MIRS x Cainz debate: Is foreign aid an effective foreign policy tool?

October 9, 2021
Editor(s): Melanie Suriarachchi
Writer(s): Amy Soodi, Laurel Chen, Philip Phung

*The speakers in this article are competitive debaters, and therefore the views expressed may not necessarily represent their beliefs or the beliefs of the organisation they belong to.*

First Affirmative – Amy Soodi (Cainz)

Foreign aid, at its core, refers to money, food or other resources given from one country to another. In addition to the humanitarian goals of providing aid in times of need, foreign aid is a vital international policy tool to show a nations commitment to its values and to its global partners. To prove how important foreign aid is in our continually globalising economy, our team will show, with quantitative examples, how foreign aid has benefited nations in need, helping to develop welfare within the nation. Furthermore, we will explain why the diplomatic aspect of aid is not one to be frowned upon, but an idea to be embraced.

The first point to note is, while some foreign aid projects have failed, the vast majority of them have seen tremendous success. Looking at an American project, the Presidents Emergency Plan for AIDS Relief (PEPFAR), it has provided antiretroviral treatment for 11.5 million people and has been tagged as a core reason why global deaths from AIDS have fallen by almost 50%. Further programs aimed at Malaria, Tuberculosis, Polio and many others have also seen millions of lives saved as a direct result of these health programs. The tremendous life saving potential of these programs have clearly been a significant welfare boost to the nations helped and expose the importance of foreign aid in elevating living standards. Another goal of foreign aid is to alleviate poverty, and while these projects are often more complex, once again, the empirical evidence points to a clear positive correlation between the existence of foreign aid and a reduction in poverty.

Another concern that opponents of foreign aid may have is that it is used as a political tool to impose a nations interests on another. The affirmative team believes that this only adds to its importance and is often backed by research. A study into determinants of aid effectiveness found that among other factors, democracy significantly enhances the effectiveness of aid. Thus, is it unfair for democratic nations to prioritise foreign aid for nations that share these values, due to the higher chance of success for these programs? Furthermore, increased access to aid by adhering to internationally accepted norms should be an outcome that is celebrated, not mourned.

In conclusion, the affirmative team strongly believes that foreign aid is an extremely effective tool when considering the big picture, saving millions of lives, promoting poverty alleviation, and increasing adherence to internationally accepted norms.

First Negative – Mevuni Wanigasooriya (MIRS)

Foreign aid may be quite substantial and life altering to the receiving state. However, it comes at a cost. Our team will illustrate that while foreign aid does have a positive impact, it all comes at an ultimate cost of obeying elite state interests.

Your team noted that foreign aid projects have had tremendous success with regards to AIDS, Malaria, Tuberculosis and Polio. Yes, they did help to either reduce or eradicate these illnesses. However, it is vital to note, such attention and resources were allocated to such diseases as they posed a direct threat to elite states such as the US. Take for instance the global effort to eradicate smallpox by the World Health Organisation. Henderson (1987, p.536) denotes, when the elimination of smallpox was unanimously approved in 1959 60% of the world’s population lived in smallpox endemic areas. Smallpox hence, was a global problem shared by most states. Although the eradication of smallpox required a full collaborative international effort with the WHO, it was successful as it was a shared problem among majority nations. If it was endemic to one or a small collective of non-elite states, collaboration of states to such extent would not be visible.

You stated that democracy enhances the effectiveness of aid. What if democracy is the sole reason aid is required in the first place? As critical Marxist theory illustrates, democracy and international institutions such as the UN often act as a foreign aid agent to serve and reinforce disparate power relations (The Diplomat, 2019). They unevenly exercise force over weak states for the benefit of elite states causing them to become more dependent on super states. Take for instance China’s debt trap across many nations such as Sri Lanka. Through tremendous investments in the construction of Hambantota port, Sri Lanka has no avenue for repayment. As a result, the port, which holds specific military advantage, is now leased to China for 99 years. What may be viewed as a foreign investment tool on the outside, may in fact be a mechanism to enhance elite state interest as what this example portrayed.

In conclusion, we argue how foreign ‘aid’ can only be effective if it has a direct impact on elite states as in the case of smallpox. We also argue that it is in fact a mechanism by the elite states to further enhance their agendas to other nations, especially weaker states.

