Who should give and how much? The case of the East African Famine crisis

The East African famine crisis is worsening and the Food and Agricultural Organisation (FAO) calling for action and more financial contributions . The usual donors have responded, albeit weakly, especially due to the US “debt ceiling” debacle, the US downgrading of its credit rating, the US own debt crisis and the Eurozone debt crisis.

One of the leading donors is, without guess the United Kingdom, which is the only (and I think so) OECD donor and G8 nation to hold its aid budget (see page 22) (at 0.56% of GDP/GNI) while other donors see aid primary target for cuts.DFID has provided much to the famine crisis since it broke–see for example this, this, this and this (I know all are DFID news releases and biased but I’m rushing this entry).

All of this is nice and good but this is against the recent survey by The Chatham House where the people placed development assistance as the least important part of the UK’s foreign policy and see it as quote-unquote, “wasted and does little or nothing to promote British interests; it should be radically reduced”. Specifically, 57% (see various sections of the detailed report) of those Britons polled believe so. While the UK is facing a high debt of £ 1105.8 billion (in December 2010) and running a tremendous deficit and a high borrowing from outside debtors. Andrew Mitchell has called the UK a “Development Superpower“. Well it is a “superpower” forged by the will of the parliament and the government, not the views of an increasing disillusioned electorate. In an IPE view, this goes against the secondary argument made by Milner (2006) that the electorate wishes to see aid used for development humanitarian means and that for the government it is always for security interests.

That’s a debate for another time. What have other countries added to the FAO’s call? Skipping away from the usual OECD and non-OECD big donors, I highlight two contrasting examples. Mexico has provided/pledged US$ 1 million in assistance to the crisis ((English translation). In sharp contrast, the Small Island Developing State (SIDS) (not city-state) country of Singapore pledged only US$ 50,000. It is of simple knowledge that Singapore is a high growth country that while classified as “developing”, is “developed” and surpasses many OECD members in terms of living standards and GDP. Mexico in contrast is still a very much low-income developing country. Data from the World Bank Group shows that Mexico’s GNI per capita at current US$ is US$ 9330 in 2010 while Singapore’s is US$ 40920.

The discussion is naturally a political and or political economy one. Should rich countries, especially those not facing a debt crisis or deficit provide more than those who are developing status? Why do some donors still contribute substantial amounts when their own economic situation (and Mexico has regions of high poverty according to my colleague Iván) is terrible? Shouldn’t there be a more equal sharing on the burden, even though some countries are not constant donors or OECD-DAC members (not all members of the FAO and other UN agencies involved are members of the OECD).

I’ll leave the debate as such for now (I may come back to this entry to improve it or follow-up with another).

PS: In no way did I imply I was unhappy with the actual amounts Mexico or Singapore (or the UK) gave. I’m quite glad that countries have answered the call of the FAO.

Milner, H.V., 2006, “Why Multilateralism? Foreign aid and domestic principal-agent problems” in Hawkins, D.G. et al (eds.) Delegation and Agency in International Organizations, Cambridge: Cambridge University Press, pp.77-106