Impact of foreign aid on rwanda's socio-economic development as guided by Millennium Development Goal (MDG) 1 “Eradication of extreme poverty and hunger”:case of Gasabo District

2.2 Conceptualizing aid, development, poverty and hunger

Aid is simply the transfer of money, goods and technical assistance from a donor to a recipient. According to Todaro, [1981], foreign aid is any official development assistance or "any flow of capital to least developing countries...» and its objective should be characterized by "concessional» terms, that is, the interest rate and repayment period for borrowed capital should be "softer" [less stringent] than commercial terms". One may observe that, Todaro?s conceptualization of aid in this case takes for granted that the impact of any such aid is

development; but unfortunately it misses the point that development is relative. On one dimension, development depends on the perspective of the beholder; in which case the donor, the recipient of aid and the independent observer all judge the impact of aid from different angles and with different sensibilities. Against this background, the Government of Rwanda and its Development Partners have put in place a number of inter-linked forums for dialogue on aid coordination at different levels. At the 2006 Government of Rwanda and Development Partners Meeting, Rwanda?s donors presented a joint statement of their intent with respect to the implementation of Rwanda?s Aid Policy and the Paris Declaration. As part of this, donors agreed to adopt the 2010 targets above as individual targets, recognizing that collective achievements against the Paris targets rely on the efforts of individual partners. Central to in-country dialogue around aid effectiveness are a number of key forums that bring together government, donors, civil society and the private sector at a number of levels:

Figure 2.1: Aid Coordination Architecture in Rwanda

Source: MINECOFIN, 2007

On another angle one may argue that the concept of aid may be best understood from a historical perspective. During colonialism, European colonial powers were concerned with the economic development of the territories they occupied, hence they often released economic assistance to their proxy governments in the occupied territories. Whether the beneficiaries of the assistance were the minority ruling white elite or the majority ruled Africans was not an issue for serious auditing by aiding cosmopolitan governments. Mikesell (1983: 1) posits that even after independence «much of their economic assistance to the new independent states formed after World War II constituted a continuation of their development and other economic assistance during the colonial period».

On the other hand, the World Bank charter of 1944 argues that the Developed Countries had a dual function of promoting the reconstruction of the war-torn countries, developed and developing, and of promoting economic development in the less developed countries (ibid). The concept of development assistance as enshrined in the Articles of Agreement for the World Bank aims at promoting the flow of private international capital in the form of both loans and direct investment investments to developing countries (Mikesell 1983). To this end, from a Utopian perspective, Aid would best be defined as loan, grant and technical facility advanced by a Donor nation to a Recipient sovereign state with neither political nor economic motivations but to promote the reformative and legacy reclamation efforts of the latter [Recipient] through facilitation of the development of democratic processes and deepening integration based on principles of mutual cooperation, non-interference and respect for sovereignty. Nonetheless, political and economic interests have often overshadowed what has often been projected as purely humanitarian. And this reality is fore-grounded by the different perceptions of aid by the

Donor and the Recipient; prompting one to proceed with further clarification of what development (and economic development in particular) really entails for the two parties? perspectives. Webster?s Dictionary (1990:248) advances that development means "bringing to more advanced and effective state or to cause to grow and expand». In this regard, this classical definition when adjusted to the contemporary debate would be conceived as an all-encompassing and multi- faceted process characterized by both qualitative and quantitative changes in the diverse sectors of human society, namely social, economic, political, cultural, scientific and technological, environment, that inherently lead to overall improvement of human and community welfare, as well as deepening of mutuality and cooperation within and between communities.

From time immemorial, economic development on the other hand is often taken in a narrower sense as development of infrastructure and institutions which prop the economy. Such a definition is confined to one or two variables yet, as a process, development itself is really a complicated, holistic and complex reality. For this reason social factors are as important as economic factors in understanding development and this calls for a mutual conceptualization of the imperatives of the politics of aid for this purpose which is regrettably missing as the nature of and processes of aid are dictated by those who offer the aid, hardly with either consultation or local participation of the intended beneficiaries. This makes the recipient a passive pawn in the scheme of the aid process. In the final analysis it is the donor who defines the problem and designs and provides his own solution for a perceived problem in the recipient; thus the intended resultant development is logically not that of the recipient but of the donor who also defines the progress. (Andrew Sikula, 2009).

Hunger and poverty are often the main causes cited by donors (acting as senior brothers) as the main causes of their humanitarian intervention. http://www.worldbank.org/prem/poverty. These are again defined as crises by the donor, and whether these are priority one for the beneficiary or secondary to other pressing needs is a question donors ever address. Everything falls within the blueprint plan of the donor. Even the way hunger and poverty are defined is equally circumscribed.

Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see [afford medication] the Doctor. Poverty is not being able to go school and not knowing how to read. Poverty is not having a job; it is fear of the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom (ibid). It is from this understanding of poverty and hunger that the Millennium Development Goals (MDGs) were drafted by the United Nations, the mother institution to the World Bank and International Monetary Fund. The MDGs took tangible form in the Millennium Declaration of world leaders in September 2000. The declaration reflects an inspirational agreement that the global community will unite to eliminate the scourge of poverty in a finite time frame (Marshall and Keough: 2004:4). In this context, the Millennium Development Goals? (MDGs), Goal Number 1 is of particular interest to this study. The goal targets :«To eradicate extreme poverty and hunger, by halving the proportion of people living on less than $1 a day and those who suffer from hunger» (Todaro, 2006: 24). One may observe that, although goal number one is the most explicit about poverty alleviation, all of them also contribute in part to the overall elimination of poverty and want in spirit.

Chambers (1983), is of the view that poverty constitutes: lack of assets (inadequate stocks, food and income), physical weakness and sickness, isolation, vulnerability to contingencies (insecurity) and powerlessness. Jazairy et al cited in Shepherd, (MEMIEIEI1 1;GEYLEImMI\E definition by identifying four types of poverty: interstitial poverty (pockets of poverty surrounded by wealth), material deprivation combined with isolation and alienation (peripheral poverty), overcrowding poverty in areas of population pressure, and traumatic/sporadic poverty - temporary poverty into which the non-poor may be thrown by crisis (e.g. war, drought and famine). One may suggest that, these categories, however, do not seem to encompass those who are chronically poor and those in absolute poverty, neither do they focus specifically on poverty in a rural setting such as part of Gasabo district.

Ribas and Machado (2007) further observe that chronic poverty can be analyzed in terms of absolute or relative deprivation. In pursuit of a plausible definitional view, Mickay and Lawson (2002) provide characteristics of chronic poverty which include, inter alia, lack of human capital, the demographic composition of households, location of residence, lack of physical assets and low paid labour. On the other hand, transient poverty is characterized by family size, government transfers, and seasonality of economic activities, migration and life cycle events. As a matter of fact the distinction between the two implies that public policies cannot be uniformly applied (Gaila and Deolalikar, 1993; Barrientos et al 2005). Similarly, Kurien (cited in Chambers S.EEI\EGeIVARQERIESRYIBWEI\: EEKEE\RF1R-economic phenomenon whereby the resources available to a society are used to satisfy the wants of the few while the many do not have even WILEba\IFEKTeG\ Emet?. ETKI\EGIIIMIRnEi\Eal\R EIMatiYIEinEMMI.