Millennium Development Goals for the Rich?

21 September 2010
Article

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 percent3. 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 economists4 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 them5. 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 ]