Note: because OECD data does not
include the category “nutrition”, the category “Dev. food aid,
Food Security ass.” has been used as a proxy.

4
S. Devarajan, M. J. Miller and E. V. Swanson. 2002,
Development
Goals: History, Prospects and Costs.

World Bank Policy Research Working Paper.
http://econ.worldbank.org/files/13269_wps2819.pdf

5
International
obstacles to the MDGs and how they can be removed are discussed in a
clearly-argued paper: Third World Network,
Achieving
the Millennium Development Goals (MDGs) Requires Fundamental Reforms
in the International Financial Architecture
,
TWN Briefing Paper, September 2010. [
www.twnside.org.sg
]

 

About the authors

David Sogge

Based in Amsterdam, David works as an independent researcher and writer. As an associate of the Norwegian think-tank NOREF, he currently focuses on public control over transnational flows affecting societies on the global periphery. Professional activities since 1970 provided a basis for books and articles on the politics of foreign aid, and on Africa, particularly Angola and South Africa. Evaluative research assignments have taken him to Vietnam, Eastern Europe and countries of the former Soviet Union. Trained at Harvard, David earned his graduate degrees from Princeton and the Institute of Social Studies in The Hague.

Follow David on twitter: @DavidSogge