An Hai Le: Comparative Development in Global Context

This essay, written by An Hai Le for the Comparative Development course (MBAC-6107) at Cape Breton University, delves into the complexities of international development, particularly focusing on the Global South. The author examines various development indicators used by international organizations, such as the World Bank, to evaluate global progress. The essay explores the disparities between the Global North and South, and investigates different approaches to understanding underdevelopment, including the impact of foreign aid, corruption, and debt burdens. Drawing on the work of Dambisa Moyo, the essay critiques the effectiveness of aid and proposes alternative financing mechanisms like trade, foreign direct investment, and domestic savings. It also touches upon the role of South-South cooperation and the Chinese model of aid. The essay emphasizes the importance of market-based strategies and job creation for sustainable economic growth and criticizes the dependency and corruption that often accompany aid-based strategies, offering a comprehensive overview of the key issues and debates in comparative development.

An Hai Le
MBA, Cape Breton University
MBAC-6107-15: Comparative Development
Professor Michael McNamara
April 13, 2021
Word count: ________

One of the reasons why I choose to study the course Comparative Development is to understand
the meaning of sustainable community development within an international development
context, why there are poor countries and why they are in that situation.
The course examines a variety of global development issues that include discussion of North-
South disparities, shifting between the regional and national levels and the community level.
An emphasis is placed on the role and possibilities for projects to affect community development
in international settings.
The prospects and problems of international development and development projects are explored
systematically through the text as well as through case studies and additional issue-oriented
readings.

In the first several week of this course, we looked at various ‘development indicators’ used by
international aid organizations such as World Development Indicators (WDI) to ‘evaluate’
development in the world. WDI is the primary World Bank collection of development indicators,
compiled from officially recognized international sources. It presents the most current and
accurate global development data available, and includes national, regional and global estimates.
The World Development Indicators is a compilation of relevant, high-quality, and internationally
comparable statistics about global development and the fight against poverty.
The global highlights in this section draw on the six themes of World Development Indicators:
1. Poverty and shared prosperity, which presents indicators that measure progress toward the
World Bank Group’s twin goals of ending extreme poverty by 2030 and promoting shared
prosperity in every country.
2. People, which showcases indicators covering education, health, jobs, social protection, and
gender and provides a portrait of societal progress across the world.
3. Environment, which presents indicators on the use of natural resources, such as water and
energy, and various measures of environmental degradation, including pollution,
deforestation, and loss of habitat, all of which must be considered in shaping development
strategies.
4. Economy, which provides a window on the global economy through indicators that describe
the economic activity of the more than 200 countries and territories that produce, trade, and
consume the world’s output.
5. States and markets, which encompasses indicators on private investment and performance,
financial system development, quality and availability of infrastructure, and the role of the
public sector in nurturing investment and growth.
6. Global links, which presents indicators on the size and direction of the flows and links that
enable economies to grow, including measures of trade, remittances, equity, and debt, as well
as tourism and migration.
From the analysis of WDI reveals some ‘persistent’ underperformers (both as regions and
countries).
The Global South is a term often used to identify lower income countries on one side of the so-
called global North–South divide, the other side being the countries of the Global North.[1] As
such the term does not inherently refer to a geographical south; for example, most of the Global
South is actually within the Northern Hemisphere.[1]
The term, as used by governmental and development organizations, was first introduced as a
more open and value free alternative to "Third World"[2] and similar potentially "valuing" terms
like developing countries. Countries of the Global South have been described as
newly industrialized or in the process of industrializing and frequently have a history
of colonialism by Northern, often European states. The countries
of Brazil, China, India, Indonesia, and Mexico have the largest populations and economies

among Southern states.[3] The overwhelming majority of these countries are located in or near
the tropics.
Global South "emerged in part to aid countries in the southern hemisphere to work in
collaboration on political, economic, social, environmental, cultural, and technical issues."[15]
[16] This is called South–South cooperation (SSC), a "political and economical term that refers
to the long-term goal of pursuing world economic changes that mutually benefit countries in the
Global South and lead to greater solidarity among the disadvantaged in the world system."[15]
[16] The hope is that countries within the Global South will "assist each other in social, political,
and economical development, radically altering the world system to reflect their interests and not
just the interests of the Global North in the process."[15] It is guided by the principles of "respect
for national sovereignty, national ownership, independence, equality, non-conditionality, non-
interference in domestic affairs, and mutual benefit."[17][18] Countries using this model of
South–South cooperation see it as a "mutually beneficial relationship that spreads knowledge,
skills, expertise and resources to address their development challenges such as high population
pressure, poverty, hunger, disease, environmental deterioration, conflict and natural
disasters."[17][18] These countries also work together to deal with "cross border issues such as
environmental protection, HIV/AIDS,"[17][18] and the movement of capital and labor.[17][18]
From there, we explored various approaches and explanations (or causes) for “under-
development”.

