Need For Foreign Aid Reform Reflected In Haiti’s Plight
Haiti: Much Promised, But Little Delivered
In the aftermath of 2010 earthquake in Haiti, billions of dollars of aid were pledged, but according to reports from the Centre for Global Development, a Washington think-tank,”many aid pledges were unfulfilled,” reports The Economist.
While the nation was flooded with nongovernmental organizations (NGOs) in the immediate months, many have since left leaving behind a nation plagued with unemployment and poverty. But Haiti’s problems are not solely due to a lack of aid, but also by the limits of foreign aid, which is most evident in the inability of the island nation to attract outside investment.
The main problem, according to the magazine, is the fear among many investors from Haiti’s “social instability and lack of clarity over land rights.” This results in a chicken and egg dilemma as “Haiti needs investment to generate social stability and economic growth, it also needs social stability and better infrastructure to attract investment.”
World Bank Anti-Poverty Funds Directed To Wealthy Hoteliers
Foreign Policy magazine has a striking investigation of how money intended to combat poverty is being used to fill the pockets of wealthy hotel owners.
The World Bank through the International Finance Corporation (IFC) gave “a Saudi prince’s company an attractively priced $26 million loan to help build” a hotel. Why? According to reporter Cheryl Strauss Einhorn, the “answer is that the IFC’s portfolio of billions of dollars in loans and investments is not in fact primarily targeted at helping the impoverished. At least as important is the goal of making a profit for the World Bank.”
The IFC has been criticized for the way it spends its money, but, it would seem, the lesson has not been heeded.
Meeting The Need For Reform
Haiti’s quandary reflects a fundamental flaw in how foreign aid is designed and disbursed. Its failure to fulfill its promise often is due not to a lack of funds, but a lack of capacity, asserts the Coalition of International Decelopment Companies (CIDC).
The effort to reform how foreign aid is appropriated is being taken up this year by the CDIC, which has released suggestions “with the goal of helping ensure that the transformative power of development assistance and the unique role USAID plays in the world are always clear.”
In Other Development News
Obama Moves To Fill Spots On Global Development Council President Obama has selected Mohamed El-Erian, the chief executive officer of Pacific Investment Management Co., to head the Global Development Council, which was established by executive order in September 2010.
Managed by the U.S. Agency for International Development, the Council’s goal is to provide advice on global development policies, and to increase awareness and action in support of development. Obama is also looking to appoint French Economist Esther Duflo to the Council.