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Some foreign aid helps, other kinds do more harm than good, experts assert Print E-mail
By Bob Allen   
Friday, March 11, 2011

Even though the Green Bay Packers won this year’s Super Bowl 31-25, up to 100,000 individuals in developing countries are wearing new T-shirts erroneously labeling the losing Pittsburgh Steelers as NFL champions.

For marketing purposes, the NFL preprinted memorabilia for sale at the final gun of the Feb. 6 contest regardless of which team prevailed. Afterward, the league announced a $2 million in-kind gift of the misprinted Steeler apparel to World Vision, a Christian relief organization synonymous with helping children worldwide by addressing the root causes of extreme poverty.

A gesture most Americans likely celebrated as win-win brought quick condemnation from experts labeling it “bad aid,” well-intentioned acts that wind up doing more harm than good.

Critics said the NFL got a big tax write-off, but since the Steelers weren’t really champs, the retail value of the T-shirts was next to nothing. That prompted an ongoing argument about the narrow equation between whether “gift-in-kind” items like used clothing help the poor or hurt them by competing with local industries and giving away items that could be produced locally for less money than it costs to collect, process and ship them overseas.

World Vision responded that opinions about such gifts—discussed among experts by the acronym GIK—range from absolute opposition to belief that any product sent with good intentions is helpful. World Vision claims a middle-ground it calls a “nuanced conditional strategic use of product in appropriate contexts.”

Laura Seay, an assistant professor at Morehouse College who attended First Baptist Church in Austin while earning her doctorate at the University of Texas, maintains some GIK contributions are good and even necessary for sustainable development. Examples are antiretroviral drugs for treatment of HIV/AIDS and technical items for digging wells. They only work, however, if they are highly targeted and valued by the recipient.

Cheaper items that are readily available and affordable anywhere in the world are at best wasteful and at worst hurt the very people they are intended to help, experts say.

Garth Frazer, an associate professor of economics at the University of Toronto, argued in a widely read article that one major reason many African countries haven’t developed their own major textile industries is the influx of used clothing donations by consumers in industrialized nations.

Success stories over the last 30 years in East Asian countries like Taiwan, Korea, Singapore, Hong Kong and more recently China began with production and exporting of textiles and apparel, Frazer said. As their economies grew, those countries moved to manufacturing higher-ticket items like electronics and automobiles.

By contrast, African economies have stagnated, with many countries unable to step onto even the bottom rung of the manufacturing sophistication ladder by producing and exporting their own textiles and apparel. That is despite Africa’s low unskilled wage levels and abundant supplies of cotton.

Used-clothing donations to charities have increased dramatically over the last 20 years, Frazer said. What many people don’t know, he added, is that thrift shops are able to sell only a portion of what they collect. The rest is sold to exporters who ship it to developing countries at a very low cost.

About 16 percent of containers in ships with U.S. exports bound for Africa in 1995 were filled with used clothing. That flood of imports had a “significant negative impact” on textile and apparel production sectors in sub-Saharan Africa, Frazer said. He calculated a 39 percent annual decline in apparel production and roughly half the annual decline in apparel employment attributed to cast-off clothing.

Eric Raikes, a graduate student at the University of Toronto, wrote a blog arguing why he thinks the NFL/World Vision T-shirt giveaway was a bad idea.

“First, it creates a dependency on aid,” he wrote. “Second, seeing economic production as a possible alternative to aid, it stifles local economic development in favor of cheaply imported goods.”

Beyond that, Raikes argued that shipping 100,000 shirts to developing countries is a bad use of resources. Studies show that on their own, in-kind donations like clothing and food instead of money are reasonably efficient forms of aid, but when you factor in the cost of administration and delivery, they are not cost-effective.

Finally, Raikes said his type of marketing “entrenches ideas of naked Africans who are oh-so-grateful for your shirts” and promotes Western people as “saviors” or “white knights” while encouraging wasteful consumption—people only give away old shirts after they buy new ones.

Seay, who writes regularly about third-world economies in a blog titled Texas in Africa, said the T-shirt giveaway was not only “bad aid” but also “unnecessary aid.”

“There aren’t any places in the world where T-shirts are not available at a market price determined by the local economy and affordable to local consumers,” she wrote.

Both the NFL and World Vision get benefits—the NFL for taxes and World Vision for its bottom line—she said, “and don’t owe anyone an explanation of whether the T-shirts actually do anyone any good.”

Finally, Seay said, there is an “opportunity cost” to shipping clothing items to people who don’t want them but have other serious unmet needs.

 
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