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2006-2007: Organisasjonenes roller:

Civil Society in the Age of Market Fundamentalism
Challenging Development Assistance and Colonialist Conditionalities

Av Alejandro Bendaña

Denne artikkelen er skrevet av Alejandro Bendaña, ved Senter for internasjonale studier (CEI) i Nicaragua, og vil i bearbeide form inngå som en hovedartikkel i boka "White Mans Burden", som kommer på Fagbokforlaget, i samarbeid med IGNIS, høsten 2006. Boka vil også inneholde bidrag fra Demba Dembele (Senegal), Hellen Wangusa (Uganda), Frank Pascual (Filippinene), Alica Raymondo (Filippinene) og Antonio Tujan (Filippinene).

Why official development assistance does not achieve what it sets out to do has much to do with its own underpinnings and assumptions about development and politics.  Factors such as political power and political interests are cast aside in favour of assumptions about a benevolent or inevitable market driving societies, nations and the globe.  Vast unemployment and poverty exists along side the need of societies to engage in work.   But since the economic system—and with it the concept of economic growth or economic health—is not geared to bringing together supply with demand, social wellbeing with economic wellbeing.  Instead we live under a profit-driven global system seemingly indifferent to unemployment (or predicated on it) and driven by the demands of profits and giant corporations.

If the goal of a nation is political independence (and for many outside of it and a few inside, it is not), then it behoves not only economists and development specialists to work with activists to secure an economic growth that can achieve or consolidate political freedom.  Freedom necessary is necessary for people to make up their own minds about growth models and, if required, the proper external collaboration that helps sustain the exercise of the right of self-determination.   Discussions should flow from this proposition:  development, development assistance, corruption, poverty-alleviation, etc.  Without proper political parameters and explicit assumptions, the jargon becomes meaningless at best, and suspect at worst: efficacy, efficiency, transparency, impact, etc.  They are meaningless from the standpoint of the welfare of a people, but significant from the perspective of profit and corporations.  What do we choose to measure and how? 

As with wealth, power is either democratized or it is concentrated.   Set aside and instead substituted by debates of policy adjustments on the part of the powerful governments that do not want that same power to be questioned—or worse still, push for policy changes that while appearing to make concessions and defend values – i.e.. “positive conditionality”  in reality concentrate even more power in the hands of the North and reinforce the system. 

If the role of power is assumed or denied, then most of the ensuing debate loses becomes unreal and abstract.  What is being denied (or simply not addressed)?  One, that there are global structures of power and, second, that those structures are in the hand of a tiny elite.   This is not a question of faith or ideology, but simply facts that can be (and are) revealed by data available from a number of sources, including those of the chief culprits themselves.   Development and underdevelopment, enrichment and impoverishment, are a single phenomena—a conception of development and globalization—that explains the mounting evidence of growing inequality across and within countries.  

Of course, the practitioners of development economics and preachers of good governance are the last to consider themselves orthodox.  And in truth, in many rich government development agencies, aid officials would probably stand out as liberals when compared to the “realpolitikers” in the foreign or defence ministries.  Not that there is an abundance of successful development interventions, but more of a need to defend the existence of their professional and bureaucratic apparatus.  Nonetheless questions of power permeate the workings of so called development assistance, determining and justifying the application of crude power…again in the name of development and democratization!

The simplest of analytical matrixes would take the form of asking who benefits from conventional economic development assistance.  But first ask why the separation of conventional economic growth models from “development” economics in the first place—a question also posed by the conservative critics of the field.  Development assistance agencies concede the argument from the start—by and large there is no fundamental questioning of neoliberal macroeconomic frameworks. 

Debt Relief

That the same institutions that bring you debt dependence can also serve as financiers of development strains credulity.  Now we are told that debt relief savings are a new form of development assistance (it is included in the book) but that its release and spending is subject to even more conditions than before—and once again in the name of getting the support for the poor.

Who benefits from debt and the debt system?  The lending institutions in the first place, whose own reason for being and high living standards depend on countries borrowing and paying before borrowing again.   Elementary logic would lead one to posit that nationally democratically decided repudiation of existing debt obligations—repudiation on account of its illegitimacy—could go a long way for making countries free from the need to solicit further loans.   This is different from renegotiation of debt payment schedules, and even the writing off of uncollectible debt, both commonly practiced in the banking world.  The popular alternative posits that if debts are illegitimate in their origin they should be cancelled, and not “negotiated” or “rescheduled” to make their payment and borrowing more sustainable.  Release from debt payment could then, in principle, open real paths for “poverty reduction” and “financing for development.”

Debt relief initiatives are increasingly laden with “conditionalities” that by their very nature undermine the sovereignty of people to determine their own path to development.  Worse: the same initiatives, as much as what comes under the title of “aid”, have a proven harmful effects, and keep South economies tied to the interests of global private profit. Independently of the fact that cancellation of the debt may release some funds that can be used for basic services, it does not free the South from the system of debt bondage: which is why Jubilee South and other organizations insist that there must be unconditional 100% debt cancellation.

If the proposal (for self aid, among others)  seems radical it is because it rejects the reigning “debt sustainability” framework defended principally by the IFIs but also by the bilateral “donor” agencies who insist on clearance from the IFIs before committing most “aid”.  Debt sustainability in this context is founded on an exploitative system that has a long history and continues to this very day.  Jubilee South rejects the “debt relief-debt sustainability framework” that increasingly forms part of the development assistance modus operandi.  What is lacking is the will to address the more fundamental question of the illegitimacy of the debts claimed from the South.  In short, peoples of the South should not be made to pay for illegitimate debts -- debts that did not benefit people, that financed projects causing displacement of communities and massive environmental damage, debts that paid for corruption or failed projects, debts contracted through fraudulent means by illegitimate governments, debts with grossly unfair terms and harmful conditionalities, debts that sustained  militarization and dictatorships,  debt contracted in the context of unfair trading and financial international economic relations, debts incurred by the colonial plundering of resources, by slavery, debts for which peoples of the South  have paid many times over in money and in blood, debts that are far greater than the US$2.3 trillion dollars that the North claims from the South, an historical, economic, social, and ecological debt accumulated over centuries of plunder and exploitation by North with the collaboration of Southern elites.

