Monetary aid to govts questioned

Press, 2 August 1977, Page 10

Monetary aid to govts questioned

under-developed countries cieties and multi-national corporations rather than through Governments and international agencies has been suggested by Dr A. T. G. McArthur, a reader icultural economics and Agricultural Science. recently returned to New Zealand after spending facultv of agriculture in Swaziland of the University of Botswana. Lesotho, and Swaziland, said that he had gained the general impression that it was much more difficult to offer effective aid to a less developed country than he had thought. He agreed that aid should not be given for political purposes, but for rather different reasons than those who objected to donor countries using aid to twist the arms of developing countries. said, tended to help countries which were formerly their colonies, partly through a feeling of responsibility and partly because they had investments thev wanted to protect. That New Zealand did not want unfriendly super powers in its backyard accounted for its interest m the Pacific. In southern Africa, the British were the dominant donors and in Soutn America it was the Americans. “I am afraid if you have been a colonial Power you will be a very unpopular source of aid and you will be suspected.” he said. The British are by far the most unpopular in southern Africa, the Americans in South America, and the Australians and New Zealanders in the Pacific. The net result is that old colonial Powers are unable to generate much political power from aid, nor is it easy for them to be a credible source of real help. We are learning this in the Pacific at the moment ” There was also another political angle to the aid business which was frequently overlooked. Donors channelled their aid through the government of the recipient country, and thus the funds channelled through the government increased its power in relation to other sectors of the economy, and in his view a powerful government and a weak private sector

could be counterproductive. He gave some examples of the sort of undesirable results that could flow from this. In a country where, with the help of aid. government agencies had been set up that seemed inappropriate for its stage of development, the Labour Department’s control of firms was based on Western standards The result of this was tha' it was almost impossible to persuade employed men to work. African labour could not be motivated by the leadership techniques used by New Zealand businessmen. Only the threat of being sent down the road had any motivationai value, but a man now had to be given a written warning on three occasions before he could be dismissed. If New Zealand was committed to keeping politics out of aid, it should not only be given to countries without attaching any political strings, but it was necessary to be very' hesitant about channelling it trhough the government of the country concerned Dr McArthur said he was most amused to hear the director of Corso suggesting that “we should just send cheques to the recipie nt countries.” The Pearson committee had recommended that funds should be channelled through the multinational agencies like the I .N.D.P. and the World Bank. He said that he had been impressed with many of the United Nations people he had met in southern Africa at grass roots level, but he was afraid that while national bureaucracies were prone to inefficiency it was chronic in international bureaucracies. Dr McArthur therefore suggested that aid might be channelled through the private sector — and here he asked why not select the most effective of the missionary societies and help them? There were missionary societies throughout the world dispensing social services to needy people and they were chronically short of funds. Better value for money would be obtained from a missionary than from a bureaucrat. He also suggested using multi-national corporations as a vehicle for aid. All the effective economic development in Swaziland had been done by the Commonwelath Development Corporation from Britain in association with multi-national corporations. Once enterprises were successful the asset could, perhaps, be sold to the local people. Dr McArthur also advis-

ed that it was desirable to specialise in one or two areas of aid and become very efficient at them. New Zealand should specialise in small-scale water supply and irrigation schemes. The British had put in a few small irrigation schemes for Swazi peasants. These meant that even' family had its irrigated allotment, which were well looked after providing fresh vegetables all the year round. There was almost no maintenance. As far as New Zealand was concerned, he said, it should move out of the Pacific area, if politics was to be kept out of aid, and encourage countries which had not been colonial masters to run the aid programmes; and in turn it could direct its attention to areas where others had been the colonial masters.