Wednesday, October 15, 2008

The New Colonialists

Only a motley group of aid agencies, international charities, and philanthropists stands between some of the world’s most dysfunctional states and collapse. But for all the good these organisations do, their largesse often erodes governments’ ability to stand up on their own. The result: a vicious cycle of dependence and too many voices calling the shots
Even on their best days, the world’s failed states are difficult to mistake for anything but tragic examples of countries gone wrong. A few routinely make the headlines – Somalia, Iraq, Congo. But alongside their brand of extreme state dysfunction exists an entirely separate, easily missed class of states teetering on the edge. In dozens of countries, corrupt or feeble governments are proving themselves dangerously incapable of carrying out the most basic responsibilities of statehood. These countries – nations such as Botswana, Cambodia, Georgia, and Kenya – might appear to be recovering, even thriving, developing countries, but like their failed-state cousins, they are increasingly unable and perhaps unwilling, to fulfill the functions that have long defined what it means to be a state.

What – or who – is keeping these countries from falling into the abyss? Not so long ago, former colonial masters and superpower patrons propped them up. Today, however, the thin line that separates weak states from truly failed ones is manned by a hodgepodge of international charities, aid agencies, philanthropists, and foreign advisors. This armada of nonstate actors has become a powerful global force, replacing traditional donors’ and governments’ influence in poverty-stricken, war-torn world capitals. And as a measure of that influence, they are increasingly taking over key state functions, providing for the health, welfare, and safety of citizens. These private actors have become the “new colonialists” of the 21st century. In much the same way European empires once dictated policies across their colonial holdings, the new colonialists – among them international development groups such as Oxfam, humanitarian non-governmental organisations (NGOs) like Doctors Without Borders, faith-based organisations such as Mercy Corps, and mega philanthropies like the Bill & Melinda Gates Foundation – direct development strategies and craft government policies for their hosts. But though the new colonialists are the glue holding society together in many weak states, their presence often deepens the dependency of these states on outsiders. They unquestionably fill vital roles, providing lifesaving healthcare, educating children, and distributing food in countries where the government can’t or won’t. But, as a consequence, many of these states are failing to develop the skills necessary to run their countries effectively, while others fall back on a global safety net to escape their own accountability. Have the new colonialists gone too far in attempting to manage responsibilities that should be those of governments alone? And given the dependency they have nurtured, can the world afford to let them one day walk away?

A shift of money and power

Dependency is not a new phenomenon in the world’s most destitute places. But as wealthy governments have lost their appetite for the development game, the new colonialists have filled the breach. In the year 1970, seven of every 10 dollars given by the United States to the developing world came from official development assistance (ODA). Today, ODA is a mere 15% of such flows, with the other 85% coming from private capital flows, remittances, and NGO contributions. Nor is this trend strictly an American phenomenon. In the year 2006, total aid to the developing world from countries of the Organisation for Economic Co-operation and Development (OECD) amounted to $325 billion. Just a third of that sum came from governments.

The expanding budgets of humanitarian NGOs are indicative of the power shift taking place. During the 1990s, the amount of aid flowing through NGOs in Africa, rather than governments, more than tripled. Spending by the international relief and development organisation CARE has jumped 65% since 1999, to $607 million last year. Save the Children’s budget has tripled since 1998; Doctors Without Borders’ budget has doubled since 2001; & Mercy Corps’ expenditures have risen nearly 700% in a decade.

The shift is equally apparent on the receiving end. When aid reaches developing countries, it increasingly bypasses the host governments altogether, often going straight into the coffers of the new colonialists on the ground. In 2003, the USAID Office of US Foreign Disaster Assistance distributed two thirds of its budget through NGOs rather than affected governments. Between 1980 and 2003, the amount of aid from OECD countries channeled through NGOs grew from $47 million to more than $4 billion. One reason for the shift is the growing reluctance of rich countries to route aid through corrupt foreign officials. That definitely has created an increasing reliance on new colonialists to deliver assistance and produce the desired results.

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Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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