The scrutinizing of development aid must begin with the “lending” agencies themselves.  Jubilee South and others have called for open, transparent and participatory External Audit of the lending operations and related policies of the International Financial Institutions, beginning with the World Bank and IMF.  Audits are also necessary in the South: debt campaigns, movements, people’s organizations and NGOs are campaigning for the conducting of country-level independent Citizens’ Audits of Debts claimed from South countries as well as calling on South governments to conduct transparent, open and participatory Government Audits (ex. Parliamentary) of these debts.   The audits would examine debt-corruption, that is, the origins and causes of the debt problem, taking stock of effects and impacts on a case by case basis, showing the dubious and illegitimate character of the debts, identifying those responsible, demanding accountability, and strengthening the basis  for urgent changes in national policies on the debt and related issues.

Trade as Aid

It is now conventional wisdom to state that the best form of aid would be to insure greater market access in the North for exports from South countries.  Not necessarily a substitute for development aid said the Blair Commission on Africa, but certainly a needed mechanism to insure greater new financing for development.  Recent increases in the international market prices of basic commodities notwithstanding, few would deny that the terms of trade have historically been unfavorable to exporters of basic commodities—and not simply on account of free market dynamics but also because of the force of monopolistic trading power in the North.  Thus market-access campaigns stress the demand for the lowering protectionist barriers in the North to key exports to the South. 

But is free or fair trade a sustainable development-generating practice and as a solution to poverty?  Or as the World Bank, also a self-interested critic of protectionism, would put it: globalization can be made to  work for the poor.  As with the debt campaign, South organizations have questioned the strategy being proposed from the North to deal with the unequal trade problem and corporate-driven globalization in general.  Joining South governments in the lobbying of the World Trade Organization or for improvements in the terms of Free Trade Agreements is, from the perspective of movements and more radical NGOs, the wrong answer and a mistaken strategy--  Counterproductive in fact because the real issue is not export agriculture or market access.  Many activists believe that global campaigns should focus not lobbying the WTO but on stopping it altogether as an indispensable step in the broader strategy of containing corporate-inspired drive to liberalize of trade and trade related areas.  

Responding to a 2002 Oxfam market-access trade campaign, Walden Bello, Director of Focus on the Global South, insisted that it that the goal was to resist the “expansion of the free trade mandate and the expansion of the power and jurisdiction of the WTO, today the most powerful multilateral instrument of the global corporations, is a mortal threat to development, social justice and equity, and the environment.  And it is the goal that we must thwart at all costs, for we might as well kiss goodbye to sustainable development, social justice, equity, and the environment if the big trading powers and their corporate elites have their way and launch another global round for liberalization ….”[1]

Simply insuring market-access does not take people in the South closer to the construction of an alternative development model, nor does it the anticipated increase in revenues less dependent on the “generosity” of Northern countries.  The “fair trade” finance for development strategy and campaigns presuppose the continuation of an export driven model inherited from the colonial period—an arrangement South elites were all to happy to maintain.  If autonomous development and concentration of resources for development is the goal—economic nationalism—then the push for liberalization in developing countries needs to be opposed, not broadened.  Stopping the WTO – the key force for liberalization – means stopping the advance of “free trade” and all the concessions it implies involving agriculture, services, industrial tariffs along with new issues such as government procurement, competition policy, investment, and trade facilitation: Concessions that would strip a nation of the capacity to define and defend its own path to development.

“Trade not Aid” or “Aid for Trade”?  Neither one.  As both will give detracting prominence to the export-led growth of model and all the dependence that it implies.  The WTO and the FTAs would simply lock in the Washington Consensus making it difficult, but not impossible, for subsequent governments to withdraw from treaty commitments.  Nobel laureate Joseph Stiglitz entertains no illusions about trade liberalization: “Even if trade liberalization leads to more trade, and even if trade leads to more growth, and even if the benefits of trade liberalization exceed the costs for the country as a whole, particular groups may be worse off.  Indeed, there may be more losers than winners.  And even if the winners could have compensated the losers, they seldom do”. [2]

Sustaining Poverty

If the mission is to tackle poverty, then it behoves us all to ask what poverty and how does it come about.    The World Bank will now admit that the emphasis on private sector-led development did not result in alleviating poverty, that increased economic growth rates do not always translate into greater social welfare and less inequality. 

Alleviate or eradicate poverty—there is a world of difference between the two conceptions, the first conceding defeat and the second assuming the possibility of a political will and economic capacity to accomplish eradication.  In other words, poverty must be contained lest the poor rebel and capital suffers—politically manageably or sustainable levels of poverty that allows the system to alleviate but not eradicate, because that would amount to a transfer of power to the poor themselves away from the powerful.  Although even the World Bank speaks of empowerment—the self-interested use of the notion makes no reference to the disempowerment which must also accompany the enfranchisement of the poor.  In short, in a world or nation of finite resources, development (and justice) is not a win-win proposition.

Vandana Shiva states that it is useful to separate a cultural conception of simple, sustainable living as poverty, on the one hand, from the material experience of poverty which is a result of dispossession and deprivation, on the other.  “If we are serious about ending poverty,” she underscores, “we have to be serious about ending the systems for wealth creation which create poverty by robbing the poor of their resources, livelihoods and incomes.  Before we can make poverty history, we need to get the history of poverty right….  People do not die for lack of incomes.  They die for lack of access to resources.”[3]

Jobs and resources: apparently development experts often miss the two fundamental needs of poor people in the South.  Development assistance on the other hand is more about capacity-building and micro-enterprises, or just simply subsidizing the budget of governments in the South.  Yet the more the policy fails, the more its defenders insist that more of the same is needed this time with more State cooperation or enablement.  Because the development paradigm springs from the economic growth model practiced in the North, there arises a domestic front composed of those in the North who are also being impoverished by the same neoliberal logic and programme principles.  A recent academic study in the U.S. showed that during the 1980s, 13 percent of Americans in their 40s spent a year or more below the poverty line, but in the 1990s, that percentage nearly tripled, reaching 36 percent.[4]  In Germany, between 1997 and 2004, the share of German workers earning “low pay”, as defined by the OECD, rose from 16% to over 20%, says the German Institute for Economic Research in Berlin.[5]

In the light of the undeniable concentration of wealth in the rich countries, every effort is made by rich country governments o hide, to confuse, divert attention away from the facts and the historical and present day realities—North and South-- that condemn them.  And social scientists or labour unions that come out with their own facts are dismissed and threatened for not abiding by the “correct” language and methodologies.  George Orwell warned us of the language doublespeak in which today’s economics departments, development agencies and media are masters-- Language as an instrument for expressing and not concealing or preventing thought, to make lies sound truthful and suffering inevitable or self-imposed.   Michel Foucault reminded us, power is everywhere and those who dominate (the development assistance) discourse hold power. 

