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To Aid or Not to Aid?

Omar Shahabudin McDoom

What should donors do when confronted with regimes that violate important normative standards of state behavior and commit human rights abuses, war crimes or other grave ethical transgressions?  During the Cold War, instrumental use of aid to support strategic foreign policy objectives provoked little controversy if it supported allies whose behaviour affronted morally. Today, however, ethical concerns whose roots lie in primarily Western conceptions of justice and liberty find stronger expression in public opinion and civil society. Indeed, human rights are likely to be part of the post-2015 development agenda. Taxpayer-funded support for illegitimate and repressive regimes faces much stronger scrutiny now, especially in times of austerity at home.

Post-genocide Rwanda represents one particularly high profile and difficult dilemma for Western donors. Rwanda is not an unequivocal case of an egregious wrongdoer. Its critics point to the country’s poor performance in international measures of human rights compliance and political freedoms, and the regime stands accused by the UN of promoting war in eastern Congo. Yet the same regime enjoys the moral distinction of ending the genocide whilst the world stood by—inaction that now weighs heavily on the bystanders’ consciences and that constrains their criticisms. The regime has also made remarkable achievements in respect of growth, public good provision and, according to government data, also poverty and inequality reduction, notwithstanding the enormous damage to its society and economy wrought by the violence. The dilemma has keenly tested the judgment of Rwanda’s second largest donor, the UK. In the course of last year, DFID suspended, reinstated, and then suspended again budgetary support for Rwanda. Its equivocation tells of the complex choice that donors face in whether to aid or not to aid regimes whose ethical records raise concerns at the international level.

The arguments are persuasive on both sides of the debate. Freezing aid, in full or in part, is a method for signalling disapproval of government behaviours that violate international obligations and other important normative standards. Enforced consistently, it can help build and sustain an international legal and moral order. Moreover, to ignore offending behaviour can have very serious consequences. Rwanda, for example, was itself a highly-favoured aid recipient on the eve of its 1994 genocide, despite a series of credibly documented ethnic massacres prior to this. The stakes, however, need not be so high to justify donor response. Continued support of a regime that is unresponsive to and repressive of its citizens undermines the coherence of a development programme whose explicit objective is to improve the welfare and alleviate the suffering of the poor.

Yet the counterarguments are also strong. Should wealthy donors enforce standards of acceptable behaviour for poorer aid recipients? The question is particularly relevant if consistent enforcement is subject to political considerations and if donors are vulnerable to claims of dual standards. Freezing aid may also, depending on the nature of the aid, ultimately end up punishing the poor for the actions of their leaders. Moreover, the ruling elite in highly aid-dependent countries may engage in radical measures to assure their survival if the regime’s stability is threatened. The effectiveness of cutting aid is also questionable. It may take time for the effects to be felt, especially if donors do not co-ordinate among themselves ,or if the regime can turn to another source of financing. China’s strict policy of non-interference in the domestic affairs of other states for example makes it an attractive alternative to Western donors.

An assessment of Rwanda today yields a mixed record. Positively, President Paul Kagame and his ruling Rwandan Patriotic Front (RPF) have set out an ambitious vision for Rwanda to become a middle-income country by 2020, and they have made remarkable progress since 1994. Growth has averaged over 6 per cent per annum, the service sector has overtaken agriculture in its contribution to GDP, regional trade has gone up, and most recently poverty and inequality have gone down according to the latest government data. The social sectors have recorded progress too. Child and maternal mortality have dropped significantly and free, universal primary education has been established. On the governance front, donors commend Rwanda for the improved effectiveness of its civil service and its achievements in reducing low- and mid-level corruption. Rwanda also boasts the highest number of female parliamentarians in the world. Less positively, however, there has been a decline in political freedom with authoritarian constraints imposed on independent media and opposition political parties and with irregularities in the 2003 and 2010 elections. Social cohesion remains poor 18 years after the genocide despite a prohibition on ethnic identification and an attempt to forge a national identity; ethnic grievances persist, subterranean, in both the exclusion of RPF crimes from the gacaca courts established to deal with crimes committed during the genocide and in the perceived pro-Tutsi allocation of state and para-statal jobs; and the regime faces accusations of supporting rebel groups in eastern Congo that have targeted civilians and destabilized the region.

Given Rwanda’s record, what then should an influential donor such as DFID do? There is no magic bullet for Rwanda or indeed for other countries whose records prompt this question. Instead I suggest five guiding principles to help shape donors’ thinking as they respond to offending regimes:

(i)     Think longer term—beyond the current regime of the aid recipient and beyond the current regime of their own country.

