Official Development Assistance and Terrorism

Assoc. Prof. Bayram GÜNGÖR*


Introduction

More than 1,2 billion people try to survive their life below $1, while nearly 2.8 billion population live on less than $ 2 at purchasing power parity. These people are poor and plagued by inadequate health, nutrition, and education. They are also living on environmentally degraded urban areas and using make-shift houses in poor conditions. Those poor people living in less developed countries have also extremely limited choices. Therefore, they may tend to participate in any illegal activity including terrorist acts. Especially, it has seen that this tendency to participating in terrorist acts is growing and growing after the early years of the new millennium. In fact, even if there is no direct causality between poverty and the participation to the terrorist acts in the academic studies, indirect effects are evident. Starting from these implications, especially after September 9/11 attacks, the security notion was redefined by the USA taking the existence of indirect effects of poverty on terrorism into account. Essentially, even if the new security policy is not new in theoretical level, the content of it is regarded as new, which is called as preventive intervention. The policy will be made in order to terminate the anticipated source of the terrorist acts. Mechanism used here does not only consist of military methods, but also economic development assistance. The assistance will be given to the countries known as the center of the terrorist acts and subjected to minimizing terrorism in their own territories. The aim of this strategy is to prevent the participation in the terrorist organizations. This policy is based on the sense of individual security. The better the living conditions for people, the less participation the terrorist activities will involve and thus the lower the logistic supplied to terrorist activities there will be. For this reason, security is no longer defined under the protection of national borders. Instead, dignity becomes the main instrument of the frame of security policy.

“security is no longer defined under the protection of national borders. Instead, dignity becomes a main instrument of the frame of security policy.” 

Therefore, the assumption of providing development assistance to poor countries would reduce terrorist actions. Especially after September 9/11, a new type of development assistance has been implemented. However, this current form of development assistance has not met the expected contributions. Therefore, it is clear that some new complementary mechanisms such as the applications of global governance and good governance should be introduced to solve the efficiency problem of current official development assistance.

Official Development Assistance

Development assistance is a tool that is supplied by developed countries or international organizations to less developed countries with respect to economic, social, and political affairs. The main reason of this support is to provide a development strategy in the determined fields in the long-run. This type of assistance makes the recipient countries more efficient especially in stimulating foreign trade and local resource using (Clark, 1992, p.190). Development assistance is different from humanitarian assistance. It may have bilateral and multilateral levels. While a country’s bilateral development assistance is given directly by another country, multilateral development assistance is provided to countries indirectly in the framework of an international organization.

While approximately 80 percent of world development assistance is given by developed countries with respect to the Official Development Assistance (ODA), the remaining 20 percent of assistance belongs to non-governmental organizations such as World Bank Group and the UN. That labor force still working in foreign countries provides a contribution to the development of their native countries by sending their excess resources as a remittance.

The changes of the ODA in post -cold war period are widely accepted in developed countries. Following the Second World War, the assistance from rich North to poor South contains the political feature rather than the needs of countries. While development assistance aimed to increase the military capacity of countries that were exposed to communist threats before, today, nearly it is aimed to encourage economic growth and to strengthen democracy. In this context, the ODA has been redefined in 1969 (Beall and others, 2006, p.54-55). In recent times, this approach has been applied even stronger.

The global security agenda is also changed after the September 9/ 11 attacks. “War on Terror” was declared. Most of the political debates about terrorism have concentrated on preventive policies (Abadie, 2006, s.50). Leading multilateral organizations and donor countries have also changed their development assistance priorities and emphasized the struggle against international terrorism in light of the last approach. Together with the changing global security agenda, three challenging areas were identified. Although none of these areas are new, risks of the new approach are quite different because the risks are extremely high compared to the old ones. The first of the challenging areas are concerned with the goal of the assistance. Accordingly, the aims of development assistance from donor countries to poor countries don’t reduce the poverty rather than guaranteeing their own security. Second is about the Money. Because of the fact that combating against terrorism is very expensive, the donor countries have preferred gradually to reduce the budget for the assistance. The third one is about the method of assistance. The donor countries have failed to organize coordination with international institutions. Instead, every donor country has carried out their own mechanism and followed their own priorities. Therefore, in most recipient countries, some chaos has been experienced on the followed assistance method (Woods, 2005, p.393).

While creating this new agenda, the OECD’s Development Assistance Committee -DAC has made significant development assistance to Afghanistan, Iraq, and Pakistan. On the other hand, such assistance method preference brings some disadvantages for low and middle-income countries such as the assistance cuts. In this context, more assistance has gone to the countries that fight against terrorism at the forefront (Beall, 2006, p.57). Assistance is increasing day by day. However, it is not thought that the development of a country can not be accomplished only by the assistance. Besides, something must be done. It is extremely important to create strong civil society organizations and to ensure good governance (Beall and others, 2006, p.62).

The ODA committee is an assistance unit that is formed by the OECD. Here, the 23 member countries make development assistance to less developed and developing countries. The amount of assistance of the ODA in 2009 was 119 billion 573 million dollars. Table 1 shows the country assistance in 2009.