A historical reminder would also be in order beginning with the recognition that most industrialised countries developed under conditions contrary to the Washington Consensus and the neoliberal bible.  The US and the countries of Western Europe tended to give a central role to the state in the direction of economic affairs, practicing strong protectionism and providing subsidies for domestic industries and agriculture.[6]   But history lessons or rationale arguments will not convince those who benefit from the present global structure and its chief political (and military) enforcers.  What wan can always anticipate however is that the power structures will necessary relegitimize their ideology by introducing new formulaic discourse that is build on appeals to “development”.


The World Bank dominates today’s development assistance discourse and sets the tones for almost all governmental development agencies in the North.  As the leading global development actor and thinker, the World Bank’s influence is out of proportion to the actual percentage of rich country development assistance as its influence spills over into the bilateral and other aid spheres—a phenomena that has led some analysts to speak of the “worldbankification” of  major “donor” development policies.[7]  The implications are clear for no matter how much bilateral agencies claim to be independent and critical of past development policies of the 1990s (including the Washington Consensus), the fact is that the World Bank-backed policies are still the same albeit constantly subject to repackaging.  Its role is reinforced on account of the Bank’s role, along with the IMF,  of gatekeeper for much development bilateral assistance (and increasingly for the definition of neoliberal relief and post-war reconstruction frameworks)[8]

For all the talk of poverty reduction strategies and pro-poor growth, the Bank continues to insist on a strategy based on the “the creation of a sound investment climate as a prerequisite for private sector development and market-led growth”.  New commissions and new acronyms appeared and Bank/donor agency officials claimed that structural adjustment was a matter of the past.  But when one researcher asked if the Bank’s launching of a high level body-Commission on Growth and Development was an attempt to create a second Washington Consensus, the reply by the Bank was indeed revealing: “No.  The Washington Consensus is a set of sound principles.  We all agree that markets are at the basis of the successful and durable development experience we know.  We all agree that openness improves growth prospects.  And we all agree that macro stability improves the incentives for investment and growth.  The problem is that these principles have in some cases been applied mechanistically, as a formula, rather than principles cognizant of country specific realities.  There have been justified all sorts of changes in principles and institutions, rather than the ‘binding constraints’ that are preventing countries from achieving growth.  There is one formula that applies to all countries.  With this as a background the objective of the Commission is to bring forth the possible understanding of growth we have today”.[9]

And the Bank’s understanding informs if not dominates the understanding of rich country development agencies.  An independent study of Norwegian development assistance concluded that “the World Bank’s approach to structural adjustment, privatization and conditionality all beg the question of whether this institution is an appropriate vehicle for Norwegian development assistance, and what mandate Norwegian development authorities have for using this institution”.[10]

Obviously, worldbankification could be a blessing and not a problem if the World Bank itself could be fixed.   Many of the Bank’s critics believe it can be fixed—others do not.  Policies can change in form but not in essence, particularly if there is an unwillingness to abandon core neoliberal assumptions and policies. 

Aid Conditionality or Aid Colonialism?

Breaking or de-linking from the global economic system may not seem to be a viable proposition.  But lessening the dependence does make sense if it includes a recognition that the present forms of assistance do more harm than good, that is takes nations away from the possibility of autonomous equitable development.  Most development assistance, if not all, is today conditioned on the adoption of the Washington Consensus neoliberal measures—Measures that are intended to exercise control and restructure the societies of the South to serve the interest of the international corporations and the economic and geopolitical agenda of a few powerful nations.  It is folly therefore to look expect social alleviation from the same institutions (the International Monetary Fund and the World Bank together with their partner regional development banks and export credit agencies) that for more than sixty years have been the enforcers of the system. 

Increasingly however as the promised “take-off” into economic growth fails to materialize, the IFIs, the “donor community” and their intellectual pundits, rather that question their presumptions, instead blame the victim for failing to adopt practices of “good governance”.  Development aid has failed, we are now told, not because of its assumptions and nature, but because “governments don’t work”—because corrupt governments and corruption does not allow the poor to benefit from development assistance.  So the answer, says the World Bank, is a good governance recipe-- while shrouded in the vocabulary of anti-corruption, transparency and accountability—while insisting in rigid adherence to the economic neoliberal governance as part of the same conditionality package. And the role of civil society, they add, is not to question whether the development aid concept and model is fundamentally flawed, but to help insure that development assistance become more effective and reaches the poor, and that the government not stand in the way—in short that citizens act as enforcers for the international bankers who neoliberally define the parameters of that “aid”.

