Tuesday, 2 March 2010

Sarah Ferguson's Bad Accounting

Now, according to the natural order instituted by divine providence, material goods are provided for the satisfaction of human needs. Therefore the division and appropriation of property, which proceeds from human law, must not hinder the satisfaction of man's necessity from such goods. Equally, whatever a man has in superabundance is owed, of natural right, to the poor for their sustenance. So Ambrosius says, and it is also to be found in the Decretum Gratiani: "The bread which you withhold belongs to the hungry; the clothing you shut away, to the naked; and the money you bury in the earth is the redemption and freedom of the penniless." (Thomas Aquinas, Summa Theologica, II-II, Question 66, Article 7)

I heard Senator Sarah Ferguson on BBC Radio Jersey this morning; she was justifying the low level of foreign aid given by Jersey in comparison with its GDP by saying that one should take into account all the charitable giving that goes to foreign aid, such as the recent Concert for Haiti, Side by Side for Maderia, Christian Aid etc.

This is a kind of thinking that I am sure will be happily latched upon by any country that is providing less aid than the United Nations Target, especially as only 5 countries have so far managed this!

Although the world's 22 rich countries were mandated by the General Assembly to provide 0.7 percent of their gross national product (GNP) as ODA to developing nations, only five countries have met this target, according to a new U.N. report on FfD. Three of them, Luxemburg, Norway and Sweden, have also pledged to reach the 1.0 percent target by 2005-2006. The other two, Denmark and the Netherlands, have not. (1)

With the Ferguson proposals in place, all of these countries, who also have fund raising activities and private donors, can count that all in as part of their GNP, and manage to reach their targets without having to spend a penny. That, of course, is the outcome; it is an excuse to avoid considering that governments, as well as individuals, have responsibilies. As Peter Singer pointed out, in 1972, " if governments decide to reduce expenditure, they regard foreign aid as one of the expendable items, ahead of, for instance, defense or public construction projects"(2).

It is well known that Jersey is facing a "black hole" ahead, and I suspect Senator Ferguson's statements are not unrelated to that.

She is not, however, the only one trying to make out that more aid is being given than is the case. Writing in "The Tablet", Denis Claivaz notes that the IMF is also doing this:

Many people may not know that the International Monetary Fund's £74 million "highly concessional" and "interest-free" emergency assistance for Haiti is actually a loan. Full repayment will be due after a five and a half year "grace period". Interest will accrue from 2011. Surely history has taught us that Haiti does not need more loans. Haiti needs unconditional grant aid. Given the role of the international community in that country's miserable history, there is a moral obligation to ensure that Haiti's debts are immediately and unconditionally forgiven. Christine Lagarde, the French Minister of Finance, was among the first to encourage world leaders and money institutions to cancel Haiti's debt. Significantly, this is from a minister whose country had illicitly and immorally collected a huge amount of money from Haiti for the privilege of her simply being recognised as a sovereign state. The international community must both help Haiti to recover from the earthquake and empower its people to build their country anew.(3)

So how is foreign aid measured?

According to the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD), foreign aid (or Official Development Assistance) is the transfer abroad of public resources on concessional terms (with at least a 25 percent grant element), a significant objective of which is to bring about an improvement in economic, political, or social conditions in developing countries.(1)

This foreign aid represents the moral obligation of the richer nations to help the poorer ones. There is an obligation for all the citizens of a prosperous nation to help those suffering, regardless of geographical boundaries. Voluntary giving is simply not enough, and where it is given, it is a bonus.

Karl Popper, in his "Open Society and Its Enemies" writes that :"human suffering makes a direct moral appeal, namely, the appeal for help, while there is no similar call to increase the happiness of a man who is doing well anyway...Instead of the greatest happiness for the greatest number, one should demand, more modestly, the least amount of avoidable suffering for all; and further, that unavoidable suffering - such as hunger in times of unavoidable shortage of food - should be distributed as equally as possible."(4)

At the present time, the news is focused on the immediate disasters - Haiti, Madeira, Chile - but all the while, there is still a steady need for aid for the many poorer countries:

According to Oxfam, on current trends there will be 9.6 million child deaths in 2015, compared with the millennium summit goal of 4.2 million. The cumulative total of additional child deaths between 2000-2015 resulting from the widening gap between the millennium target rate and current trends will amount to 56 million.(1)

We cannot see just how well off we really are. As D.J. Shaw notes:

Despite progress, it is still an appalling fact that in this globalizing world of increasing prosperity, in which the richest tenth own 85 percent of the world's assets, just under one billion people subsist on less than a dollar a day, 2.8 billion (almost half the population of the developing world) exist on less than two dollars a day, and 850 million suffer from hunger in dehumanizing, abject poverty. Hunger and malnutrition kill more people every year than AIDS, malaria and TB combined, and more people die from hunger than from wars.(5)

In fact, the 0.7% is a very modest sum, as Tim Costello is chief executive of World Vision Australia notes:

The commitment required to eradicate global poverty is modest by comparison with the cost we will have to endure in combating climate change. In 20 years time I suspect that we will be shocked at how modest the request of 0.7 per cent is from the poorest trying to survive. They are not asking us to give up our consumer excesses but just to show a little charity that we could easily afford.(6)

I hope that the proposal by Senator Sarah Ferguson to "count in" personal charitable donations will not get the sympathetic hearing that I suspect it probably will with the States. She was also noting that there is not a proper accounting officer for the Overseas Aid Committee, and therefore no proper accountability to the States. This is ironic because her suggestions strike me as the worst kind of accounting to fudge figures and misrepresent Jersey's giving.

It is also doubly ironic that Jersey has no comparable scheme such as "Gift Aid" which would increase and promote that kind of giving which she would like to count as "overseas aid".

(1) http://www.moyak.com/papers/foreign-aid-overseas.html
(2) http://www.utilitarian.net/singer/by/1972----.htm
(3) The Tablet, Letters Column., (Br) Denis Claivaz, Presentation Brothers,
Geneva, Switzerland, denisclaivaz@hotmail.com
(4) The Open Society and its Enemies, vol. i, pp. 284-285)
(5) http://www.odi.org.uk/events/world_food_security/D_John_Shaw.pdf
(6) http://jmm.aaa.net.au/articles/19342.htm

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