Browsing articles in "Foreign Aid"
Jul 2, 2012
Center for Democracy and Civil Society

When Conditional Aid Produces Reform: A Look at Malawi

New Malawi President Joyce Banda

Reform, itself a rather nebulous concept, is sometimes difficult to define in the context of political behavior. It begs the questions, “Reform in what area, for whom, and to what social, political, or economic end?” Many African countries for years, under pressure from international donors, have adopted policy rhetoric infused with promises of western-style “reform” in all the areas one might expect: democratic pluralism, economic liberalization, anti-corruption, institutional development, constitutional protections for human rights, and so on.

Actual progress beyond rhetoric has been slow. But not always for lack of effort from major donors and other international actors. Conditions are often placed on large aid packages that flow to governments in developing countries. The logic is that these conditional packages can be used as both a positive and negative incentive, prompting governments to embark on recommended changes in policy, while also deterring them from more destructive and parochial uses of power due to the explicit threat of losing international funds — which often account for large portions of a developing country’s budget. Predictably, many of these governments — run by powerful elites who may stand to lose under a system of vibrant pluralism and broadly distributed economic growth — nod politely and give credence to the value of reform, but do little else to codify or fundamentally institutionalize real change.

A possible exception may be Malawi. New President Joyce Banda, southern Africa’s first female head of state who rose to power last April after the sudden death of former President Bingu wa Mutharika, has used her brief three months in office to shake up Malawian politics. Some of her actions have been largely symbolic – selling a controversial private jet purchased by her predecessor only two years earlier, to name one example — but others have been more substantive. For better or for worse, she is initiating an austerity campaign throughout the country, headlined by a 40 percent devaluation of the Malawian Kwacha that has since created a minor spike in inflation. But Ms. Banda appears willing to accept the immediate domestic consequences of this campaign in the hope that it will create a more solid economic foundation for growth and also repair relations with donors that were nearly severed in recent years.

Yet Ms. Banda’s surprising behavior isn’t confined to economic policy. In a dramatic break with both her Malawian predecessor and the leadership of the Africa Union, she refused to grant Sudanese President Omar al-Bashir entrance into Malawi for the July AU Summit her government was hosting, on account of his outstanding arrest warrant issued by the International Criminal Court for alleged war crimes in Sudan. Withstanding tremendous pressure from the AU, Sudan, and other countries in the region, Ms. Banda eventually refused to host the summit with Mr. Bashir in attendance, forcing organizers to move the entire event to Ethiopia.

It was quite a remarkable stance for a small country, particularly in a region of much larger countries that have repeatedly avoided or sought to obfuscate their obligations to the ICC, and to human rights more generally. Ms. Banda is likely to incur significant consequences for her uncompromising position, primarily in the form of political or economic alienation by the AU when it negotiates new policies to govern regional trade and commerce.

What is equally clear, however, is that international donors are taking notice of Ms. Banda’s streak of independent and, by their view, necessary political behavior. The Millenium Challenge Corporation (MCC) recently released a $350 million package it had suspended in 2011 after accusing Malawi’s previous president of malfeasance and poor governance. The MCC’s initial freeze was also in response to Sudanese President Bashir’s attendance at a conference in Malawi’s capitol, Lilongwe, last fall. In another significant event, Ms. Banda’s administration released a reconfigured annual budget proposal that built upon the direction set by their previous currency devaluation, prompting the International Monetary Fund to sign off on a $157 million aid agreement.

Movement toward reform, in the areas of human rights and economic policy, can indeed be seen in the recent behavior of Malawi’s government. And the carrot provided by large aid packages, compounded, of course, by Malawi’s own desperate need for economic growth, appears to be the primary motivator behind these changes.

I wrote last week that we should not wait for, nor expect, enlightened leaders to bring altruism into systems otherwise dominated by corruption, identity politics, and the narrow interests of elites. Though Ms. Banda appears determined to challenge this notion, far be it from me to declare her behavior as anything close to altruistic. Time will tell how effective her policies will be, as well as the degree to which she can generate a broader political movement in favor of her approach. But it does seem clear that she, more than her predecessor and many other African leaders, is displaying the courage and foresight to make tough, painful choices at the possible expense of her own domestic favorability. Austerity is likely to hurt many Malawians in the short-run, and her face-off with the more powerful AU may enrage many Malawi politicians who see little political gain in return for possible alienation. Further still, there is no guarantee that international aid will propel Malawi’s economy forward in a sustainable way, since much of its impact will depend upon the incentives of existing institutions and political actors.