Corruption is narrowly defined by the bankers and fundamentally posited as a governmental problem—a government in the South, of course.  As though every corrupt transactions did not have at least two parties, and the most corrupt transactions a national with an international party.  As if the dominant corporate culture—as evidenced by the Enron case—will not “forever stand as the ultimate reflection of an era of near madness in finance….  of management practices …and a corporate culture poisoned by hubris”[11], as if those practices are not exported, as if “stolen cash is not moved around foreign bank accounts, as if corruption has not been historically exported to developing countries and took the form of colonialism then, and legalized theft today.   In more honest moments, the pundits will admit that the real concern with corruption has more to do with the impediment it represents to the profit-making system and foreign investors in particular whose contracts are not “enforced”, whose business is subject to competition from the public sector, where the costs (i.e., taxes) become stifling, etc      

That political conditionalities are on the donor agenda today is in no small measure a muted recognition that the economic conditionalities –the neoliberal package—has not delivered improved living and employment necessities.  But rather than recognize the limits and the logic of a profit-centered model, the development ideologues that the solution to the problems generated by intervention is more intervention, that is greater encroachment on government autonomy in the name of good governance.  Having gravely undermined the possibilities of autonomous development through the Washington Consensus “reforms”, new conditions are being attached to loans and investment undercutting any local democratic process.  The problem of content is as grave as the process:  democracy cannot be imposed from the outside—there is no such thing as a democratic colony.  Yet a new version of Mision Civilizatrize to engineer the installation of States, policies and even societies favourable to the interests of capital (“investment-friendly environment”) at the expense of real or potential improvements in social welfare.  Defenders of placing political conditions on the concession of debt relief or aid allotments appear as the other side of the structural adjustment-related conditionalities—in the final analysis both assume a colonial stance by demanding political changes in exchange for loans or credits.

Aid and conditionalities have failed even from the “creditor” perspective, as governments in the South tend to pay only lip service to the structural reform and governance conditionalities.  Laws can be passed and anti-corruption commissions can be created, forums established to project the pseudo participation of civil society—but by and large the real impact of the “reforms” on the poor is negative, or in any case the cost of the neoliberal policy measures far outweighs any benefits derived from the application of “debt relief” measures, or anti-corruption mechanisms.  Responding to global pressures, the G-8 in Scotland agreed to write off up to 55 billion in debts owed to the World Bank, IMF and the African Development Bank.  Debt-relief schemes, however, continue to be conditional as new ‘performance criteria’ were added to the usual macro-economic ones: in the name of relief, new governance conditionalities materialized.  From the standpoint of Jubilee South, the deal had “more to do with the need of the IFIs to salvage their credibility and initiative a new cycle of indebtness”. 

Debt relief worked in Nicaragua—it became relief for the bankers who obtained the proceeds, with IMF blessing, for the canceling of high-yielding government interest bonds. And debt relief works for the wealthier countries, particularly the United States, which most stands to lose from a fundamental change in the debt-centered global financial system—a system that, according to Joseph Stiglitz,  provides the richest country in the world with 2 billion dollars a day in loans from poorer countries—“even as it lectures them on principles of good governance and fiscal responsibility”.[12] 

It is true that in the past few years “donors” have raised doubts about the effectiveness of conditionality.  In 2005, the UK Department for International Development (DFID) called for the reassessment of donor approach to conditionality recognizing that conditionality could not buy the reforms and policy changes which countries do not want in the first place—those hastily mounted “reforms” are not sustainable.  DFID  when on to announce that the “UK government  would not make its aid conditional on specific policy decisions by partner governments or attempt to impose policy choices on them (including in sensitive economic areas such as privatization or trade liberalization)”.[13]  Under pressure, the Bank itself increasingly substituted references to “conditions” by “benchmarks” that countries had to achieve and maintain in order not to affect the release of funds.  Contents remained the same, concepts shifted, and external imposition continues basically unabated. (The fact that Finance Ministries anticipate the conditions and incorporate them in their program submissions to the Bank does not change the character of the relationship or of the imposition).   For its part, the UK government has distanced itself from conditionalities applied by the Bank (allowing Washington to do the dirty work) while admitting that they will still “look to the IMF to provide an assessment of a country’s macroeconomic position, independently of IMF financing”.  As one study stated, “As long as the IMF is capable of doing the arm-twisting for them, the British are happy”. 

Much the same conclusion can be derived from the Norway where a new government stated that Norwegian development assistance was not to be spent on “programs that require liberalization and privatization”.  The positions however cannot be reconciled with British and Norwegian support to the World Bank and its insistence on “harmonization” or “alignment”.  Likewise complementary pressure from other donor countries for greater “coherence” for aid effectiveness pushes the putative free-thinking British, Canadian or Norwegian aid agencies to follow the Bank and remain loyal to the broader development paradigm.  

According the Halifax Initiative, a Canadian NGO concluded in its own in-depth study of Canadian bilateral aid, “Recent progress in procedural harmonization on the part of donors is reflected more often as policy harmonization with World Bank/IMF macro-economic and sectoral polices”.  By the same token, the fact that the same agencies accept the Bank’s Poverty Reduction Strategy Papers frameworks, and the fact that PRSP in essence maintains structural adjustment criteria and does not allow contestation of those “fundamentals”, leads to the conclusion that innovation in thought and practice is more fictional than real.  PRSPs have to pass through the bank and IMF benchmarks must be met if debt relief and further loans are to materialize.[14]   Obviously the space and finance for autonomous development would have to be sought out elsewhere.

Unfortunately, for governments and many NGOS the debate is not whether or not conditionalities are an acceptable power instrument, but which and how many conditionalities need to be applied and how.  The same circles that criticize the Washington Consensus are often the first to insist on governance conditionalities and the use of the development assistance carrot as a stick as part of a “coordinated donor leverage” intended to force or block changes in government policy.  Sadly, some NGOs and CSOs in the South readily take up watchdog assignments, funded by the donors, to keep pressure on a Government.  Democracy is distorted in the name of democracy as national NGOs take their case to foreign embassies and not to the people themselves.  Principles are set aside along as is any recognition that the same “donors” are responsible for impoverishment and worse. 

Another variant of conditionality takes the form of so-called debt swaps or relief linked to environmental projects (Ecuador, Indonesia).  Sometimes, somewhat to the “apolitical” Bank’s embarrassment, bilateral donors inject political criteria prevails as a condition for direct budgetary support or other aid--freedom of the press (Kenya) and a free election (Nicaragua).  Fine objectives but the means are faulty and dangerous--in addition to the implicit recognition of the illegitimate debts that “swaps” and “relief’ may imply, there is the authority that is readily assigned to the World Bank enhancing its power over governments and societies (what some have denominated mission-creep or mission sweep) or what can be more clearly termed colonialism.  National and bilateral “donor” agencies look at NGOs as implementation agencies for a World Bank/IMF defined “development” agenda and model: instruments of policy and politics defined in the North providing a superficial images of “consultation”, “ownership” and “participation”.  

