I. Background on the IssueI. Background on the Issue

A. Main elements of the problem & history of the Issue.

Foreign aid has grown significantly in absolute terms (if not as a percentage of GDP in the case of many developed countries) but this has shown a paradox – as aid to Africa has grown, the continent has actually become poorer rather than better off. This is often contrasted with Asia. Immediately after the Second World War, Africa and Asia were both Third World areas. Yet Asia – largely without the sort of foreign aid directed at Africa – has developed a strong economic infrastructure and become a developed area.

Background ContinuedBackground Continued

This raises the question of what foreign aid achieves and whether on balance it is a positive or negative influence. The debate has been crystallised by the focus on the Millennium Development Goals on increasing aid from the developed world to the poorest countries, and by the failure of the Doha round of World Trade Organisation talks to agree a new global trading system that might have benefited many developing economies

1. Parties Involved:All the nations in the world with few exceptions.

1. Parties Involved:All the nations in the world with few exceptions.

IMF-the International Monetary Fund WTO-The World Trade Organization The World Bank OECD-Organization for Economic Co-

operation & Development

http://earthtrends.wri.org/features/view_feature.php?theme=5&fid=60

Foreign Aid for TradeForeign Aid for Trade

"Aid is not sustainable. What is sustainable is trade and therefore we have the slogan 'aid for trade,'" he says. "We

need to be channeling aid towards infrastructural development and towards encouraging intra-African trade...

and creating an investment-friendly climate in Africa."

Real WorldReal World

This is what Zambian President Levy Mwanawasa has to say in an opinion piece entitled, Infrastructure Development Is the Basis of All Growth :

What Works?What Works?

I commend those governments who encourage their companies to increase investment in Africa. This is important because it is investment and not aid that will bring about sustainable growth and development in our economies. This is not to say that aid is not important, as it does help bring about the requisite conditions for growth.

2.The Crux of the Matter or the Origin of the Problem2.The Crux of the Matter or the Origin of the Problem

President Mwanawasa comments encompass the debate concerning the Trade for Aid debate.

The question is “How does aid help countries without hurting them at the same time?” “What is the best way to help developing nations develop sustainable economic infrastructures. Should the developed world focus on enabling trade or donating aid as a way to help the developing world?

Definitions What is trade – what is aide?Definitions What is trade – what is aide?

Trade is a long-term basis for international co-operation. The other partner in a trading relationship is likely to represent an ongoing market for goods or services. So when a developing country has the capacity to engage in trade with another country, there is a strong likelihood that that trade will blossom into an ongoing trading partnership. This will allow a firm basis for a flow of cash or goods into the developing country, largely independently of whether the developed country is doing well or badly economically at a given moment. This can be contrasted to the flow of aid.

AidAid Aide is linked to need not the ability to engage in trade. Trade rewards

those who are able and willing to engage in trade. This involves a number of elements – as well as having the rights sorts and quantity of goods and services and being willing to sell at the desired price, a country may need to meet certain other criteria of a purchasing country. For example, that country may make demands in terms of corruption, human rights, political support at the United Nations, or any other of a large number of possible preconditions for a trading partnership. This will suit some countries in the developing world. But for others it will act as a bar to trade. They will therefore not receive the redistribution of wealth that is claimed for the global trading web. In this way, trade can distribute its benefits very unevenly

Pros & Cons of Trade v AidePros & Cons of Trade v Aide

Trade allows developing countries to retain their dignity. Aid is often seen as quite a patronizing concept,

Not all countries are able to trade successfully. Some countries lack the ability to trade, for example because they do not have the raw resources or materials in quantities that make their exports viable.

Pros V ConsPros V Cons

Trade is often cited as one of the reasons why African countries are reluctant to take a full part in international affairs – partly because they feel that their silence or support has been “bought” with aid money.

The basic assumption of the international trade argument – that trade is open equally to all countries – does not reflect the reality of the situation.