Yet years from now, assuming Ms. Banda continues on her current path, Malawi may be an interesting case study to assess the ultimate impact of a leader that goes against powerful regional forces, as well as institutionalized interests, to enact reforms and collect the corresponding aid that those reforms release.

 

Other
Jun 27, 2012
Center for Democracy and Civil Society

Egyptian Uncertainty Breeds Opportunity

The litany of commentary and analysis surrounding the recent, and remarkable, events in Egypt has produced a consensus of sorts, if one might call it that. Though hardly a revolutionary conclusion, many believe the election of Muslim Brotherhood candidate Mohamed Morsi carries with it a mixed bag of consequences for the region, and the West. That Egypt’s Supreme Council of Armed Forces (SCAF) allowed Mr. Morsi to win despite his deep Islamist roots is certainly a positive sign for electoral integrity and the ability to translate popular will into political reality. Alternatively, the Brotherhood now controls the highest elected office in the country, and it remains to be seen whether the Islamist group will seek to use this platform to compensate — in the form of state policy, diplomatic relations, or constitutional reform — for decades of political marginalization amid the rather secular and repressive tenure of President Hosni Mubarak.

For its part, the White House appears to be cautiously optimistic following the results of the first free and fair presidential election in Egyptian history — relieved that the SCAF did not attempt naked electoral theft, but still quite wary of ongoing challenges and concerns. This seems a reasonable stance considering the list of unanswered questions. Will the SCAF reinstate the popularly elected parliament that it suddenly dissolved earlier this month? If not, when will new elections be held, and will all parties, including those of Islamist persuasions, once again be allowed to freely contest the poll? Now that a president has been elected, will he have commander-in-chief authority over the armed forces? If not, how much latitude will Mr. Morsi be granted by the military to enact his, and the Brotherhood’s, political agenda?

These will not be answered to anyone’s satisfaction for quite some time, I imagine. But as in any transition, Egypt’s uncertainty has created new and exciting windows of opportunity. Just today, Mr. Morsi announced his intention to use the vacant vice president positions to appoint two members of marginalized communities: a woman and a Coptic Christian. This will likely be interpreted as an olive branch to the nearly 50 percent of Egyptian voters that did not want a Muslim Brotherhood presidency, many of whom were heavily involved in the initial demonstrations that sought to topple Mubarak in favor of a more open, just, and progressive form of government. Symbolically, and assuming Mr. Morsi follows through on his promise, this was a necessary demonstration of inclusivity and Egyptian unity. But perhaps more significantly, it signals to the SCAF that Mr. Morsi is not the hard-line Islamist some have made him out to be, and in fact is willing to assemble a balanced government that receives input from a variety of groups. The hope is clearly to mollify fears among the military brass that Mr. Morsi’s election was a harbinger of the inevitable and destructive clash between an ideologically driven Islamist government and the old guard that wants to maintain stability, as well as the corresponding power that comes with it.

For years, many have wondered how the Brotherhood would actually behave should it find itself with political influence, much less outright power. While some fear for the freedom and civil liberties within Egyptian society, I’m inclined to believe that governing and its responsibilities will be a moderating force on the Brotherhood, compelling it to chart a more pragmatic course in order to negotiate constructive agreements with the many powerful, non-Islamist actors that have a stake in Egypt’s future. After all, Egyptian voters will be carefully observing the conduct and success of this new government in addressing Egypt’s most pressing challenges. A stalemated government, ineffectual leadership, and divisive agendas during a time of crisis will all be judged harshly at the ballot box — perhaps incentivizing productive, expedited action at the expense of pure ideology. On the international front, the annual U.S. military and economic aid package to Egypt remains one of the largest such bilateral agreements in the world. The Brotherhood would risk this relationship at its own peril, since the Egyptian military relies upon this aid for a considerable chunk of its own budget and operations.

