GD : One topic a day

[tris]

Dear Puys
I am starting a thread for the GD topics.Lets post our GD topics along with suggested reading on the same.
How about this idea.By the time we go for GDs we should have a healthy collection of Topics along with write ups

[tris]

Developing countries need trade, not aid

For decades, I have argued that foreign aid is a dangerous drug that can stimulate in small doses but become fatally addictive in larger doses. I was powerfully influenced on this issue by Prof Peter T Bauer, who passed away last fortnight just after being selected for the Cato Institute's $500,000 Milton Friedman Prize for Advancing Liberty. For most of his life, his was a voice in the wilderness. When burgeoning state control was advocated by virtually all developing countries as the way to ensure good use of scarce resources, he declared that this would waste the scarcest resource of all (good administrative resources) in trying to decimate the most valuable resource of all (the enterprise and innovation of the ordinary individual). After the Cold War ended and the 20th century honeymoon with statism ended in divorce, he was finally vindicated. His views on foreign aid were ignored for decades as politically incorrect, and still are. His warnings were drowned by a host of other voices ranging from naïve do-gooders (who saw aid as a White Man's Burden) to cynical Cold Warriors (who saw it as a way of buying corrupt Third World dictators).
Yet in the 1990s India has demonstrated how limited is the role of aid in economic success. The gross inflow of aid into India has fallen from a peak of $4.7 billion in 1991-92 to $3.1 billion in 2001. Net of debt service, aid to India has been negative since 1995-96 (interest plus repayment of principal has regularly exceeded fresh inflows). The net outflow was $ 621 million in 2000-2001.
Yet the Indian economy is not collapsing, and no begging missions are being dispatched to the capitals of the world, as used to be the case in the 1960s. On the contrary, India is the second-fastest growing economy in the world after China, whose aid dependence is minimal too. We are standing on our own feet. That is the path to development.
Bauer urged people to avoid the word "aid", which sounded warm and comforting. Call it a "government-to-government transfer", he said. It was a transfer of governments, by governments, and for governments. Didn't it touch people too? Oh yes, said Bauer, aid was a transfer from poor people in rich countries to rich people in poor countries! He was among the first to argue that developing countries needed trade, not aid.
In India, the left has long castigated aid as a device used by the West to impose free markets on poor countries. Bauer, however, saw accurately that aid was the biggest financier of the public sector in history. But for aid, the size of the state in India, and indeed in all developing countries, would have been far smaller.
Aid was accompanied by supposedly stiff conditions, but this was mainly rhetoric. A World Bank staffer once told me "In the first quarter of the year, we promise to be really tough. By the second quarter, staff are getting worried that disbursements are behind schedule. By the last quarter, we are shoveling out money as fast as possible to avoid being left with undisbursed allocations. If we don't disburse, we risk losing allocations and staff next year, and who wants that?"
The Economist described delightfully the situation in Kenya in its issue of August 19,1995.
"Over the past few years, Kenya has performed a curious mating ritual with its aid donors. The steps are:
One, Kenya wins its yearly pledges of foreign aid. Two, the government begins to misbehave, backtracking on economic reform and behaving in an authoritarian manner. Three, a new meeting of donor counties looms with exasperated foreign governments preparing their sharp rebukes. Four, Kenya pulls a placatory rabbit out of its hat. Five, the donors are mollified and the aid is pledged. The whole dance then starts again."
I remember another piece in the late 1980s in The Economist on Zambia. The Zambian government had gone through seven loan programmes financed by the IMF and World Bank, and reneged on every one. A Zambian minister was asked if he was worried about the bad publicity. "Worried?" he replied. "No, not really: they always come back."
Peter Bauer warned repeatedly that politicians who followed stupid policies were being saved from the consequences of their stupidity by foreign aid. Regimes that should have crumbled because of sheer incompetence and corruption were propped up indefinitely.
In a well-run country, rulers should depend on citizens for tax revenue, and in turn be accountable to citizens. Such a social contract is crucial for good governance. But aid made donors the main source of revenue, not citizens. So rulers could ignore citizens and focus on pleasing donors instead. This could take the form of political support, or simply continuing to be poor (this was, incredibly, seen as the failure of the donor rather than the recipient).
Back in the 1950s, Nobel Laureate Gunnar Myrdal, a socialist, was a strong proponent of aid and critic of Bauer. But by the 1980s, Myrdal was thoroughly disillusioned, and declared that aid to governments was a terrible waste. Instead, he said, donors should give charity directly to poor people, bypassing the rulers. That was truly a triumph that Bauer must have savoured.
The battle continues after his death. At the recently concluded Monterrey summit in March, the World Bank demanded the doubling of aid. The United States started by criticising aid as an addictive drug but ended by pledging more money. The US treasury secretary admitted that aid was a valuable prop to US foreign policy. When a drug has such powerful backers, addicts will proliferate.

