1. REVERSED
DEVELOPMENT AID
Francine Mestrum, Brussels, 15 March 2012

2. Rio+20
 The challenge of RIO+20
 Save the planet and save humanity
 Environmental justice is a matter of equity
 Reconcile social justice with environmental justice
 A matter of sharing
 All resources

3. Sharing in the 21th century:
 At national level: taxes and social protection
(social security, social assistance, public
services)
 At global level: development aid for poverty
reduction
 Both fail

4. Reversed development aid
 ODA in 2010: 128,7 billion US$ - highest level
ever and + 6,5 % in comparison to 2009,
though only 0,32 % of GDP (OECD)
 ODA non-DAC countries estimated at about 15
billion US$ (OECD)

5. Reversed Development Aid
 Foreign Debt SSA:
 Net transfers 2005: 5 billion US$ (Boyce &
Ndikumana)
 Foreign debt 2007: 130 billion US$ - SSA money
on foreign bank accounts: 230 billion US$
(CADTM)
 Foreign debt all non-oil exporting countries
1980: 370 billion US$
2008: 3360 billion US$
Debt servicing 1980-2007: 7150 billion US$
(CADTM)

6. Reversed development aid
 Illicit Capital flows:
 For all developing countries 2000-2009: 775 to
993 billion US$/year (GFI)
 Average for past 3 years: > 1trillion US$/year
 44,9 % from Asia; 18,6 % from MENA
 For the 48 LDC’s 1990-2008:
 From 9,7 billion US$ in 1990 to 26,3 billion US$ in
2008

7. Reversed development aid
 Illicit Capital flows:
 Forevery $ received in aid, flows out of the
country in an illicit way:
 16,7 $ in Eq. Guinea
 5,6 $ in Angola
 2,9 $ in Chad
 1,4 $ in Bangladesh
 (GFI)

8. Reversed development aid
 Illicit capital flows:
 Trade mispricing
 Role of tax havens

9. Reversed development aid
 International trade
 Trade liberalisation has cost Africa the past 20
years 272 US$ (Christian Aid) through tariff losses

10. Reversed development aid
 Royalties, repatriation of profits and monetary
reserves:
 Non transparant contracts in mining – very low return
for developing countries
 Difference between investments and repatriation of
profits 1995-2003 (SOMO) :
 RDC: 1,150 billion US$
 Nigeria: 1,603 billion US$
 Botswana: 4,678 billion US$
 Dollar reserves of developing countries (without
China) 2010: 4900 billion US$ - interest loss 300
billion US$ (Eurodad)

11. Reversed development aid
 Ecological debt
 Historical debt
 Social debt
 …
 More money goes from S to N than from N to
S
 = a good reason to re-think aid and
international relations

12. Poverty reduction policies
 Two main strategies:
 WB/IMF:PRSPs
 UN: MDGs
 Both strategies are failing
 Newest statistics from WB : the number of
extremely poor people in SSA has risen with
65 % from 1990 to 2008.

13. Sharing resources
 Monetary and non monetary, including natural
resources:
 Re-think ‘development aid’ and switch to
‘solidarity’
 Abandon the priority of ‘poverty reduction’ and
stop the impoverishment processes : social
protection
 Re-think and broaden the concept of social
protection in order to include new dimensions –
social + environmental justice
 Re-think ‘development’: national policy space and
a new economic paradigm
 Re-think sovereignty

14. The Common Good of
Humankind
 Proposal for a new political, economic and
cultural paradigm
 Has to integrate social protection
 Social protection had to integrate climate
change
 Global social justice:
www.globalsocialjustice.eu

15. Reversed development aid