Money from rich countries has trapped many African nations in a cycle of corruption,
slower economic growth and poverty. The insidious aid culture has left African countries
more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency
markets and more unattractive to higher-quality investment. It’s also increased the risk of
civil conflict and unrest. Indeed, the African countries that received the most aid –
Somalia, Liberia, and Zaire – have all slid into virtual anarchy.
Regarding the debate on aid to Africa, one of the most compelling arguments made by
Dambisa Moyo is that Jeffrey Sachs taught her at Harvard that “…the path to long-term
development would only be achieved through private sector involvement and free market
solutions” (Moyo 2011). From such foundation she argued, “there is no country –
anywhere in the world – that has meaningfully reduced poverty and spurred significant and
sustainable levels of economic growth by relying on aid” (Moyo 2011). She then pointed to
the corruption, dependency, inflation, debt burden, and disenfranchisement that typically
follow aid based strategies (Moyo 2011). Indeed, the political leadership in Africa (and
major portion of its public goods) was implanted by Western powers and does more to
cater to the demands of aid organizations than the needs of the wider population (Moyo
2011). Finally, after examining Sachs’ strongest examples of countries that have benefited
from aid, Moyo reiterated that these countries did so by adopting market based and job-
creating strategies – not relying on long-term aid (Moyo 2011). Therefore, the student
appeared to have fared better than the teacher by balancing her theoretical foundations with
real world applicability.
One of the most frequent criticisms of foreign aid is how it fuels rampant corruption in the
countries that receive it. Money that the UK government markets to the gullible electorate as
being destined to help the destitute in the third world actually ends up creating and supporting
inorganic, bloated and unnecessary bureaucracies in the form of both the recipient country
governments and the donor-funded NGOs. The net result of this is to make it all too easy for the
funds to be used for anything, save for what their developmental purpose should be, or what
products and services would otherwise be supplied in an open market.
The economic environment that created aid bureaucracies has therefore built
unproductive organisations that define their output as money disbursed rather than
service delivered, produce many low-return observable outputs like glossy reports and
“frameworks” that can be used to justify their spending and put enormous demands on
those with scarce administrative skills in poor countries who could otherwise be
engaged in doing something useful.
The significant debt burdens of less developed countries have often been incurred as a
result of the foreign aid packages pushed by wealthier countries and Western
institutions and pursued by corrupt and greedy politicians and businessmen in recipient
countries.
‘Foreign aid’ is quite a comprehensive and encompassing term. Most people don’t
realise that loans are usually embedded in aid packages, either directly or as a condition
of foreign aid donations being given in the first place. An overload of debt combined

with punishing interest rates creates the condition of economic subservience to the
creditor nations and institutions and ties down, in a perpetual manner, most of the Third
World Countries to underdevelopment, dependency and poverty.
Growing Dependence
The dependence on foreign aid means that it becomes the opiate of the Third World.
Local Farming & Business Bankruptcy
An example of this phenomenon is the US ‘Food for Peace’ program that was created in
1954 to help the Eisenhower administration get rid of embarrassingly large farm
surpluses.
Less Trade & Wealth Creation
Foreign aid creates poverty through economic institutions that systematically block the
incentives and opportunities of poor people to make things better for themselves, their
neighbours and their country.
a. How does aid undermine democracy, representation, and allow recipient
governments to “abdicate their responsibility for public goods”?
Anti-Democratic
As aid flows in, citizens of the recipient countries effectively become dis-enfranchised
as increasingly all their governments need to do to stay in power is to court and cater to
foreign donors.
Increased War
More than half of the international assistance spending related to Afghanistan, Iraq, and
Pakistan is for military or security uses.
White Elephants
Foreign aid represents money, or wealth, that has been seized by force from taxpayers
whether through taxation or increased government borrowing (with the taxpayer base
used as collateral) to finance the aid. When the aid is spent it therefore doesn’t represent
the careful and considered judgment of those who have legitimately earned money
through voluntary exchange.
As a result many aid programs are ill-conceived and economically unsound, tending to
support gaudy and extravagant projects, reckless spending and grandiose loss-making
state ‘enterprises’ that don’t benefit anyone in any meaningful way. Further, many of
the less developed world’s state enterprises, set up with foreign loans, were supposed to
earn or save these countries the foreign exchange needed to service or pay back the
loan, but instead, these enterprises racked up losses upon losses, and used up more
foreign exchange to compound the problem.

As an emerging scholar of ‘development’, show me that you understand some of the different
perspectives, approaches, and/or explanations for ‘development’ in the Global South.
In developing your answer, you will want to draw from at least 6 different concepts and/or
authors listed below.
1. What does she think we should be doing instead?

In Dead Aid, Moyo comes out with guns blazing against the aid industry—calling it not
just ineffective, but “malignant.” Despite more than $1 trillion in development aid given
to Africa in the past 50 years, she argues that aid has failed to deliver sustainable
economic growth and poverty reduction—and has actually made the continent worse off .
To remedy this, Moyo presents a road map for Africa to wean itself of aid over the next
five years and offers a menu of alternative means of financing development.
These new financing mechanisms should include increased trade (particularly among
African nations and with emerging markets like China, India, and Brazil), foreign direct
investment, entrance into international capital markets, and increased domestic savings
through remittances and microfinance. The end goal is to phase reliance on aid down to 5
percent or less within five years.
2. In the video, you’ll note she’s more of a fan of the ‘Chinese model’ of Aid- why?
Moyo pointed out that China has played a hugely significant role on the continent:
“We've had China come in, there's been significant investment…we're able to trade with
the Chinese, for better or for worse.”
According to Ms. Moyo, the main difference between the Chinese and American
approaches to Africa is that China has treated Africa as a trading partner, while the US
has approached Africa as a donor.