[tatimatla]

Dude...I wish I had enough knowledge to discuss the stuff with you...but one thing I can say for sure is that I'll have enough knowledge within a month...it's a promise.
Until then, me a silent spectator (and thanker)...u doing a great job indeed.

[nairpraveenk]

Originally Posted by tris

Dear Puys
I am starting a thread for the GD topics.Lets post our GD topics along with suggested reading on the same.
How about this idea.By the time we go for GDs we should have a healthy collection of Topics along with write ups

Wow.... right o!! As Tatti said, even I dont have much idea, but reading 1 GD topic 1 day, i should have a good amount of info by 1 month .

Keep up the good work dude!!

[anarchy]

Originally Posted by tris

<snip> too long to quote

Is this self composed or an article from somewhere???
because if it is self composed, then you seriously rock dude!!! It was awesome..
but in case its an article from somewhere, please write the source as well (am a doubting thomas... please don't let this stop you from making innumerable such posts!!)

[mathewgeorge4u]

hey..nice intiative

but im a big zero in the gd stuff..i havent read papers since i joined college(3+ years)..so dont know wats happening..im gonna make up for that in 1 month..till then im sorry that i cant partipicate in this

need help to improve awareness

1)wat all magazines shud i read

is it just enuf to read magazines of this year or shud i dig deep inside the archives?

[mathewgeorge4u]

Originally Posted by tatimatla

Dude...I wish I had enough knowledge to discuss the stuff with you...but one thing I can say for sure is that I'll have enough knowledge within a month...it's a promise.
Until then, me a silent spectator (and thanker)...u doing a great job indeed.

tatimatla...tell me stuff to start on...

[Ashish_4_cat]

well jus found this wonderful site
though its not totally based on GD .. but an informative one ..
really nice for latest news n archives .. might be useful to gain some GK n some gyan b4 we discuss ny GD's out here

domain-B - The first online Indian business magazine

[tris]

