A UN report released this week called on industrialized nations to double their foreign aid budgets in order to meet the UN's Millennium Development Goals (MDGs) designed to lift 500 million people out of poverty by 2015.
Headed by Columbia University economist, professor Jeffrey D. Sachs, the report predicts that the MDGs are achievable only if developed nations increase foreign aid budgets from one-quarter of one per cent to one-half of one per cent of GDP. The previous commitment by wealthy nations to allocate 0.7 percent of GDP to aid has been met by only a handful of countries. The US places at the back of the pack at 0.15 per cent.
Sachs recommends focusing on at least a dozen poor but well-governed nations - including Ghana, Senegal, Ethiopia, Uganda, Tanzania and Mozambique - as a kick-start for the plan. He specifically focuses on some "quick win" policies such as eliminating school fees and providing free mosquito nets in areas where malaria is endemic, along with more far-reaching investment projects in infrastructure, health, agricultural productivity and education.
Critics of the report argue that while its intention is admirable, the plan is nothing more than a band aid solution that ignores the need for deeper political and social change in the developing world. They observe that simply infusing cash into developing economies is not always money well spent, particularly in an environment where corruption and mismanagement disrupt real development. Yet a growing body of economic literature, including a recent report by the Center for Global Development in Washington, suggests that the potential for aid to boost growth is significant, even in countries lacking infrastructure and sound economic policies. Supporters of the UN report argue that if aid is directed to carefully chosen projects in countries that are likely to use it well, the potential for positive results increases significantly.
Professor Dani Rodrik of Harvard University warns that cynical criticism may be dangerously close to recommending doing nothing at all. "[The UN report] has the potential to making a difference in a number of countries that take this opportunity and put it to good use," he said. "One has to ask the question: If not this, what else?"
» The New York Times: U.N. proposes doubling of aid to cut poverty
» The Washington Post: Fighting global poverty
» The Economist Global Agenda: Whatever it takes
» UN Millenium Project: Overview of "A Practical Plan to Achieve the Millennium Development Goals"
The Dominion is a monthly paper published by an incipient network of independent journalists in Canada. It aims to provide accurate, critical coverage that is accountable to its readers and the subjects it tackles. Taking its name from Canada's official status as both a colony and a colonial force, the Dominion examines politics, culture and daily life with a view to understanding the exercise of power.