Tuesday, January 04, 2005

"Sustainable" aid giving - a higher form of "sustainable" development

I have to admit I was getting rather worried. Here we are in the middle of the largest hot-air-fest for … well, for a long time anyway, and not a squeak out of the Commissars in Brussels. Well, I can relax now. They have appeared on the scene and have been pronouncing with predictable banality. Curiously enough, while their statements have not been particularly informative, they have all tended in one direction: more European integration is needed. Well, what do you know?

My colleague has already written about Benita Ferrero-Waldner’s comments about the need for those European rapid reaction forces and how useful they will be when they are all ready to go into action in 2007. Not to those whose livelihoods have been destroyed by the tsunami in 2004 they will not be useful. Besides, where is the need? Various national teams have gone in very effectively. Is anybody standing around wailing for EU Rapid Reaction Forces to come and rescue them? I think not.

Louis Michel, the Commissar for Development and Humanitarian Aid has also announced his presence. He is going to have a very exciting time. Not only is there going to be a donors’ conference in Europe, called by the EU but he is also going with President Barroso and Luxembourg Prime Minister Juncker to the big conference in Djakarta on January 6. M Michel has already gone round the stricken areas (his predecessor was always visiting areas where there had been natural and man-made disasters) to see what has happened for himself. And he will have a meeting of the relevant EU ministers this Friday. Life is very full for M Louis Michel.

Of course, one could argue that instead of all this travelling round, conferencing and, no doubt, eating and drinking, the relevant ministers should either stay out and leave the whole matter to the professionals (US navy and helicopter pilots, Australian navy, Japanese pilots, Indian drivers, Chinese pilots etc, as well as engineers, builders, construction workers local and western) or, if they must stick their noses in, have virtual conferences on the phone and by video. The money saved in that way could be used to buy, if not a helicopter, then certainly a couple of fork-lift trucks and half a dozen pontoon bridges.

Don’t bother M Louis Michel with reality. He has announced that the EU is determined that the aid giving will be sustainable. Presumably, this is a higher form of sustainable development, in itself a hard to define concept.
"There must be no gap between the initial emergency aid phase and the rehabilitation and reconstruction phase that will follow."
Ideas for a “comprehensive strategy” will be presented on Friday to be discussed by the ministers. Ten to one that “comprehensive strategy” will not mention the need for the relevant countries to acquire an accountable, transparent political system and a free economic one. Recent comments and comparisons about the way natural disasters affect rich and poor countries would not have made much of a dent in M Michel’s understanding of the situation.

Meanwhile the Commission has committed €23 million ($31 million £16 million) in aid, without explaining precisely what the money is committed to and how it will be administered.

Aan interesting article in yesterday's New York Times pointed out that, shattering though the tsunami has been to the coastal areas, its effect on the overall economy of the countries that have suffered will be small.
“Even as it has destroyed the livelihoods of millions of families in South Asia, the tsunami will shave only a few points off the region's economic growth this year. Depending on the importance of tourism in each country, the decrease is expected to range from less than 1 percent for Thailand to 2 percent for Sri Lanka and 4 percent for the Maldives, according to estimates by Standard Chartered Bank.”
Aceh in Indonesia accounts for only two per cent of the economy and even there it is not clear how much of the agricultural land has been destroyed.
“Tourism and fishing together make up less than 6 percent of Sri Lanka's gross domestic product.

Thailand's economy is expected to grow about 6 percent in 2005, about the same as in 2004. Tourism in southern Thailand around Phuket, the only part of the country affected, accounts for about 1.3 percent of the national economy.

Already, much of the Phuket tourism has been rerouted to other Thai resort towns, and the damaged beach towns could well see a construction boom as up to $2 billion is expected to be invested to rebuild beachfront hotels, homes and shops.”
The best way to revive tourism in those parts that live off it, will be for westerners to go on booking those trips. The best way to encourage the economy in all those countries to develop in a balanced fashion is to buy and sell, set up free-trading agreements and invest.

The worst possible way to deal with the situation would be to set up a scheme of indefinite aid giving, that will sidetrack funds, impose unnecessary obligations and turn the countries into perpetual beggars. Which is precisely what the EU Commissar for Development and Humanitarian Aid is advocating.

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