Unsurprisingly, many social movements turn down government/donor invitations to “participate” in the making of economic policy.  Refusal is based on the recognition that real policy decisions will be made in Washington and that the neoliberal “fundamentals” are not open to debate. Whatever the talk of “ownership”, conditionality insured that the accountability of politicians was to Washington rather than its own constituents.   Moroever, there is a political price paid for participation in PRSPs or other donor-driven “civil society” initiatives.  Democratization movements suffer and more fundamental social agenda points are not addressed.  Cleavages emerge between intellectual, urban based NGOs and poor majorities urban and rural often congregated in more radical movements or unions.  A comparative review of PRSP processes in Africa, Latin America and Asia undertaken by three independent NGOs found that

 … From the standpoint of the CSOs closest to the interests of the poor, the real issue was whether that space can be used effectively to challenge structural adjustment and structural and global injustice.  Another question posed insistently in the various workshops was whether the CSOs are consciously or unconsciously diverting scarce human and organizational resources away from fundamental development and mobilization work, or giving confusing signals as to where they stand in regard to corporate-driven globalization . . .Where civil society formations have achieved a certain degree of maturity, their advocacy traverses a wide spectrum of issues, and most often includes the advocacy of policies that directly challenge those prescribed by the IMF and the World Bank.  Many concluded that where governments joined the IMF/WB in making economic reform prescriptions a non-negotiable matter, then the possibility of meaning of genuine participation, broad based consultation, citizen ownership and even democratic process were all being pre-empted.[15]  

Eurodad, a debt and development network based in Belgium, summed up the dilemma when posing the question “although we NGOs and other advocates of change in the development industry are winning a few policy battles in our assault on the acronyms, are we losing the war for social and economic justice?”[16]

Still, the listing of new conditions attached to “aid” and loans now  reads like a Bill of Rights .  They include fine sounding obligations by creditor government to engage in  “pro-poor spending” (Rwanda)  benchmarks and the modalities of the exploitation of natural resources (Chad, Congo),  political and civil rights.   Good governance becomes a catch all employed by the World Bank or add new conditions and insure even greater adherence to economic (neoliberal) governance conditions.  That some countries are exempt from scrutiny on account of big power or big corporation interests for geopolitical reasons does not seem to merit concern.  Indeed, many NGOs and CSO including Churches in the North, and some in the South, believe those new (“positive”) conditionalities are warranted and necessary.    In addition to the anti-corruption measures, human rights and freedom of the press conditions are applauded, with little or no concern over the implications for a country’s sovereignty and right to develop its own economic policies.  This plays precisely into the hands of the World Bank and its onerous “mission creep” or expansion of power, becoming the political gate-keeper for assistance, joined by  the IMF which inspects the macro-economic front requisites and issues the green light for the entry of donor funds.   And of course, it is World Bank officials that must be brought into the country with the pre-determined anti-corruption and good governance policy schemes. 

Charles Abugre, head of advocacy and policy at Christian Aid, states accurately that 'To monitor compliance often requires even greater involvement and power of donors in domestic governance. It is like saying that new forms of colonization are acceptable on human rights grounds. This is dangerous. Yet, there are cases where human rights abuses, dictatorship and corruption are at such a level that the impact of debt relief and aid will be to strengthen repression and enrich a few than promote development.'   Of course, his is not to deny that rights abuses, dictatorship and corruption may impact adversely on the use of external funds (or debt relief savings), that indeed resources could be used to strengthen repression and enrich an elite or that in some cases (Myanmar) external pressure may play a valid part.

No doubt it is a delicate dilemma where often social concerns leads activists from the South to demand that donors attach conditions to their assistance and for the use of debt relief-generated resources.  Donors will then further empower the World Bank and the IMF to expand their oversight and control powers. 

Asked about the dilemma, the renown poet and anti-Apartheid fighter, Dennis Brutus, from Jubilee South Africa responded, “ It seems to me that both the IMF and Bank are inherently corrupt institutions, because they systematically transfer the wealth of poor countries to the North. While they are asking their clients - dictators and other ruling elites - to clean up their act, our job is still is to demand the abolition of this much more broadly corrupt system.”   This is not theory, Brutus pointing to the ongoing campaign to boycott World Bank bonds.

Brutus was then asked “But what do you do if you're in Nairobi or Brazzaville or Harare, then? Would it help to have Kibaki or Sassou-Nguesso or Robert Mugabe - who just caused a massive inflation spurt by repaying the IMF long-overdue debt - even more under Washington's thumb”?   His reply: “Each case is different. Ask the progressive movements in those countries, and take the lead from them! Unless you have the mass of the citizens participating in the debate over resource inflows and outflows, you will just see elites being legitimised and empowered… we will want to control resources and stop corruption in the future, in Africa and everywhere else.'[17]

Cracks in the System

A shfit in the development paradigm imples a shift in power, and with it the revamping of the model of development assistance.  It is difficult to foresee deep reforms emerging from present day policy discussions.  Rather it will be events outside of the policy frameworks that will, as always, force shifts in thinking and action. 

Crisis have a way of disempowering institutions, and when it crisis affects the principal ideological and political doorkeepers of the system—the International Financial Institutions—then, objectively, forces demanding structural change can advance on to the scene, including the policy scene. 