Table 1: Net Official Development Assistance (2009-Billion Dollar, Current Price)

Country ODA

ODA/GNI

Country ODA ODA/GNI
Australia 2,761 0,29 Luxembourg 403 1,01
Austria 1,146 0,30 Holland 6,425 0,82
Belgium 2,601 0,55 New Zealand 313 0,29
Canada 4,013 0,30 Norway 4,086 1,06
Denmark 2,810 0,88 Portugal 507 0,23
Finland 1,286 0,54 Spain 6,571 0,46
France 12,431 0,46 Sweden 4,546 1,12
Germany 11,982 0,35 Switzerland 2,305 0,47
Greece 607 0,19 England 11,505 0,52
Ireland 1,000 0,54 USA 28,665 0,20
Italy 3,314 0,16 Japan 9,480 0,18
Korea 816 0,10 DAC Total 119,573 0,31

Source: compiled from www.oecd.org/dataoecd/17/9/44981892.pdf.

Table 2: Other Development Assistances (2009-billion dollars, Current Price)

Donor ODA ODA/GNI Donor ODA ODA/GNI
EU Institutions 15,022 Hungary 116 0,09
DAC-EU countries 67,135 0,44 Iceland 34 0,33
G7 countries 81,390 0,26 Poland 343 0,08
Non-G7 countries 38,183 0,50

Slovak Republic

74 0,08
Czech Republic 224 0,12 Turkey 718 0,12

Source: compiled from www.oecd.org/dataoecd/17/9/44981892.pdf.

In 2009, the countries that gave more development assistance are the USA, France, Germany, Britain, and Japan. The USA is the donor country that provided the highest amount of assistance, approximately 24 percent of the total. Table 2 shows the assistance provided by other countries and institutions.

Unlike the ODA Committee, the most important donor unit in the framework is the formation of G7 countries. The donor unit following the G7 is the European Union countries and its own agencies. Turkey is also among the donor countries with 718 million dollars assistance in 2009. Table 3 shows the recipient countries in the period of 2006-2008.

As of 2008, it is commonly seen that the recipient countries that have received the official development assistance from the ODA Committee are the countries whose territories are mostly exposed to the terrorist activities at the same time. This distribution of the official development assistance also gives information about the nature of the new assistance approach.

Terrorism

Terrorism is not a new fact. Even more it is as old as wars. It is also called as an asymmetric war. There are so many definitions that are used on terrorism. According to Krueger and Maleckova, terrorism is a politically motivated violence that generally aims to affect people. It is designed by sub-national and secret agents taking an action against some determined targets (Krueger; Maleckova, 2003, p.120).

According to Clapham, terrorism is a multilateral political action figure that obtains under limited and special conditions. The analysis of this circumstance that is stimulated by conditions is required an unbiased assessment. However, considering the nature and effects of terrorism, it should be known that making such an unbiased assessment is too difficult (Clapham, 2003, p.13).

 

Table 3: The Recipient Countries Using Official Development Assistance from ODA Committee (million dollars)

Country 2006 2007 2008
Afghanistan 2,956 3,965 4,865
Iraq 8,870 9,176 9,870
Sri Lanka 786 613 730
Indonesia 1,311 894 1,225
Turkey 566 792 2,024
Tanzania 1,814 2,820 2,331
Sudan 2,044 2,112 2,384
Pakistan 2,140 2,244 1,539

Source: compiled from “Development Aid At a Glance 2010: Statistics by Region 2010”, www.oecd.org

There are some special reasons for the emergence of terrorism: (Lancester, 2000, s.2.). Firstly, there is the existence of a problem which is protested by the terrorists or that perhaps they are trying to solve. Secondly, what should be done to solve the problems concerning ideology or belief systems? Finally, there is a belief that terrorists will provide a contribution to the solution of problems. These problems may be concerning with the soil, ethnic presence, and religious context. Terrorism has also some purposes of tactics (Krieger, 2008, p.2). They can be summarized as holding public and media attention, making an unstable form of administration, and damaging the economy.

Terrorism and Poverty

Although it has been observed that there is a relation between poverty and terrorism in the academic literature, it is not very explicit (Wolfensohn, p.1). Furthermore, terrorism appears to be related to the economic business cycle period since economic weaknesses increase the likelihood of terrorist activities (Bloomberg at all, 2004, p.477). Terrorist who put terrorist action into practice throughout the world have seen quite rich individual and country contexts. However, it should be known that weak economic growth, low per capita income levels, income distribution inequality, poor education, and the other characteristics of poverty make people angry. This causal relationship is multifaceted. Poverty has got various channels that can affect the terrorist activities (Briefing Paper, 2009, p.1 -2).

• Poverty provides the development of the idea of relative poverty and increases the discontent of people.

• Poor people are less educated. Indeed, poverty and inadequate education are seen in common.

• Poor countries are often weak countries.

These countries are more prone to be host of terrorist groups.

