If foreign aid is not the solution for global poverty, what is? There are enough statistical and case-study research by academics and experts in development economics, which have long demonstrated conclusively that private foreign direct investment (FDI), conducted by multinational enterprises (MNEs), promotes growth and raises wages. With recent technological advances, there is no surprise that contemporary economic theory suggests that technological adoption is the key driver of long-term growth.
Is there any evidence to suggest that Rwanda’s economic advisers and leadership understand these economic premises and concepts? The message of self-reliance with actions to lure in FDI comes in fact, from the President himself whose recent message was: “We have understood for a long time that you can’t cure poverty without democracy. The only cure is through business, entrepreneurship, and innovation”. His stance on business and free-market is backed by the World Bank’s Doing Business 2013 report which states that Rwanda ranks 52 out of 185 on ‘ease of doing business’ and eighth on ‘ease in starting a business’.
A combination of safety and security, zero-tolerance for corruption and consistent economic growth— which is forecast to be over seven percent this year, are indications of strenuous efforts by the leadership and Rwandans to free themselves from the poverty enslavement; hence most observers need recognise these achievements and praise the efforts being by all stakeholders in the development process of this post-genocide state.
Rwanda’s journey to self-reliance is a progressive one and the receipt of economic aid will remain essential the foreseeable future. For those unfamiliar with the politics of aid, there two types of political considerations to note; (1) ‘Low politics’ that fosters the continuation of aid, even when it has failed at its stated objectives of promoting development and reducing poverty. (2) ‘High politics’ which involves international diplomacy as the generosity of a donor country X towards a recipient county Y carries a huge amount of influence.
In the light of recent events involving the UN report alleging Rwandan government support to the M23 rebels in the Democratic Republic of Congo and the subsequent withdrawal of budget aid to Rwanda by some of the Western donor countries, one understands the likely consequences of these unexpected decisions on the government’s budget management; but the full assessment on socio economic impacts on the most vulnerable in the country will take some time. To remind the reader, the debate is not about whether donor countries can and should have political influence over the recipient ones because in reality they do, but the analysis is solely based on the adherence to the principles of the 2005 Paris Declaration on Aid Effectiveness that includes ‘ownership, alignment, harmonisation, managing for results, and mutual accountability’ which in this case was not respected by Rwanda’s donor partners. Given that Rwanda has done tremendously well in using aid effectively by lifting a million people out of abject poverty i
n the process, it is puzzling that some aid donor countries can unilaterally either suspend or withdraw budget aid for their own political expediency.
Some of the questions one ought to be asking are: - Were the decisions to suspend/withdraw aid made with the respect and in the spirit of the Paris Declaration? How well did the donors understand and contextualise the UN report before taking decisions? Did the donor countries question the report or simply had blind faith in the UN Experts, and if so why? Was there any consensus among the donors in suspending or withdrawing aid? Why using aid as a political stick on a country that has adhered to the principles pertaining to aid effectiveness? Is it morally justifiable to undermine economic stability and poverty alleviation programmes in a post-genocide country? Did the aid donor examine the short, medium and long term consequences of these decisions on the targeted country and the region as a whole? And finally, will the use of aid change the systematic failure to achieve peace in the region? The above questions remain unanswered and hope the readers can come up with possible answers to what appears to be a co
mplete violation of both bilateral and international agreements. In all that confusion however, two things are crystal clear- the donor countries are facing economic and political uncertainty all of which limit their ability to ‘do good’ and Rwanda as, a recipient country fully understands, hence resulting to the crafting of its own survival kit such as the ‘Agaciro Development Fund’.
In the end, the political temptations to misuse aid on the part of both donor and recipient countries are well documented and it is up for the countries in question to adhere to the principles of the Paris Declaration, but more importantly to work on mutual respect and genuine partnership. If donors are to avoid a crisis of conscience and truly committed to these values, then these should be the only conditions, instead of other illicit political conditionalities that ultimately cause more harm than good. Rwanda’s march to ‘aid independence’ is a long one but there are reasons for optimism given its strides towards the UN’s Millennium Development Goals, and there is no doubt that foreign aid is not the primary solution to global poverty – few, if any, experts would dispute that fact. A post-genocide Rwanda understands these uncertainty times and the need to find alternative for real solutions.
The writer is a postgraduate student in Diplomacy and International Law based in London, UK