(ii)    Adapt the immediate response and longer-term engagement strategy to the distinguishing contextual characteristics of the country.

(iii)    Agree—contractually and publicly—on the principles that will govern the donor-recipient relationship ex ante, with clear redlines and defined consequences for unacceptable behaviours, and be consistent in their enforcement.

(iv)    Where possible, consult and co-ordinate with other donors on both the immediate response and the criteria for re- engagement.

(v)     Attempt to assess whether the overall direction of change within the country has been towards improving or worsening the welfare of its people.

What then is the outcome of applying these five principles to Rwanda?

First, while Rwanda’s remarkable progress is attributable to the RPF and its leadership under Paul Kagame, thinking long term means asking whether this progress could be sustained without them. Donors then should remember their relationship is with the country, and not with a particular regime or individual. While it is politically useful to be able to showcase aid successfully at work today, it can easily be undone tomorrow. Twenty-one years of donor support to President Habyarimana’s regime were tragically undermined with his assassination on 6th April 1994. Thinking long term also means discounting personal friendships between political leaders of donors and recipients (Tony Blair and Clare Short were both close to Paul Kagame for example) and resisting the usually shorter-term considerations of the donor’s foreign policy establishment.

Second, contextually, Rwanda has a highly unusual ethnic demography for sub-Saharan Africa. The country comprises only three ethnic groups and one group, the Hutu, numerically dominates the Tutsi and Twa minorities. A competitive political system where power is divided, as in a majoritarian system, rather than shared, as in a consociational system, may be inappropriate then in the wake of recent ethnic violence. To its credit, DFID does not promote democracy in Rwanda. It aims instead to improve domestic accountability.

Third, DFID’s Memorandum of Understanding in which it set out its partnership principles with the Government of Rwanda, is a very useful model for how to structure a country relationship. It is a public document setting out the agreement between the two countries on what each party will do and what happens if the agreement is broken. The agreement does, however, need to be consistently enforced.

Fourth, freezing aid would have been more effective if Rwanda’s largest donors had acted together. As it is, the UK cut budget support, the US cut only military aid, and the World Bank is still deciding what to do.

Fifth, while Rwanda’s government appears to be relatively responsive to the needs of its people, it invites speculation on its legitimacy through its authoritarian controls on political freedom. It defends these measures by claiming ethnically divisive elements persist in Rwandan politics and society. The claim has some merit. Rwanda’s political opposition and media need to show they will use any greater freedom given to them responsibly. A donor’s response then should consider the overall direction of change. Is the government incrementally liberalizing politically? I would suggest not. Are civil and political society incrementally maturing? I would argue they have not been given the opportunity. Taking all of this into account, in my view, DFID’s decision to suspend budgetary support then is warranted.

DFID, and other donors, however, have responded principally to Rwanda’s illegal and bellicose actions in eastern Congo. But should they also respond to the declining political space within Rwanda? I have argued elsewhere that the possibility of an extra-constitutional regime change is increasing within Rwanda. [1] It is not clear presently who could succeed the RPF or Paul Kagame. The independent opposition remains heavily constrained and dissenters or rivals within the RPF have fled into exile. It is also unclear how change would happen within the constitution. The RPF incumbents, silently perceived as a Tutsi party, exercise strict control over the electoral process. They fear free and fair elections would empower the Hutu majority and lead to the persecution of Rwanda’s Tutsi minority once more. At present the greatest risk of regime change is a coup from within the ruling party. The power vacuum and ensuing power struggle this would create would likely be accompanied by violence (though mass violence is unlikely). Seen through this lens, the remarkable achievements since the genocide for which donors commend Rwanda’s present government seem very fragile.

President Kagame and the RPF have accomplished much for Rwanda but they cannot be expected to rule forever. Indeed, Rwanda’s constitution mandates President Kagame to step down in August 2017 at the end of his second term. Given the risk of extra-constitutional regime change, it is in the government’s strategic self-interest to gradually transition the country to a point where power can be transferred lawfully and peacefully and where civil and political society can act as a responsible counterweight to a legitimate and responsive government. Donors should keep this endpoint in mind as they ponder whether to continue or to suspend aid.

[1] See McDoom, Omar Shahabudin (2012), ‘Rwanda’s Exit Pathway from Violence: A Strategic Assessment’. Background paper commissioned by the World Bank for the World Development report 2011. PDF external link. 

Omar Shahabudin McDoom is a Visiting Researcher, UNU-WIDER

WIDERAngle newsletter
January 2013
ISSN 1238-9544

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