• There is a strong linkage between the economic downturn and the religious life.
It is clear that armed conflicts with terrorist organizations affect the economic development of a country negatively. This negativity can also be expressed as follows (Gupta and others, 2004, p.405);

• Undermining confidence in the domestic currency due to the fear of inflation and devaluation affects the financial depth of a country negatively.

• Shifting funds from efficient areas such as capital markets or banking to ineffective areas such as gold or other precious materials.

• Undermining order and control of the financial system.

• Increasing the transaction costs of domestic and foreign trade.

• Rising additional security measures creates negative impacts on goods and services.

It is obvious that the armed conflict and terrorism affect the financial accounts by constricting the tax base due to disrupting economic activities, reducing the effectiveness of tax administration, disrupting the composition of public expenditure. The bottlenecks that occurred due to insecurity and violence lead to reduced tax revenue. It can even destroy the tax base.

Military spending rises due to the conflict and terrorism and should remain high even after the cessation of the violence. High-security spending may change the composition of public expenditure by reducing expenditures in education, health, and other productive fields. In addition to this, that violence destructs the physical infrastructure and human capital directly and it has various impacts on trade and tourism. Job security indirectly weakens financial position and affects the economic growth negatively.

Terrorist activities become also effective on the consumption and savings rates. Political violence increases risks related to savings. In this case, individuals in such uneven environments do not want to excess resources because of the security threat. Resources are moved to safer areas. This also leads to a decrease in the level of investment in the country. Therefore, the economic growth rate occurs at a lower level in accordance with the national sources. Terrorist activities also make a negative impact on profitability by increasing the risk premium, reducing the expected profits, and decreasing the stock market investments (Frey and others, 2007, p.9).

It is obvious that terrorist activities have positive and negative effects over the long term sustainable growth. The first negative effect is called crowding-out effect. Increases in the defense spending of governments will reduce the public expenditures, which can likely to contribute the economic growth positively and also reduce the resources which can be allocated to the private sector. Second negative effect occurs when positive supply-side diffusion effects of defense spending in the economy will affect the non-defense spending. Finally, defense spending has also a resource mobilization impact on savings and investments. The positive effects of defense expenditures involve the consequences of strengthening internal and external security. Defense spending provides some contributions to the economy by pulling foreign investments into the country. As a result, economic growth is accelerated (Gupta and others, 2004, p.406). However, in general, it is accepted that the size of positive and negative effects of defense spending on economic growth is controversial.

To understand the relationship between poverty and terrorism, the Human Development Index-HDI values is required to be examined in the countries in which majority of the terrorist activity centers are located.

As it can be seen from the table 4, it is observed that per capita income, health conditions, life expectancy indicators are well below the world average in the countries where terrorist activities are very intense. Among these countries, Turkey has the highest human development index value and Afghanistan has the lowest HDI. Table 5 shows the HDI values by taking the regional status into account.

Table 4: Human Development Index-2009

Country Education Index Life Expectancy at GDP (US Dollar) HDI
Afghanistan 0,354 43,6 1,054 0,352
Turkey 0,828 71,7 12,955 0,806
Indonesia 0,840 70,5 3,712 0,734
Sri Lanka 0,834 74 4,243 0,759
Iran 0,793 71,2 10,955 0,782
Pakistan 0,492 66,2 2,496 0,572
Namibia 0,811 60,4 5,155 0,686
Egypt 0,697 69,9 5,349 0,703

Source: compiled from Human Development Report 2009, p.171-174.

Table 5: Regional Values of the Human Development Index (2009)

 

Education

Life Expectancy at Birth

GDP

(US Dollar)

HDI  
Arab States 71,2 68,5 8,202   0,719
Central and Eastern Europe and CIS 97,6 69,7 12,185   0,821
East Asia and Pacific 92,7 72,2 5,733   0,770
Latin America and the Caribbean 91,2 73,4 10,077   0,821
South Asia 64,2 64,1 2,905   0,612
Sub-Saharan Africa 62,9 51,1 2,031   0,514
OECD 79,0 32,647   0,932
European Union 79,0 29,956   0,937

Source: Human Development Report 2009, s.174.

According to Table 5, the regions where more terrorist activities are taken place have low index values compared the other regions. They also have low development indicators.

Conclusion

It is observed that the Official Development Assistance can not solve the development problem of the recipient countries alone. However, it can help reduce the poverty by increasing the effectiveness of such assistance. So, the individual participating in terrorist activities and terrorist organizations may be minimized. The most effective support to improve the efficiency of development assistance is the administration of the assistance policy in the context of the “Global Governance”. As it is known, terrorism is seen in the international level. No country by itself can solve it. Therefore, international cooperation is required in order to solve this problem. The Global Governance policy including international cooperation against international terrorism should be introduced as soon as possible. Beside the global governance policy, “Good Governance” practices in less developed recipient countries will provide significant contributions to solving not only the problems of development and but also the problems of terrorism.

Notes:

* Bayram Güngör is Associate Professor at Karadeniz Technical University, Turkey.

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