The World Bank and the International Monetary Fund, the two pivotal institutions dominating the economies of the South, are in the midst of their most serious crisis in years—a crisis that provides the opportunity for weakening their domination of the South.  Because the IMF, like the Bank, depends chiefly on loan repayments for its own budget,  this virtual boycott by the big borrowers spells big trouble for the IMF.  The World Bank, for its part, is also in the midst of a budget crisis.   Countries such as Thailand, Philippines, China, and India are no longer borrowing from the IMF, burned as they were by the disastrous effects of the policy recipes that were handed down to them in the early 1990’s.  Now there is an even greater movement led by countries such as Brazil and Argentina who are actually paying off their debts to the IMF in order to get greater freedom of action on a national scale and possibly on regional levels also.  Indonesia, another major debtor to the IMF (7.6 billion), has announced it will repay the IMF by the end of 2007.[18]The IMF’s best customers are leaving it with the result, as reported by The Economist: “the fund’s budget is shrinking and the moral of its staff is sinking.”  As the loan/interest financing model collapses, the IMF is increasingly living beyond its means in violation of the cardinal code it preaches for others: “the belt-tightening this implies has not gone down well with staff, who show little taste for the austerity they are notorious for prescribing to others.”[19]

With the deepening crisis of the two institutions, the critics sense an opportunity for putting in place a radical strategy for the outright disempowerment of the Bank and the Fund.[20]   That disempowerment is also crucial to people in the North because what is being challenged is in essence an ideological model that propagates the “marketization” of public goods, common goods and spaces, that is spreading everywhere and is a central issue of social justice.  Disempowering the IFIs opens up greater spaces for democratic development, and it also weakens their capacity to respond with typical aggression against the new wave of economic nationalism.

Another Development Assistance is Possible?

There are preconditions to the articulation of a new development aid theory and policy.  There are campaigns and reforms that can promoted for the here and now.  But those campaigns also have the responsibility to educate people as to the limitations of the reform or relief, and why these just are steps toward the required structural change.   

Education must raise awareness of the existence of paradigms and paradigms shift.  That shift would, first of all, be predicated on societies in the rich country that have the courage and education to accept that the wealth of their countries was built upon the blood and exploitation of the South—that there is no other way to explain the industrial revolution without the sacking of people and wealth of Asia, Africa and Latin America.  Just as there is no way to explain the poverty of the South today without reference to that history, to that looting, including the internal colonialism practices against indigenous communities and immigrants in the North.  Development assistance ceases to exist—it becomes historical reparation and retribution.   Historical awareness cannot be divorced from morality and moral responsibility—there is  moral reading and redressing of history:  Repentance and apologies are not enough: the consequences of slavery and aggression must be assumed, and not in the form of words alone.

A new paradigm would rest on a more humanistic definition of development.   Development defined as a socio-economic transformative process whose positive political manifestation is democracy.  Sovereignty exists to help protect the territorial space in which that transformative democratic process would take place in an autonomous manner (the right to self-determination).  The subject is the people and their nation who are not developed from above or from the outside: Which is not to deny the extraordinary importance of an enabling or hostile (imperial) environment that increasingly interacts negative or positively on the transformation process (Corporate globalization v. Popular Sovereignty).   Tellingly we do not have ready examples of enabling environments on a national scale, although within nations struggles have taken place so as to assist peoples, communities, ethnic or indigenous groups within the nation to express and defend their culture and resources).  The development challenge therefore is a two fold struggle—the struggle for democratic globalization coupled with the national struggles to exercise the right to self-determination. 

For example, the new “assistance’ paradigm would take us away from arguing “debt relief” and instead posit “debt cancellation”, along with the recognition that the South is the true creditor.   One could argue that if all debt is cancelled then there would be no need for foreign assistance at all.  The notion of debt relief has now been accepted by the World Bank,that of debt cancellation by important NGOs and Churches in the North, but advocacy of full-scale reparations and restoration remains largely a South campaign platform.   The IFIs argue for debt sustainable including the writing off of debt that cannot be paid, but more with an eye to preserving their “client’s” credit-worthiness and particularly the capacity to contract even more debt, and remain faithful tributaries of the global corporate system. 

The problem is less the present day levels of debt than the skewed economic international economic system that thrives on debt repayment as a key channel for the present day net flow of resources from South to North.  Under this scheme, debts could be wiped out today and ten years later they would re-accumulate.

Revisiting Development Ethics

David  Ellerman, a long time World Bank staff and now academic,  stresses unchanging and erroneous assumptions of development that lay behind World Bank-inspired development assistance doctrine:  If the goal of development assistance is to foster autonomous development, then most aid and "help" is actually unhelpful in the sense of either overriding or undercutting the autonomy of those being "helped." [21] Autonomy in turn, whether community or national, is a also a political consideration and as such cannot be divorced from the role of the State in either helping support or suppress it—to protect it from a hostile environment or serve a midwife for external exploiters. That said, a “government-less”, while conceivable and occasionally necessary in extremely authoritarian situations, can become a formula for disempowerment inasmuch as peoples and communities are deprived of the right and the possibility of utilizing this still powerful instrument of development which is the State.  Having the State abdicating its legal and social responsibilities is not the solution to terrible, corrupt government and impoverishment.  The principle of national peoples’ sovereignty cannot be set aside by anyone in the name of a humanitarianism or development—this only tends to reinforce neoliberal ideological suspicion of the State.

While the current debate over development ethics is framed from an institutionalist perspective, turning the spotlight onto relations and processes within the donor/funder world (not just between ‘donor’ and ‘recipient’) is politically revealing.  David Mosse and the currently burgeoning school of ‘ethnography of aid’ pose a key question of whether development aid (and development workers) are shaped by the exigencies of the same organizations.  They point to a fundamental ‘disconnect’ between development agency policy discussions and development practice and purported participation on the ground.  Having worked for years for development agencies, Mosse recounts a “war of ethics” erupting on account of its findings as the aid world, particularly DFID, scuttled to defend themselves, as the “aidnography” as it points to development policy as a vehicle that functions to mobilize and maintain political support--that is to legitimize rather than to orient policy, so that “success” or “failure” are policy-oriented judgements that obscure project effects.[22]  Mosse observes: “an intense emphasis on current policy burdens projects with (‘participation’ or ‘governance’) which…given the way things actually happen….may have little bearing on the actual reason for the socio-economic [models] have”.[23]

For David Ellerman, the two principal forms of unhelpful "help" are social engineering and charitable relief. Social engineering has failed, and the Bank in frustration is now pushing development practice, particularly in Africa, towards what he considers the other form of unhelpful help, namely, long-term charitable relief. 

