In this article I am referring to multilateral-to-government and bilateral or government-to-government development assistance. I have spoken and written that when development assistance is given, received and used strictly for development purposes it produces tangible outcomes that improve human quality and accelerate growth and development.
For example, assistance that was given to Uganda between October 1962 when the country became independent and December 1970 before Obote’s regime was overthrown in a military coup in January 1971 was put to good use in institutional and infrastructural capacity development.
Unlike in the past when health services were concentrated in towns, under Obote I regime, quality hospitals, clinics and staff houses were concentrated in rural areas. Doctors, nurses and midwives were trained, paid well and retained in Uganda. Because there was no need for moonlighting and corruption to make ends meet, patients received good services. Private health services were subsidized to reduce charges. Primary health care received a boost in immunization, safe drinking water, sanitation, general hygiene, housing and food and nutrition security.
In the area of education, quality schools and teachers houses on school premises were constructed again mostly in rural areas, teachers were trained, well paid and sufficient instructional materials provided.
The World Bank recorded that between 1963 and 1970 that the country’s health service had developed one of Africa’s best. Uganda pioneered many low-cost health and nutrition programs. There was a highly organized network of vaccination centers and immunization program reached 70 percent of the population.
Although school enrolment was still low, Uganda’s education system had developed a reputation for very high quality. And Uganda’s economy grew at an average rate of 6 percent per annum. Relative price stability was also maintained (World Bank 1993). According to the UPC (Uganda Peoples Congress), Monifesto (1980), Uganda’s economy grew at an average rate of 7.8 percent per annum between 1965 and 1970, the highest in East Africa. And the New Africa magazine of 1987-88 reported that Uganda had one of the richest economies in tropical Africa and a relatively well developed industrial sector before Amin came to power in 1971.
This is what you get when development assistance is used for the intended purposes.
But this has not been the case always because assistance is given for different purposes disguised as development aid. It has been increased, reduced or withdrawn altogether as and when necessary.
Initially Amin who overthrew the government of Obote in 1971 became the darling of the West especially when he de-nationalized foreign owned businesses. With his government becoming unpopular among Ugandans, Amin took drastic steps to restore his popularity including the expulsion of Asians mostly of British origin and re-nationalized many European-owned businesses. In retaliation Britain cancelled a credit of 24 million British pound sterling or about $58 million since most of the nationalized companies were British owned (Erwin M. Rosenfeld & Harriet Geller 1993).
During the second Obote regime from 1981 to 1985, relations with development partners were not as rosy as during the 1960s. By the 1980s, aid had been associated with stiff conditionality and issues related to human rights – very subjective matters. In 1981, Uganda government agreed to $ 197 million standby facility and came under IMF tutelage with some conditions including balanced budget.
With the economy in bad shape and the guerrilla war gaining ground, the government ran into problems with the IMF over an increase in public spending. A new facility with the IMF was therefore not renegotiated. On the other hand the World Bank withdrew funding because it was convinced by the opponents of Obote’s government that excessive human rights violation had occurred (G. W. Kanyeihamba 2002).
Some commentators have argued that these punishments by the IMF and the World Bank were taken for political reasons because the West continued to believe that Obote was at heart still a socialist (Vijay Gupta 1983). Obote’s government was overthrown by the national army in 1985.
Victoria Brittain (1990) has reported that the second Obote government was overthrown because Western powers were interested in a pliable government come to power in Uganda because of its strategic location in relation to Kenya and DRC.
There have also been cases of carrots or bribes for compliance with donors’ interests. Because of the anti-communist stand taken by Mobutu Sese Seko of Zaire he received massive aid which was wasted until 1990 when the Cold War came to an end.
In the second half of the 1990s, the government of Uganda under Museveni urgently needed more than $100 million to fund the president’s promise in primary education. The representative of the World Bank agreed to speed up clearance of the funds provided the government agreed “… to parachute one of the Bank representative’s smart technocrats into the ministry of education… By June 1998, the Bank came up with $155 million for education…” (Sebastian Mallaby 2004).
Mozambique was enticed or forced to lower tariffs on processed cashew nuts from 20 to 14 percent to receive assistance under HIPC (Highly Indebted Poor Country) arrangements (Elin Enge 2001).
The few illustrations have demonstrated that international aid can indeed work and transform developing countries economies and societies but it can also be used as bribe or punishment and fail to meet the desired development goals.