Second Affirmative – Laurel Chen (Cainz)

Although the self-interest of donor states may impact the distribution of foreign aid, it does not undermine the humanitarian nature of these policies. Instead, foreign aid that benefits donor states are more likely to be effective, with more efficient use of resources and better sustainability.

Without the incentive of self-interest, foreign aid motivated by altruism can result in a lack of effectiveness, as the focus is set on the virtue of donating instead of the impact of aid for recipient states. An example for this is Norway, a country that consistently offers more than one percent of its gross national income as foreign aid, and has the reputation of a ‘humanitarian superpower’. With a strong emphasis on its generosity, the measurement of foreign aid results was neglected, and programme staff reported that ‘there is a pressure to shift money and spend resources’ in order to maintain the country’s image. On the other hand, when their self-interest are involved, countries are incentivised to monitor and evaluate the effect of foreign aids, as the benefits received are directly associated with the effectiveness of programmes. This results in more efficient use of resources, and the impact of polices are better documented, providing opportunities for future improvement in policy effectiveness.

Having foreign policies aligned with the donors’ self-interest can also make foreign aid programmes more sustainable in the long run. In July 2021, the UK government decided to set out a cut of £4bn in foreign aid budget, reducing it from 0.7% to 0.5% of gross national income. One of the reasons for this is the ministers’ belief that voters prefer a shift of focus back to the country’s national priorities during the global pandemic. This shows that foreign aid policies are partly driven by voter preferences, which humanitarian aid is often seen as less important compared to policies targeting issues within the country. Incorporating the self-interest of donor states in foreign aid polices encourages support from the public, which in turn ensures that programmes assisting recipient states are more likely to be sustained without the threat of electoral pressure. 

Overall, the fact that countries offer foreign aid with the consideration of their self-interest not only enhances the quality of these policies by ensuring a more efficient distribution of resources and allows for improvements, but also establishes the sustainability for long term foreign aid projects.

Second Negative – Anushka Singh (MIRS)

The affirmative conveniently states that the self-interest of donor states does not undermine the humanitarian nature of their foreign aid policies. For this, they choose to give the example of Norway and Britain, claiming that a self-interest and result-centric foreign aid policy proves to be beneficial. The opposition shall firstly dismantle both these claims one-by-one, and proceed to give examples to prove that indeed, the contrary is true.

Firstly, from the same Norwegian study, the affirmative has conveniently chosen to omit the observation that suggests that a stronger emphasis on outcomes just relocates assistance to where it can be assessed most effectively rather than where it has the most capacity and potential to do good. Additionally, the argument relating to Britain’s changing voter preferences and reduction in foreign aid is redundant because perpetuating a self-interest in foreign aid will never be possible for states. Using a constructivist approach, one can argue that since national identities and interests are constantly subject to change. Thus, having a static self-interests that continually favour foreign aid will never be a reality for states. Thus, in presenting these examples, the affirmative has essentially made an argument in favour of the opposition.

Let’s continue with the example of UK for the sake of continuity. The United Kingdom has been a significant contributor to the humanitarian assistance to Yemen. As of 2020/21, the UK delivered £800 million in aid to Yemen. Now the affirmative might want to argue that in doing so, the UK aims to repair its international image that continues to be tarnished by its continued weapons trade with Saudi Arabia. However, such analysis shall be incomplete, and in effect, incorrect. Even though the humanitarian assistance to Yemen from UK is significant, its efficacy is reduced due to continued impact of the Saudi coalition on the lives of civilians in Yemen, which is indirectly linked to the British arms trade with them. Britain’s self-interest driven arms trade with Saudi Arabia has enabled profits of over £6.2bn for them since the conflict started in 2015, which is significantly more than the assistance provided to Yemen. In this case, the self-interest driven humanitarian aid is nothing more than ‘saving face’.

Thus, the causal relation between self-interest and foreign aid remains a negative one. Any resultant ‘relief’ is more coincidental, or even instrument for justification of state actions, rather than intentional.

Third Affirmative – Philip Phung (Cainz)

Throughout the debate the affirmative team has shown that foreign aid is an important and effective policy tool in many senses: it can reduce the burden upon nations struggling to resolve emergency scenarios such as deadly diseases and wars, as displayed by the 50% reduction in AIDS globally, as well Western aid to Japan after the Second World War. For the donors, foreign aid may be employed as a political tool to exert and add their influence within the target country’s region. This in particular, as we stated, is a positive consequence of foreign aid for the donor country.

