The End of International Assistance?

“International Help will end before extreme poverty eradication”,. This is how, Indermit Gill, the Director of the International Development Center from Duke University, established it, he tries to translate the idea that the Official Help to Development is a type of assistance tending to extinguish.

His article is located within a framework of cuts in aid to the development of United States and United Kingdom, being this two countries the main donors of the world, so this would not be a minor fact.

When investigating the long term tendencies in foreign aid, the author states that Official Help to Development tracked by the OCDE has quintupled since 1960, from thirty two thousand million to one hundred and fifty eight thousand million american dollars, on prizes from 2015.  But at the same time the world economy has also grown. It is possible to describe the international context from examples coming from the East of our continent. “Most of us assumed that the external help will continue until extreme poverty eradiques. But a look back shows that this is not happening. China, India, Indonesia and South Africa stopped receiving aid some years ago, but still have millions of people living with under than 1,90 dollars per day. In the same way, it is expected that the countries with medium income take care of their population in an extreme poverty state themselves. With more than half of the sub saharan African population living now in medium income economies, the article tell us that we should wait that African aid, that has been increasing since 2000, found its limit and starts to decrease”, says the author.

Indermit Gill arrives to the conclusion that the future of international assistance could be financing: With China increasing its presence as inversionist, financist, constructor and donor since 2000, the financing for the development is being tested for the second time in Africa. This continent is looking more and more to the East, to China, India, Turkey and other Asian economies (between 2000 and 2015, China granted loans of approximately one hundred thousand million dollars to Africa). The occidental help, based on altruism and political influence, complements with the oriental finance, mainly driven by the own interest. Nevertheless, the author has his doubts and declares that is too soon to say that things will work better this time. The FMI has warned that the relation debt/PIB of african economies is growing rapidly. There are also concerns about the political and ecological effects that destabilize these investments. But this time, commerce with Asia is growing and the investments in infrastructure are notable. 2018 could be the year in which the world in development decides whether the exterior aid and finance for the development should be complements or substitutes.