Pros v ConsPros v Cons One of the problems of the current

aid system is said to be that it creates an impression amongst receiving countries and their people that the west is a wealthy, free-handed donor which provides what seem like huge sums of money by local standards. The impression can also be that this is given without too much concern about corruption or indeed without moral judgement, since many of the people who administer aid may be seen as morally ambiguous collaborators within authoritarian regimes.

Aid allows for money in a given country to be allocated well against need. At the micro- level as well as the macro, trade is an inefficient distributor of resources in a developing country. Under it, most if not all of the benefit of the trade will stay with a small elite of people who are often amongst the richest in the country in the first place. They may then move the money offshore again. Alternatively, if it remains within the developing country, it may well simply be used to buttress their own position in a way which further entrenches their social and economic position. So, the benefits of trade flow to few people and often they are the least needy.

Pros v ConsPros v Cons Trade provides developing countries

with an important basis for their own improvement. To gear up to be successful trading partners, developing countries often need to go through a number of key changes. As well as developing their own economy and their manufacturing or service sectors, they may need to build trade infrastructure in other ways.

The opportunities for trade are severely limited because of barriers imposed by the international system. The arguments made by pro-trade proponents are often couched in the rhetoric of market economics. Yet the international trade arena represents anything but a free market. Instead, tariffs, taxes, subsidies, regulations and other restrictions operate to disadvantage some countries. Because of their weaker bargaining and economic power, it is typically developing not developed countries that are on the losing end of this equation.

Pros v ConsPros v Cons People naturally want to trade

with each other, seeking to turn their particular resources or skills to their advantage. All too often trade is limited not because government action is needed, but because the government actually gets in the way with restrictive rules and statist controls. For example, regardless of their terms of trade with developed nations, developing countries could all become more prosperous if they removed the barriers they have erected to trade with each other.

Trade does not exist in a vacuum. It needs a wider infrastructure to support it, e.g. roads, railways, ports, education to produce capable civil servants to administer trading rules, etc. Without foreign aid, developing countries are not able to develop this kind of support, and so cannot participate effectively in international trade. Aid is not always in the form of money - it may also be given through expert advisors who help countries prepare for the challenges of globalisation.

B. Actions Previously TakenB. Actions Previously Taken

September 2000, building upon a decade of major United Nations conferences and summits, world leaders came together at United Nations Headquarters in New York to adopt the United Nations Millennium Declaration, committing their nations to a new global partnership to reduce extreme poverty and setting out a series of time-bound targets - with a deadline of 2015 - that have become known as the Millennium Development Goals.

10 Goals10 Goals

1. End poverty and hunger2. Universal education3. Gender equality4. Child Health5. Maternal health6. Combat AIDS/HIV7. Environmental sustainability8. Global Partnership

Has the MDG WorkedHas the MDG Worked

Whatever the philosophical shortcomings of the Millennium Development Goals (MDGs), they do create a disciplined framework within which the global aid industry can be assessed. Pressure on the international donor community to focus on shared objectives related predominantly to poverty reduction has been particularly important for the World Bank and other multilateral institutions which have been criticised for their obsession with impersonal economic indicators at the expense of human development.

A/Res/63/178A/Res/63/178

26. Calls for the implementation of a desirable pace of meaningful trade liberalization, including in areas under negotiation in the World Trade Organization; implementation of commitments on implementation-related issues and concerns; review of special and differential treatment provisions, with a view to strengthening them and making them more precise, effective and operational; avoidance of new forms of protectionism; and capacity-building and technical assistance for developing countries as important issues in making progress towards the effective implementation of the right to development;

RES contRES cont

27. Recognizes the important link between the international economic,

commercial and financial spheres and the realization of the right to development, stresses, in this regard, the need for good governance and broadening the base of decision-making at the international level on issues of development concern and theneed to fill organizational gaps, as well as to strengthen the United Nations system and other multilateral institutions, and also stresses the need to broaden and strengthen the participation of developing countries and countries with economies in transition in international economic decision-making and norm-setting;

