The efficiency of aid versus trade and economic growth is not a new debate, and it will not be solved any time soon. The panel had diverging takes of the issue and could not agree on whether trade was more beneficial than aid.
- Trade not aid? Why not both? says Mattias Goldmann, Fores. He is one of two panellists who see the benefits in a combination of trade and aid in developing counties. He welcomes a new era of development assistance, where NGOs and organisations kick start processes of development in countries that are poor, not middle-income. It is also important to know when it is time to leave and let the country integrate with the global economic structure. Companies and businesses naturally have a need to succeed and can therefore be more effective in producing results – this is not the case with aid. And while he still sees aid as a necessity in some cases, he is critical to how NGOs and actors within aid have a tendency to talk the talk and not walk the walk.
- Ask locals in developing countries how they view aid workers. A majority will describe them as white men in big white SUVs. Also, aid polices demand businesses in developing countries to be climate smart; but ask any NGO what their internal climate guidelines are - they won’t have any!
Linnea Engström, EU Parliamentarian for the Swedish Greens agrees with Goldmann, but she is not convinced that businesses are interested in investing in the poor – especially women, who make up for roughly 66% of the worlds poorest. Additionally, while there is tremendous growth in developing countries, the gap between rich and poor is greater than ever. Engström doubts that trade can solve that problem. Aid and polices for development are needed to establish global guidelines. The interest of companies naturally lies with profit, and this will not always translate to the best poverty reduction.
On the other side of the debate we see a different picture. Fredrik Segerfeldt is a tough critic of aid and starts off by declaring that no country in history has escaped poverty without integrating into the global economy. He argues that several studies claim that aid does not work, and may in the end do more harm than good to recipient countries. Studies have for example shown correlations between aid and conflict in developing countries. When Engström brings up the importance of gender in poverty reduction, Segerfeldt is quick to say that while gender is an important issue, it is not pivotal for development. Economic growth is.
Anna Hagemann Rise, Froosh, agrees with this standpoint, but has a different perspective. After working within the UN system she claims great frustration and disappointment with the infectivity and hypocrisy of the aid sector. She states that while she has never seen aid work, she has seen trade work. She describes how areas where businesses are centred suddenly become equipped with electricity, internet and schools pop up – a huge amount of external effects comes about – simply because businesses can assure fixed costs for work. This is not, and probably won’t be, the case with aid.
Unsurprisingly, the seminar does not solve the issue of trade versus aid. Instead, it further problematize the different standpoints and gives food for thought.
.@LinneaEngstrom "there are not many companies willing to invest in poor women affected by climate change" #utvpol http://t.co/wY4tGVYt2X — Biståndsdebatten.se (@Bistandsdebatt) July 2, 2015
Is increasing trade the best way for developing economies to improve their real economic welfare, and enable a sustainable increase in economic welfare? Is foreign aid helpful or does it create a damaging culture of dependency? Are all developing countries in a position to benefit from free trade?
Alexander Crawford, Moderator. Fredrik Segerfeldt, Liberal debattör. Anna Hagemann Rise, PA-chef, Froosh. Linnea Engström, EU-parlamentariker, Miljöpartiet. Mattias Goldmann, VD, Fores.
Plats: Hästgatan 4, Visby
Datum: 2 juli, 2015
Tid: 11:00 - 12:00