Aid rather than investment, is the key to closing the developing gap. Discuss.

Many investment schemes have been unsuccessful in closing the development gap, as they can be too expensive and the effect does not pass down to the general population as it is to help the national economy, rather than the people. On the other hand, many aid schemes have helped to close the development gap, especially the bottom-up schemes, as they have a rapid (and usually long-term) impact on peoples quality of life and standard of living, rather than helping the national economy. Aid refers to the assistance given to help the developing world whereas, investment refers to the flows of money to the developing world to set up factories and fund construction. An example of an aid scheme that has been successful in closing the development gap is the bottom-up scheme in Barlonyo in Uganda, to help farmers break the poverty line. This scheme has allowed all farmers to have an equal say in any decisions, including women. It also enables all farmers to share the cost of hiring a truck, therefore improving their profits by allowing them to sell directly to the consumers. The NGOs involved have also helped by contributing items to improve farm output and efficiency such as ploughs and hand hoes. Another example of a successful aid scheme is Practical Action in Nepal. This has helped to close the development gap as they work with some of the poorest and most vulnerable communities, to help improve their quality of life. For example, a foot-driven treadle pump has been built to help the locals collect water for both domestic use and farming. It is an effective irrigation system that allows people to collect water quicker than usual. An example of an investment scheme that has been unsuccessful is the Akosombo Dam in Ghana. The dam was built to provide electricity through an HEP plant however, although it gives Ghana the capability to generate electricity for industrial purposes, most Ghanaians still have to live without electricity, because they cannot afford it. As well as this, the HEP plant is owned by an American company, so profits from export sales of electricity go back to the USA, and not to Ghana. Furthermore, less silt now reaches the fields downstream, which has led to falling crop yields and reduced income for some farmers. However, not all aid schemes are successful. For example, the Pergau Dam in Malaysia was widely condemned as a waste of money, which is unlikely to produce any longterm benefits for Malaysia. This is because it cost three times more to build than a gas-fired power station, and also cost the Malaysian government an additional 100 million. In addition, large areas of fertile flood plain were flooded by the dams lake, and thousands of farmers were displaced. Moreover, its generators can only be used at peak energy hours, because the volume of water in its lake is only enough to allow the dam to operate for a few hours at a time. As well as this, not all investment schemes are unsuccessful. For example, the Brameen Bank has provided loans to many people with the agreement that it must be used to engage in viable income-generating activities such as weaving, pottery and transport services. Women were also initially given equal access to the schemes, and proved not only reliable borrowers but astute entrepreneurs. As a result, they have raised their status, lessened their dependency on their husbands and improved their homes and the nutritional standards of their children. Therefore, due to the shift from agricultural wage labour to self employment, there has been a sharp reduction in the number of Grameen Bank members living below the poverty line. Overall, although it is shown that both types of schemes can prove successful, it is clear that bottom-up aid schemes are the most successful as they help the local people and local economy first, providing more long-term solutions. This results in a better quality of life and standard of living for the poor, helping to close the development gap.

Ben Steadman