The ethical table must be turned on the ‘donors’ and the governments they represent.  Questions of transparency, accountability and corruption are just as ethical as they are matters of governance and development.  If development interventions are to be condoned then its defenders are under the obligation to restate and discuss what values they have in hind when drafting the strategies they intend to “apply”?  How should such ethically charged problems such as poverty and exclusion—but also gross enrichment, inequality and discrimination—be addressed.  Popular organizations and citizens need to demand open analysis and discussion of ethical challenges and dilemmas that accompany development and democratization.

As an alternative to present day assistance,  Ellerman argues for the shifting the locus of the development initiative from what he terms the “would-be helpers to the doers (recipients) of development”. He  presents a model for shifting initiative that are indirect, enabling and autonomy-respecting.  He draws on eight representative figures in the fields of education, community organization, economic development, psychotherapy and management theory including: Albert Hirschman, Paulo Freire, John Dewey, and Søren Kierkegaard demonstrate how the major themes of assisting autonomy among people are essentially the same.  What emerges, he states, is a more coherent alternative "way of seeing" the relationship between aid organizations and aid recipients based, with suggestions on how to re-engage the aid agencies more as "helpers" than as "doers".  Helpers trying to provide autonomy-compatible assistance to “doers” would:

  • help must start from the present situation of the doers—not from a "blank slate",
  • helpers must see the situation through the eyes of the doers—not just through their own eyes,
  • help cannot be imposed upon the doers—as that directly violates their autonomy,
  • nor can doers receive help as a benevolent gift—as that creates dependency.

But the principle of “doers” in the drivers—which is to say majorities and the governments they may chose for themselves—is one that cuts against the grain of colonial thinking and historical big power behaviour.  As witnessed in South America, the growing number of governments propelled by the notions of self-direction and autonomy has met with the unabashed hostility of the Western powers, with the US in the lead.  doers must be "in the driver's seat"—which is the basic idea of autonomous self-direction.[24]

A New Aid Model in Practice: ALBA (Bolivarian Alternative for the Americas)

Nationalistic forces in Venezuela and Bolivia in power today are challenging the new global neoliberal order.  And they are joined and complemented in that resistance by the longstanding struggle of diverse social movements, such as peasant movements for food sovereignty in the South or citizens' movements in the North, to build massive pressure on their governments not to agree to further liberalization in agriculture, services, and other areas being negotiated—where mass street action can act together with key governments. 

The new administration of President Evo Morales in Bolivia decided not to sign a new agreement with the IMF—a decision that goes far beyond issues related to financing needs, as the financial institution intends to make people believe.   It is rather a reflection on the new government’s determination to recover the economic sovereignty and thus the dignity of Bolivia.

 Development Planning Minister, Carlos Villegas, when he stated during a press conference: “We have pointed out, from the very first day of our administration, that conditionalities are over in Bolivia. Development priorities no longer come from abroad, nor from international institutions and priorities are defined by the Government.[25]

George W. Bush however has of course another idea of development and democratic priorities.  Asked about the nationalistic policies of Bolivia and Venezuela, Bush stated ``Let me just put it bluntly - I'm concerned about the erosion of democracy in the countries you mentioned . . . I am going to continue to remind our hemisphere that respect for property rights and human rights is essential for all countries.”.

Property rights and human rights—in that order: small wonder that there are discrepancies, particularly where the concern is for the property of foreign multinationals (which in any case have not been expropriated).  As for democracy, with duly-elected President Morales having an acceptance rate of over 80 percent at the polls (last week of May), the critique may have more to do with policy than with democracy.  Bush’s true concern revolves around the changes taking place in South America and the efforts of Morales and Chavez to build a different development order beginning with the taking control of national energy sources, initiating a different trading and development cooperation model, and thereby challenge US plans not only for a hemispheric free trade zone, but the Northern insistence on dictating the model of development and international economic engagement, including its respective development “aid” component.  As the president of the Bolivian Senate, Santos Ramirez, noted: "Bolivia and Latin America are no longer the servile democracies that tolerate...poverty and the surrendering of sovereignty."  Even though there was no outright expropriation of foreign corporations, Morales made it clear that “the looting of our natural resources by foreign enterprises is over.”

A new scheme of development cooperation—based on the recognition of sovereignty, as opposed to its dismissal—takes the form of reshaping commercial relations, beginning with Venezuela and Cuba.  The Bolivian Alternative for the Americas (ALBA) is taking a huge step forward by way of the agreement signed in April between the three countries.   The logic could not differ more from the development and free trade principles bandered by the US and its allies for economic relations based on neo-liberal principles that facilitates the expansion of multinational corporations.

 Bolivia and Venezuela have signed a dozen accords entailing over 200 different projects concerning energy, mining, education, sports and cultural exchanges. Most importantly Venezuela has agreed to invest over $1 billion to help industrialize Bolivia’s natural gas production, including the construction of a petrochemical complex.  Venezuela will provide diesel fuel, required but not produced by Bolivia, in exchange for most of its soybeans production, guaranteeing to purchase produce if Bolivian goods were shut out of traditional markets not only for political reasons but as byproducts of bilateral South American FTAs with the US (Colombia’s Free Trade Agreement with the US will allow the entry of subsidized US grain pushing out some Bolivian produce).  

Another agreement between the two countries seeks to bolster Bolivia’s banking and monetary system vis-à-vis the international financial institutions and the United States Treasury.   In March, the Bolivian government announced it was not soliciting any more loans from the IMF—a broadly applauded move in Bolivia since the IMF is perceived as the force behind limited social spending and forced privatization of the state mining industries.   The nature of the new development assistance was evident at an Exchange Fair in May—an event contemplated in the Trilateral People’s Trade Treaty—where all three countries participate with the goal of sharing technical expertise and expanding commerce among them.  At the fair the vice-president of Bolivia, Alvaro García Linera, criticized the US neo-liberal trade regime, asserting: “It is not necessary for small producers and entrepreneurs to subordinate themselves to financial capital…There are other forms of interdependence, other forms of globalization, other ways to generate regional exchanges of products, ideas, and necessities.” García Linera concluded, “Bolivia needs the world, and it will produce for the world.”[26]  


Early in his presidency, Bill Clinton announced to a congregation of Latin American presidents that the age ideology was over and that of trade had begun.  This was obviously an ideological statement in its own right, because it was a reiteration of the ideology of trade and finance.  Finance for development was an afterthought, a dying phenomena if indeed private capital and corporations were to take charge of “development” abetted by national governments that provided “enabling” market friendly environments or good governance. 