With all that in mind, Mr. Morsi’s intention to appoint a woman and a Christian vice president is a positive, if incomplete, sign that perhaps he understands the factors above and will govern with sober moderation. Whether or not the SCAF believes this, or is willing to loosen its tight hold on power, of course remains to be seen. As does the Islamists’ actual legislative agenda should it once again find itself with a majority in parliament, if and when it’s reconvened.

Jun 6, 2012
Center for Democracy and Civil Society

To be continued

Hollywood must definitely make a movie out of this. The trial of the Egyptians, Americans and other foreign democracy-promoters charged with (basically) stirring the revolution in Egypt restarted this week and got postponed again, now to next month. Six of the accused Americans left the country months ago, easing the tension and the media attention to the story. But the trial continues, and so does the complicated relationship between US and Egyptian diplomats over democracy related programs in Cairo and elsewhere.

Obviously, the accused deny the charges, but it is hard to convince Egyptian authorities that the programs led by NDI, IRI and Freedom House had no political bias or agenda. Promoting democracy in what was then an authocracy is a political matter. Most programs worked with all parties, but according to recent news, some did make distinctions and even refused to work with the Muslim Brotherhood. I’m not sure that, in what pertains to this case, it is a good thing that the MB now happens to be in charge.

How unbiased can this programs be? Is it a matter of yes or no or is there a scale? And, deep down, is complete neutrality desirable when there is a clear objective of more openness?

The US now asks Egypt “to stop trying these individuals and instead resolve any outstanding issues that they may have on this matter in a government-to-government basis,” said State Department spokesman Mark Toner. According to him, the NGOs provided an “important component to a successful democratic transition for Egypt.”

I definitely agree that unresolved matters should be dealt with in a government-to-government basis. Still, development and democracy programs have here a great opportunity to analyze their work under the eyes of the countries that operate in.

 

 

Jun 3, 2012
Center for Democracy and Civil Society

Old challenges, new answers?

Maputo, Mozambique

For anyone interested in development, it is impossible to avoid the study of post-conflict African countries, which too often reflect in text-book ways the struggle to combine growth with improved living standards. Mozambique is a good example of that, and two recent pieces of news portray the challenge beautifully.

The first came from the Africa Development Bank, which said in its latest Economic Outlook for the continent that the country is expected to grow by 7.5% this year and 7.9% in 2013. In 2011, the rate was 7.2%.

The second was about preparations for general strikes and riots against the rising costs of living in the country, particularly those of public transportation and food. Though the threats failed to materialize, they prompted increased policing and even made the State Department spread travel alerts about possible disruptions in the streets of Maputo, the capital. The memories of September 2010, when similar threats led to protests that ended in deaths and destruction, are still fresh, but have not prevented costs to continue to rise, punishing severely the 54.7% of Mozambicans that live below the national poverty line.

In spite of its privileged growth rates in the past decade, Mozambique, commonly mentioned as a success story, has been unable to tackle poverty. It has an unemployment rate of 27% and the fourth worse UN Human Development indicators in the world, better only than the DRC, Burundi and Niger. And the growth has not relieved the dependency on aid money: in 2011, donations were still responsible for 45% of the Mozambican budget.

It is a common plague of poor countries. Foreign investment can be part of the solution, but so far it has not helped that much for common Mozambicans. The country has huge infrastructure projects in place, but they continue to be foreign owned and utilize mostly foreign labor, including in construction. Local labor is kept at bay for lack of specialization.

The government has some initiatives in place to try to fight these trends. It is implementing capacitation projects and requiring some international companies to list shares at local stock markets. In fact, revisions on the current legislation could ask companies to reserve between 5 and 20 percent of their local companies for placements on the Mozambican bourse. Vale, a Brazilian mining giant, has allegedly been asked to reserve 10% of its local venture on the Mozambican stock exchange to “widen participation in a coal mining boom”.

Mozambique was one of the top five african countries in terms of growth in 2011, but as the African Development Bank has put it, “the main short term challenge is reconciling ambitious infrastructure investment with social safety nets”. That in itself is interesting – would the IMF put the need for social improvement in the same terms? And, regardless, will the current initiatives result in better conditions of living for at least part of the population?

