Analysis: Mali’s aid problem
BAMAKO, 5 August 2013 (IRIN) - There is little discernible economic infrastructure on the 635km drive from Mali's capital, Bamako, to the central town of Mopti, except for speed bumps and checkpoints where local vendors congregate to target vehicles as they slow. Rusted signs and faded banners from international donors dot the scrubland, advertising development projects either long abandoned or never undertaken.
It is difficult to reconcile the poverty and dysfunction in Mali with the pre-conflict and pre-coup narrative of development success espoused by multilateral organizations and international NGOs alike. Right up until the ouster of President Amadou Toumani Touré in March 2012, the West African state was a darling of the aid community, lauded for having strung together multiple successful democratic transitions since 1991.
But the data tell a different story.
At best, aid to Mali has been ineffective from an economic or institutional development perspective, enabling corruption, undermining the government's will and ability to raise revenue through productive means or taxation, and insulating it from accountability to the population, according to analysts and observers. At worst, these conditions directly led to the conflict in the north and political crisis in Bamako.
Money for nothing
Mali is one of the poorest countries in sub-Saharan Africa, ranking 182 out of 186 on the 2012 Human Development Index (HDI), 34 out of the 45 countries in sub-Saharan Africa in terms of 2012 GDP purchasing power parity (PPP) per capita, and has a negative real GDP growth rate.
As such, the country is heavily dependent on foreign aid, with the Organisation for Economic Co-operation and Development (OECD) estimating in 2008 that donors provided 60 to 80 percent of Mali's special investment budget.
Though the country did achieve substantial GDP growth rates after the 1990s, the failure of that growth to improve the quality of life of most Malians suggests that it was most likely due to currency devaluation and gold exports rather than real economic production, said a working paper of the United Nations University-World Institute for Development Economics Research.
Further, anecdotal evidence suggests that aid has become something of a self-perpetuating system in Mali, generating employment while the dollars are turned on, but failing to create the conditions for sustainable economic growth, poverty reduction or institutional development.
"When the NGOs left, we were hit twice," said a youth advocate in Mopti, speaking of the retreat of donors after the 2012 coup. "Of course the aid projects were important, but the unemployment effects were worse - up to 30 percent of youth worked for humanitarian organizations."
These economic conditions cannot be attributed to the coup leaders, the separatist Tuareg rebels or Islamist militias; the country has languished at the bottom of the development pile since long before the 2012 coup and even before the HDI was first published in 1990.
Crisis of confidence
Mali has fared little better in terms of its political and public sector institutional development.
From 2003 to 2011, the country consistently ranked as mediocre in popular perceptions of public sector integrity, and in any given year was worse than at least half of the rest of sub-Saharan Africa. Tellingly, the single largest increase in public confidence, a 21.4 percent improvement, came after the 2012 coup.
Further, for every election cycle from 1992 to 2007, Mali largely trailed its Sahel neighbours in voter turnout for both parliamentary and presidential contests.
According to a February 2013 Malian opinion poll, the two most frequently cited perceived causes of the country's various crises were "lack of patriotism among leaders" and "weakness of the state" (31 percent and 16 percent, respectively); a full 76 percent of respondents were unable to name their political representatives.
Aid and accountability
Channelling aid through the government of a country that suffers from endemic corruption at all levels perverts the state's incentive structure, say analysts. It removes the need for the government to be externally accountable to its outside investors, in this case donors who knowingly participated in corruption. It also internally eliminates the need for the public sector to develop basic governing institutions, which represent the "vital link of accountability between state and citizen," according to aid expert and author Jonathan Glennie. Without this accountability, citizens are removed from the political process and elites are free to extract and expropriate from the state with abandon, creating the conditions for state failure and conflict.
One local manifestation of this lack of accountability and oversight is the diversion of aid resources. According to Mahmoud Cheibani, a teacher at a Timbuktu secondary school, "we are poor not because of a lack of aid, we are poor because aid does not reach the targeted populations."
The situation is particularly problematic in the north.
According to the head of a local Malian NGO that operated in the north throughout the crisis and the Islamist occupation: "In Timbuktu, the president of the Haut Conseil Islamique [High Islamic Council] takes the biggest cut; in Gao it is the mayor; in Kidal it is the Intallah) family [Ifoghas Tuareg tribal leaders]."
Aid and conflict
At the sub-national and sub-regional level, there have been situations in which aid money has clearly fuelled ethnic conflict in Mali.
One prominent example was an ill-fated UN Development Programme project after the 1990s rebellion, where millions of dollars intended for disarmament, demobilization and reintegration of ex-combatants were given disproportionately to one ethnic group, the Ifoghas Tuaregs, and directly used to buy loyalty and consolidate power at the expense of their ethnic rivals, the Imghad Tuaregs.
Tracing a causal relationship between aid and conflict at a macro scale is more difficult, but several rigorous studies have confirmed this anecdotal evidence from Mali.
The argument is that aid drives conflict in countries that suffer from a low degree of institutional development and a high degree of unchecked executive power, instigating competition for "rents" - non-tax revenues - among elites. This is Mali in a nutshell: disproportionate executive power, bolstered by foreign aid that is channelled primarily through that branch of government at the expense of other institutions, widening the gap between citizenry and leadership and driving competition for the money.
Taken together, these data suggest that Mali's problems are rooted in its institutions and further corroborate what some scholars have already asserted: the coup, Tuareg rebellion, al-Qaeda penetration and corruption of the state were all symptoms of the same basic institutional dysfunction. Nothing has fundamentally changed to address the deficiencies in accountability and oversight, yet over US$4 billion of development aid is poised to come online at the conclusion of the current political transition.
At such a critical transition point in Mali's development, prospective donors would do well to examine new models and priorities for ensuring the effectiveness, sustainability and value of development projects.
Certainly not all aid is counterproductive, and this data by no means implicates all humanitarian relief efforts. Emergency disaster response by multilateral organizations and local and international NGOs was critical to mitigating the 2011-2012 Sahel food crisis, for example. But developing strong Malian institutions capable of taking the lead on such a response would ultimately be the most effective and sustainable path to prosperity.