How to Find A ResolutionHow to Find A Resolution

http://www.un.org/ga/63/resolutions.shtml

C. Current Events Surrounding the IssueC. Current Events Surrounding the Issue

http://www.oecd.org/document/12/0,3343,en_2649_37413_43236748_1_1_1_1,00.html

Your Country’s Position on the IssueYour Country’s Position on the Issue

http://www.oecd.org/countrieslist/0,3351,en_33873108_33844430_1_1_1_1_1,00.html

SolutionsSolutions

1. Insist that U.S. corporations maintain foreign business practices that don't jeopardize workers, damage their environment or interfere with their government, and a wage adequate for living. 

2. Negotiate a General Agreement on Tariff and Trade (GATT) that promotes the economic development and self-sufficiency of recipient countries, rather than profitability for the G-8 countries.

SolutionsSolutions

3. Reevaluate our government's aid practices (USAID, for example) by emphasizing appropriate-level technologies, ecologically sustainable infrastructures and business projects, cultural sensitivity, and monetary aid consistent with countries' real needs. 

4. Encourage U.S. cities to develop municipal foreign trade policies centering around local trade agreements, "sister city" arrangements, and cultural exchange programs. 

SolutionsSolutions 5. Support and endorse United Nations (U.N.) conventions.

We believe that the U.N. should be used for its intended purpose: it should act as an impartial, democratic, multilateral body to maintain world order. This will require some fundamental changes in the U.N. Charter, starting with the elimination of Veto Power for any member of the Security Council. The U.N. should have a U.N. Civilian Police Corps, and an independent source of financing that is not easily blocked by the whims of one or two national governments.

The U.S. should help the U.N by paying its dues on time, abiding by all U.N.   resolutions, and helping U.N. forces to maintain peace and enforce its resolutions.      

SolutionsSolutions

   The U.S should not provide aid to any country not abiding by all U.N. resolutions nor should it take military action without the approval of the U.N.  An ideal U.N. should require that all nations be represented by an approved democratically selected representative or elected directly.     

  At the same time, an effective U.N. requires participation by all the  world's nations, including those governed by military dictatorships, plutocracies, theocracies, or various forms of democracy.

SolutionsSolutions 6.  Close all foreign military bases as soon as possible and clean

up any toxic wastes left behind. Fair and responsible business practices would eliminate the need for such bases. 

7.  Military foreign aid should be discontinued. Any monetary foreign aid distributions should be provided as cash payments to foreign governments, or reliable non-government agencies. Recipient countries should have more authority in deciding how the money is spent, rather than simply using it to purchase U.S. domestic goods. All foreign aid should be based on the improvement of democracy and general living standards and/or to reduce overall suffering in the recipient country. 

Suggestion for a SolutionSuggestion for a Solution

8.      We support use of the International Criminal Court (I.C.C.) as better than war in solving problems   in international relations. The I.C.C. provides an opportunity for fair and open trial of individuals accused of crimes against humanity. The I.C.C. includes most of the provisions of the U.S. Bill of   Rights.  Persons suspected of being terrorists should be tried as individuals in the  I.C.C.   , and if guilty,   they should be punished as individuals. No country should invade, occupy, bomb, or kill the people of another country because some international criminals reside or are located in that country. The U.S. Senate should ratify the I.C.C. treaty. 

Reference ListReference List

O’Neill, C. (n.d.). Foreign policy plank revision. Retrieved from: http://tian.greens.org/GreenParty/GPCADec0

4Ventura/ForeignPolicyPlank.html. Organization for Economic and Co-operative

Development [Data base]. Retrieved from: http://www.oecd.org/countrieslist/0,3351,en_

33873108_33844430_1_1_1_1_1,00.html

Reference ListReference List

One World Net (2009). Aid guide. [Data base]. Retrieved from:

http://uk.oneworld.net/guides/aid United Nations [Data base] Retrieved

from: http://www.un.org/en/