Foreign aid is destroying our society

Bharat Jhunjhunwala
New Indian Express, 23 Jun 2010

The British government has ordered an inquiry into leakages from Sarva Siksha Abhiyan which financially is supported by it. This has been triggered by a report of our Comptroller and Auditor General that Rs 10 lakhs were spent under the project for the purchase of four luxury beds. Rs 90 lakhs were transferred to an unknown bank account. About 7,500 colour TV sets were purchased for schools that did not even have an electricity connection. Similar corruption is being reported from the Employment Guarantee Scheme. Worse, this type of foreign aid also changes the direction of our own government expenditure.

In an earlier World Development Report, the World Bank elaborated many ways in which aid was having a negative impact on recipient countries. Aid influences the nature of domestic spending. The donor may give aid for only capital expenses and expect the recipient to incur running expenditure from its own budget. A donor may make a huge hospital for AIDS, which is high its own agenda, and that may lead to the poor country spending towards the recurring expenditure on AIDS prevention. The recipient country then spends less on the prevention of tuberculosis or malnutrition which is more important and spends more on AIDS prevention.

Aid may be given for projects in which the recipient is not interested. Some villages in Rajasthan dug up their well-functioning tanks and spoiled them under government-led famine relief works because they would get famine relief only if they undertook earth works like digging tanks. (మరింత…)