A Defence of Tied Aid

This essay by Jasper Sodha was Highly Commended in The 2020 HART Prize for Human Rights which is an International Competition

The Importance of Tied Aid with respect to Human Rights 

Tied (or conditional) aid is portrayed as toxic by the media, criticised for its perceived controlling and restrictive nature. This seems to contradict the beneficent and altruistic philosophy of aid. Afterall, research shows that due to the monopolising power of donor countries, the cost of goods and services can rise by up to 30%1. It is true that certain types of tied aid are counter-productive, especially when combined with colonial-type exploitation. However, as argued by this essay, tied aid is far more intricate; both indirectly and directly helping to protect human rights in the LICs and MICs that HART work with.

Tied aid places contracts in donors’ hands, away from local firms and suppliers. However, donors tend to be HICs, with more rigorous safety measures and higher technological capabilities. This ultimately leads to improved quality, longer-lasting projects, as expertise is externally sourced, bringing new technologies and ideas, providing a reference for future domestic innovation. For example, there are an estimated 10,000 Chinese companies in Africa and 920 in Nigeria2, furnishing Nigeria with new and improved rail, power and telecommunication services. Specifically, the Abuja-Kaduna Railway, will help Nigeria improve access to education thereby adhering to Article 26 [i, iii] of the UDHR3. Projects like the Mambila HEP project4, help to provide energy to some of the 45.6% of Nigerians who don’t currently have access, complying with Article 25 [i]3. Whether called ‘development investment’ or ‘tied aid’, the picture is the same; tied aid indirectly protects human rights.

Critics argue that tied aid is not economically beneficial; jobs are lost due to the influx of foreign workers developing the project. External workers are actually a net-benefit for the host nation, as they tend to have both a greater ability and propensity to spend money. They still require food, lodging and basic services, contributing to the local economy, and ultimately the nation’s GDP. This is particularly prevalent in projects in Uganda and Nigeria. If contracts had gone to local organisations, there would be no significant net increase in demand. Furthermore, this external workforce has the ability to pay for ‘high order goods and services’, helping to reduce income and regional inequalities in areas where tied aid projects operate. By extension, this tied aid is indirectly responsible for protecting the right of equal access to public service and to adequate standards of living – Articles 21[ii] and 25[i]3. Foreign workers can provide tangible examples of women in a plethora of roles and responsibilities; helping to break entrenched views of specific gender roles, enforcing Article 13 – that all human beings are,” born free and equal in dignity and rights.” Perceptions of women’s equal rights to education access can be altered without overtly ‘Westernising’ the local culture. The improved economy, reduction in social disparities, and further entrenchment of the UN’s UDHR into society is the result of tied aid and the workers that it brings. Tied aid indirectly protects human rights.

However, tied aid’s most important function is the direct protection of human rights. Due to fear of potential domestic and international backlash, measures to protect life [Article 3] without discrimination [Article 2] are enforced3. With countries investing billions of dollars of public money into developing countries, they cannot appear to overtly support corrupt regimes. As tied aid forms close relationships between nations, the recipients must act progressively, or their aid may be withdrawn. This pressure has, in Uganda, led to a reduction in corruption. President Museveni initiated a sting to send a message to his,” notoriously corrupt civil service.6” If aid is given without conditions on how it should be used, then there is a high risk that it will be embezzled, disadvantaging those that need the aid the most. Due to rife corruption and lack of progress, there is often little development investment in countries like South Sudan and Syria; ranked the 2nd and 3rd most corrupt countries in the world respectively, according to the CPI7. Tied investment aid encourages countries to be less corrupt, so that they don’t forgo aid. Sizeable aid grants and investment help to directly protect human rights [Article 1]3, against corruption.

Uganda’s increasing aid correlates perfectly with significant reductions in gender inequality, reinforcing Article 1, that “all human beings are born […] equal.3” Since the new millennium, official aid received by Uganda has skyrocketed by 130%8. Meanwhile the GII fell from 0.647 to 0.532 in the same period9. Thus, aid can and does reduce gender inequalities.

It can be seen that both directly and indirectly, tied aid, despite its negative press coverage, is beneficial economically, socially and technologically for the long-term development of countries that HART works with. Yet critically, it helps reduce corruption whilst advancing human rights, such as gender equality. Tied aid is sometimes a ‘necessary evil’ for the equal and prosperous development of the world.


Abbreviations

LICs – Low Income Countries (Defined by World Bank as economies with a GNI/Capita of $1,025 (2018) or less, using the Atlas Method) 

MICs – Middle Income Countries (Defined by World Bank as economies with a GNI/Capita between $1,026 and $12,376 (2018), using the Atlas Method) 

HART – Humanitarian Aid Relief Trust 

HICs – High Income Countries (Defined by World Bank as economies with a GNI/Capita of $12,376 (2018) or more, using the Atlas Method) 

ODA – Official Development Assistance 

HEP – Hydro-Energy Production 

GNI – Gross National Income 

UN – United Nations 

UDHR – Universal Declaration of Human Rights 

CPI – Corruption Perceptions Index 

GII – Gender Inequality Index (Where 0 is perfect gender equality and 1 is perfect gender inequality)


Bibliography

  1. OECD (29 September 2009)., ‘Aid Untying: Is It Working? Thematic Study on the developmental effectiveness of untied aid: evaluation of the implementation of the Paris declaration and of the 2001 DAC recommendation on untying ODA to the LDCs’ http://www.oecd.org/development/evaluation/dcdndep/44375975.pdf pp. 1,10. [Accessed 29 January 2020] 
  1. Kartik, J., Kassiri, O. and Sun, I.Y., Mckinsey & Company., June 2017. ‘The Closest Look Yet at Chinese Economic Engagement in Africa’ https://www.mckinsey.com/featured-insights/middle-east-and-africa/the-closest-look-yet-at-chinese-economic-engagement-in-africa [Accessed 30 January 2020] 
  1. The United Nation’s Universal Declaration of Human Rights https://www.ohchr.org/EN/UDHR/Documents/UDHR_Translations/eng.pdf [Accessed 4th February] 
  1. Monks.K., CNN., 15 September 2017., ‘Nigeria Announces $5.8 billion deal for record-breaking power project’ https://edition.cnn.com/2017/09/14/africa/nigeria-china-hydropower/index.html [Accessed 31 January 2020] 
  1. The World Bank., 2017., ‘Access to electricity (% of population)’ https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS [Accessed 31 January 2020] 
  1. Aglionby.J., Financial Times., 27 April 2017., ‘Uganda’s corruption crackdown aimed at attracting investors’ https://www.ft.com/content/a851b7da-1557-11e7-b0c1-37e417ee6c76 [Accessed 1 February 2020] 
  1. Transparency International., ‘Corruption Perceptions Index 2019’., https://www.transparency.org/cpi2019 [Accessed 2 February 2020] 
  1. The World Bank., ‘Net Official Development Assistance and Official Aid Received (current US$) – Uganda’., https://data.worldbank.org/indicator/DT.ODA.ALLD.CD?end=2017&locations=UG&start=1960&view=chart [Accessed 7 February 2020] 
  1. United Nations Development Programme., Human Development Reports., ‘Human Development Data (1990-2018).’, ‘Gender Inequality Index (GII)’ http://hdr.undp.org/en/data (Using 2017 statistics for comparable correlation with aid received) [Accessed 8 February 2020]