Culture Guides

Mini-guide by Suzie Capelli

(G2G = ‘Government to Government)

Knowing that trade is not politically feasible, richer governments help developing governments in a variety of ways. By far the largest in terms of cold, hard cash is government to government aid. For example the Government of Rwanda is 60% aid funded. This means that in any one year the Government can only raise 40% of what it wishes to spend from domestic taxes and exports. The shortfall must be made up by the donors.

Of course “he who pays the piper calls the tune” and projects will only receive funding if they are among the priorities of the donor government. And remember, my experience is limited to Rwanda which has little or no natural resources. In places like Congo or Nigeria, the scope for donor government’s self interested action is enormous.

Many donors still operate by tying their aid quite severely: “Yes, we will fund your road but only if you use a contractor from our country to build it”.

Of course the developing countries can play games of their own. As a recent outbreak of polio in West Africa proved – if you want to save money for less benign expenditures, (like the military for instance) let your healthcare go to hell and the international community will always step in to fix such crises.

In many places, most of the government to government aid does not trickle down to the neediest; large portions end up in the pockets of high ranking officials or, more usually eaten up by the army of international consultants and managers often attached to such projects.

Donors have recognised that making large donations has little impact without good governance in a country, which includes transparency and accountability. Most G2G aid these days comes on the condition of taking steps to improve governance and public finance management. But this runs the risk of looking like the donor governments are imposing their management ideas on a foreign government!

Governments in developing countries may also act erratically or instigate policies which are unacceptable to donor governments (or their electorate). In this case it becomes a question of whether helping a developing country is morally acceptable.

The alternative is to pull G2G aid, meaning that in a country like Rwanda, the government would be unable to pay its bills. This would eventually lead to dissatisfaction with the government, resulting instability, which could imply wars and/or food shortages -in which case we are back in a situation where large amounts of humanitarian aid are needed and we’re back to square one. (see a necessary evil
).

So in practise, although despotic acts may be known to be occurring in countries, governments/regimes usually need to get quite bad over a sustained period in order for aid to be pulled.

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