The resurgence of economic nationalism in South America can not be denied, part and parcel of electoral victories articulated by social movements and broad democratic coalitions.  The US of course does not have a clue of how this came about—and it would be the last to admit that the truisms of 1947 Bretton Woods agreements, and their current embodiment in the Washington Consensus, failed to deliver what it promised.  Development is being rethought, as with it development assistance.  No one knows how sustainable the new intra-South American cooperation modalities will be—and no one should underestimate the residual power and will of the United States to reverse that course.  But the deceptions and the failed promises of the powerful governments stand exposed as the collectively and individually squander public resources in the name of the “war on terror” and turn a blind eye to human rights violations and mass poverty.   Hands should shudder upon receiving assistance from the development agencies of governments guilty of committing wars of aggression.  The policies cannot be separated from the politics and the power.  Development assistance can not be reconciled with ruthlessness and trampling of people’s rights.  Nor can it begin to compensate the price being paid by the poor and disadvantaged for the war on terror. 

But what the powerful governments think may in the long term be less important than the new radical democratic discourse that has taken root in so many parts of Latin America and elsewhere.  We witness a new wave of economic nationalism and rebellion against the US-dominated order.  In Latin America the neoliberal democratic order is being contested precisely with its very electoral “ropes” – a demand for full participation in the ownership and management of a nation’s resources.  Pursuits of freedom, national democracy and international solidarity become interdependent and inseparable political phenomena.  

[1] For the full text of the exchange between Focus and Oxfam, see Focus on Trade, Number 78, May 2002, (Bangkok, 2002) as well as Alejandro Bendaña, “NGOs and Social Movements: A North-South Divide,” to be published by the United Nations Research Institute for Social Development.

[2] “Stiglitz no fan of ‘unfair’ FTAs for developing nations”, The Jakarta Post, May 31, 2006. p. 2.

[3] Quoted by Regina Jere-Malanda, Is Poverty African?, New African, January, 2006, No. 447, p. 14.

[4] The poor and the near-poor struggle to stay afloat“, International Herald Tribune, May 11, 2006, p. 8

[5] “A Lesson from Tony Blair”. The Economist, May 13th, 2006.

[6] See the evidence presented by Ann Louise Cogan, Hazardous to Health: the World Bank and IMF in Africa

[7] See for example “Worldbankification of Norwegian Development Assistance: A Report by IGNIS and the Development Fund, (November, 2005).

[8] See Walden Bello, “The Rise of the Relief and Reconstruction Complex”, Journal of International Affairs, Spring/Summer, Vol. 59, No 2.  Also found in the Focus on the Global South website:

[9] Girish Mishar. “World Bank and Economic Growth”, June 1, 2006,  ZNet/Corporate Globalization.

[10] Ibid.. p. 18.

[11] "Enron is one of the great frauds in American business history," said James Post, a professor of management at Boston University. "But it is also a symbol of a particular era of management practice. The excesses of Enron point pretty clearly to what was going on in mainstream companies across the business landscape in the 1990's."   ….   That may go a long way toward explaining how corporate America became infused in the late 1990's by what appeared to be a near endless amount of greed and criminality, leading to scandal at an array of corporate giants, from Enron to WorldCom, from Adelphia to HealthSouth” Kurt Eichenfeld “ “Verdict on an Era: Arrogance and Recklessness at Enron”, News Analysis, The New York Times, May 26, 2006. 

[12] Joseph E. Stiglitz, “IMF must address global imbalances to keep its legitimacy intact”, The Jakarta Post, May 17, 2006, p. 7.

[13] DFID, Foreign and Commonwealth Office and HM Treasury (2005) quoted in “Worldbankification..”, p. 19.

[14] Ibid, p. 23

[15] “The World Bank the The PRSP: Flawed Thinking and Failing Experiences”, (November 16, 2001), AWEPON (Uganda), Centro de Estudios Internacionales (Nicaragua), Focus on the Global South (Bangkok) in

[16] 2003 Eurodad Annual Conference Report, Ideology and Evolving Acronyms, Progress or Doublespeak?,

[17]Abugre and Brutus quoted by Patrick Bond, “Wolfowitz’s ‘Anti-Corruption’ Hoax”, ZNet, March 6, 2006,

[18] Indonesia ended its loan agreement with the IMF in 2003 amdi increasing criticism from nationalist sectors of a number of “reform” policies tied to the loans that the government was required to adopt, including the cutting of subsidies and the privatization programme.  “Government to repay half of debt to IMF this Year,” The Jakarta Post, May 30, 2006.

[19] “The International Monetary Fund contemplates its future”, The Economist, April 22nd, 2006

[20] Walden Bello, “Critics Plan Offensive as IMF-World Bank Crisis Deepens”, 50 years is enough network, April 25, 2006.

[21] David Ellerman, “Can the World Bank be Fixed?”, Post-autistic Economic Review,  No 33, September, 2005,

[22] David Mosse, Cultivating Development, An Ethnography of Aid Policy and Practice, (Pluto and Ann Arbor, Michigan: 2005)

[23] Ibid., p. 227 quoted by Raymond Apthorpe’s book review of Mosse’s book in

[24] David Ellerman, Helping People Help Themselves: From the World Bank to an Alternative Philosophy of Development Assistance, (University of Michigan Press: 2006)

[25] “The IMF and the Recovery of Bolivia’s Economic Sovereignty”,, accessed May 1, 2006.

[26] Quoted by Roger Burback, “Bush Squares Off with Bolivia and Venezuela over Hemispheric Model”, Center for the Study of the Americas (CENSA), May 22, 2006.

Redaktør: Arnfinn Nygaard
Sist oppdatert: 12. januar
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