The affirmative team would like to reiterate that the debate topic “is foreign aid an effective policy tool”. It is then clear the foreign aid is intrinsically a political tool at its core. The first negative speaker suggests that the “debt trap” in Sri Lanka was caused by China through the guise of “foreign investment” in an attempt by an “elite state” to essentially coerce them to rely on this super power economically. Firstly, it is important to know that Sri Lanka themselves first approached two other large powers, the United States and India, both of whom declined taking on the project. Assuming that this is even a ‘debt trap’, the rejection by these two large economies implies that this argument fails to hold in this scenario. Along with this, experts consider China to be not the main source of large amounts of debt here – it is in fact, the Sri Lankan government. With that being said, China had offered a loan to a country that came out of a civil war at reasonable rates, supporting our argument that foreign aid is an effective policy tool through the reduction of burden upon nations.

Whilst that the argument that there can never be a “static self-interest” in favouring foreign aid policies from the general public is true to a certain extent, it is just that. We acknowledged that public attitudes towards foreign aid is always “changing”, but regardless of the way the public views change, foreign policy will still be viewed as valuable, owing to the ever-changing and dynamic “self-interest[s]” the nation has. It is also imperative to understand that all nations place themselves above all other nations when it comes to any sort of aid or assistance – the survival of the nation is paramount. Through this, we understand that nations will attempt to deliver foreign aid to other nations that is beneficial to both nations, hence removing electoral pressure and allowing foreign aid to flow sustainably to the recipient nations.

In conclusion, the affirmative team has demonstrated that foreign aid is an efficient and beneficial foreign policy for all parties involved. It can be used to assist global and worldwide issues as well as localised issues in certain nations.

Third Negative – Akash Anil Nair (MIRS)

The affirmative team has attempted first to paint foreign aid as a tool for positive foreign policy and failed in doing so once the gaping holes and evident self-interest of nations such as the UK and China were effectively brought up by our team. This simply shows how foreign aid is used as a coercive tool to further hegemony and militaristic position in the anarchic world system.

The affirmative team then attempts to argue that foreign aid is an effective foreign policy tool regardless of its interests and stake as long as it can be seen as a form of expanding influence, coercion or not.

The opposition disagrees with the notion that as long as foreign aid exists and benefits some party in a self-contrived manner, it is effective. As we see it, the effectiveness of ‘foreign aid’ only goes so far as to line the pockets of military contractors and capitalist industries. This is demonstrated by the UK’s actions with Yemen and Saudi Arabia as iterated by my teammate previously. Playing the game on both sides of a never-ending conflict leads solely to gain in financial capital of the ‘aiding’ nation in question here, i.e. the UK loses money in Yemen to make money in Saudi Arabia. The opposition may still claim this action to be an effective foreign policy tool for the UK considering they profit in more than one way, but one would be hard-pressed to call this anything less than capitalist exploitation and certainly not aid. A similar argument can be made regarding Sri Lanka, as the argument laying the blame on the Sri Lankan government approaching other nations first or even being wholly responsible for their own debt does not take away from the fact that China exploited a nation in a poor financial position for their own gain. Calling that foreign aid calls into question the whole ethical dilemma of foreign aid as a tool of foreign policy as stated by Tomohisa Hattori (2001; 2003), since coercive actions cannot be categorised as aid.

Therefore, looking at trends seen throughout this debate, we may say one thing for certain, foreign aid is not an effective foreign policy tool. Rather, the false guise of foreign aid is an effective tool for capitalist gain and coercion of smaller nations, thereby only resulting in greater harm for the world.

The CAINZ Digest is published by CAINZ, a student society affiliated with the Faculty of Business at the University of Melbourne. Opinions published are not necessarily those of the publishers, printers or editors. CAINZ and the University of Melbourne do not accept any responsibility for the accuracy of information contained in the publication.

Meet our authors:

Melanie Suriarachchi
Amy Soodi

I'm a Bachelor of Commerce student in my final year majoring in Finance and Management. My key interests are in public policy, regulation and inequality. As a writer at Cainz, I hope to produce pertinent pieces of work that will help people think critically about the pressing issues of our time.

Laurel Chen
Philip Phung