The future lies with glocalisation

All opportunities carry risks. Globalisation has created unprecedented opportunities and unprecedented risks too: remember the Asian financial crisis of 1997-99.Developing countries must take prudential steps to cope with volatility. But globalisation, warts and all, is still a boon. Does decentralisation have the same potential for change?
Not at the macro level. But at the grassroots level it can empower those who have long been supplicants before statism. Localisation can spread the benefits of globalisation to the grassroots. Global experience of localisation has been very mixed. It works only if rulers are serious about shifting power from the top to the bottom. Creating local governments is not enough: corresponding administrative and fiscal reforms are needed to empower communities with real authority and resources. Local governments must be elected, not appointed.
Officials must be made accountable to communities they serve, not national capitals. Communities should participate in the design, execution, monitoring and maintenance of projects meant for their benefit. Where these conditions are missing, localisation often fails. But where these conditions are met, enormous improvements have occurred. Some examples: North-East Brazil, long the graveyard of anti-poverty schemes, succeeded in the 1990s by switching to a bottom-up approach. Communities have been empowered, 44,000 community-managed projects have benefited 2.5 million of the poorest families. Benefit-cost ratios exceed 3.0, over 95 per cent of funds reach the poor, and project costs have fallen 20-30 per cent.
In Indonesia, the Kecamatan Development Program was launched in 1998 to side-step corrupt provincial governments and channel funds directly to villages. It covered 10 million people within 3 years, and greatly improved outcomes. It is now being extended to another 20-30 million people.In the 1980s, donors introduced social funds in countries where money routed through governments was typically wasted or stolen Social funds financed projects suggested by communities. Over 90 per cent of World Bank social fund projects succeeded against 76 per cent of all projects. The Bank is now scaling up social funds into community driven programmes in Africa. River-blindness, a disease spread by blackflies, once threatened the sight of 34 million people in 11 West African countries. Its eradication has been arguably the biggest development success in Africa. Aerial spraying by donors was supplemented by community action to distribute medicines, detect and treat the disease. This approach is now being extended to malaria control.
In Zimbabwe, centralised managed failed to check poaching of wild life. So local communities and district councils were made partners in a new program, called CAMPFIRE. Hunting quotas were sold to hunters, and the revenue shared with communities and local bodies, which now had a stake in checking poaching. The result: wild life boomed. In India too, experience of decentralisation has been mixed. Panchayati Raj is supposed to shift authority and resources to local governments. But most state capitals have sabotaged such a shift. Real local empowerment has been achieved only in a few states? West Bengal, Madhya Pradesh, Andhra Pradesh, Kerala. Decentralisation has produced major gains in Bengal. Poverty has fallen and agricultural productivity improved faster than in any other state. But this is a special case of communist-controlled localisation, not replicated anywhere else.Overall, panchayati raj is not a proven recipe for success in India.
But spectacular gains have been recorded sometimes through community participation, often unlinked to local governments. Examples: Traditional top-down reclamation of saline farmland in Uttar Pradesh yielded indifferent outcomes. Then in 1993 a new project organized 46,500 beneficiaries to plan and manage reclamation. This approach worked brilliantly: 69,000 hectares were reclaimed against the target of 48,000 hectares, and family incomes rose from Rs 12,065 to Rs 20,082 annually. This approach is now being extended to another 150,00 hectares, and is being copied by other states.
In Andhra Pradesh, the irrigation system was silted and run down by the 1990s. Water rates were too low to finance maintenance. Then a new chief minister tripled water charges. He made this politically palatable by creating 10,292 elected water users associations to help rehabilitate and manage the irrigation system. In six weeks in 1998 the associations completed 22,887 maintenance works at a cost of just $ 28 million. Effective irrigated area increased half a million hectares, and paddy yield rose 10 per cent.
In Madhya Pradesh, no teachers wanted to serve in remote tribal areas, where hamlets were often too small to qualify for government schools. Then a new chief minister created an education guarantee scheme. If any 40 people demanded education, provided a hut for schooling, and chose a local person to be a para-teacher, the government paid the para-teacher's salary. Within 18 months, 26,000 schools came up with 1.8 million students. Literacy in the state shot up by 20 percentage points in the 1990s.
Rural water supply by the state utility failed in UP. A new bottom-up approach called Swajal was then attempted. Village water and sanitation committees were elected, and empowered to choose from a menu of water supply options. The beneficiaries had to contribute to capital costs and pay user charges for maintenance. The village committees themselves maintained the projects. The approach proved so successful that it is being expanded into all-India scheme. Forest Departments in Andhra Pradesh could not check grazing and felling in forests by locals. So joint forest management was attempted with 2,666 village forest committees, which got a share of forest produce. More than 849,000 hectares of forest are now regenerating under improved management. Community participation seems to work better than mere decentralisation.
Villages are often not united communities but battlegrounds between different castes, and elite capture of benefits is common. Voluntary associations have a social glue that villages or districts sometimes lack, though not always. Water users associations, water and sanitation associations, education associations and micro-credit societies all deliver. Even if a project is centrally run, making users communities partners in planning, execution and maintenance has often improved outcomes and reduced costs. I think community participation is best understood as a form of privatization, where users take over from the state. The results are good because a callous bureaucracy is replaced by users with a stake in success. Community empowerment confers property rights on associations of citizens, harnessing both social capital and entrepreneurial talent. Empowering communities can be more important than empowering local governments: the latter can sometimes constitute a new statism. Localisation is still an experiment in progress. We know less about it than about globalisation. But we cannot go back on either, since both represent empowerment. The future lies with glocalisation.

[tris]

Originally Posted by anarchy

Is this self composed or an article from somewhere???
because if it is self composed, then you seriously rock dude!!! It was awesome..
but in case its an article from somewhere, please write the source as well (am a doubting thomas... please don't let this stop you from making innumerable such posts!!)

No.....no No
I have not written these articles.Just picked them from various sites