In any way, there is still much hope. Mozambique is experiencing booms in many areas, not only in mining, and if wealth is ever to be shared, growth must continue to be high. The problem is how to decrease inequality. Isn’t that exactly what development experts attempt to do all the time? So, like I said before… for those in the development field, there is no escape to the study of post-conflict African countries.

Ps. I will be writing a lot more about Mozambique in the coming months, as I am heading to the country for some summer research projects. Stay tuned.

Apr 29, 2012
Center for Democracy and Civil Society

Let’s All Feign Surprise Over Democracy Promotion

If you stick around you’ll see that it’s going to be Friedman-palooza here on D&S today, a concept which would normally nauseate me. But the NYT’s mustachioed bloviator-in-chief did touch on some excellent topics this week, namely the elephant in the room among foreign democracy promoters concerning Egypt.

“When the U.S. decides to just give away the military aid to Egypt without considering the consequences on us,” Okail told me, “it sends a message that the West and the U.S. don’t care about democracy and human rights. They just care about strategic stability. We, the defendants, felt betrayed. The battle we fight standing in that cage, hearing calls for our execution, is not a battle for our freedom but a battle for liberating Egyptian civil society.”

Okail referred to here is Dr. Nancy Okail, director of Freedom House’s Egypt office. Okail, an Egyptian citizen, is imprisoned by the SCAF and facing trial long after the military council freed the Americans it charged with stirring unrest. Suffering the inexplicable ramifications of an objectively good deed–building civil society, strengthening the party system, and just giving Egypt a hand transitioning into a well-functioning and fair democracy–Okail and her compatriots are rightly shaken.

But pay attention to the seeming betrayal that Okail is feeling now. Why is this, partially for someone working directly with a group like Freedom House but especially for an American like Friedman who observes them, such a hard and abrupt landing? It has long been painfully obvious that the U.S. only does promote democracy in locales and contexts where it strengthens, as she puts it, American “strategic stability.”

Consider Freedom House’s Freedom in the World report. By critically evaluating each country’s political freedoms and civil liberties, it makes a extremely unbiased judgement of both U.S. allies and nemesis. In the 2011 report, Saudi Arabia received a much-deserved 6.5 “Freedom Rating” (out of 7–I’ll let you guess which way the scale points) as well as rebukes on the country’s widespread corruption, government control of academia and press, unlawful detentions, treatment of women, and torture. Freedom House takes out all the stops, using words that U.S. government figureheads would never say in any Middle East speech.

But where does Freedom House operate? Not Saudi Arabia. Take a look at their office locations, all in relatively tame but strategic places around the world. Cameroon, for instance, a sought-after AFRICOM center in the natural resources hub of the Gulf of Guinea. Kyrgyzstan, home to U.S. air fleets and a peg in the complex Central Asian counterterror operation. Mexico, whose strategic stability as an American neighbor goes without saying.

We are much, much better off with groups like Freedom House than we are without them. Indeed, it is unreasonable to expect the U.S. to operate democracy promotion efforts everywhere, and Freedom House has excellently chosen locales where their programming has been effective and, until Egypt, more or less well-received. As a student of democracy promotion myself, I support this. I honestly do. But I always, even subconsciously, remember the inherent linkages between government-supported NGO activity and strategic interests. That’s just the way it is.

I suppose I get Friedman’s approach to encouraging Americans to keep a critical eye on U.S. foreign policy. He causes cognitive dissonance by setting up a simple example, like Okail in her prison cell, and compares it to our ideals, like the U.S. helping everyone get a fighting chance at democracy. And, sure, most  NYT readers probably aren’t international democracy buffs. But there is so much more to the story than, like he says, “stand[ing] up firmly for our own values.” And it’s a shame that although he says the mouthpiece to say it, he doesn’t.

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Founded in 2004, Democracy and Society is a biannual print journal published by the Center for Democracy and Civil Society at Georgetown University. The D&S Blog provides web-only content, including special reports and investigative series, on issues relating to democracy and development.

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