Aftermath of World War II and the Cold War era

International relief efforts expanded rapidly in the early 20^th century, with World War I &II marking a shift towards more organized, large scale relief efforts. Thus in 1918, for example, US warships shipped 6.23 million tonnes of food aid to Europe (Hjertholm & White 2004, 5). World War II provided the basis for the further acceleration of international aid, as various organizations, such as Oxfam and CARE⁵, which originally catered for refugees of war and American relief efforts in Europe respectively; as well as the Marshall Plan through which the US provided bilateral assistance to Europe. The creation of multilateral organizations to “facilitate increased international assistance and cooperation” (Goldin & Reinert 2007, 115) and the work of the UN also

5 Centre for American Relief in Europe – later, Everywhere

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date back to this period and to the founding of the United Nations Relief and Rehabilitation Agency (UNRRA) in 1943, and of the World Bank, (otherwise known as the International Bank for Reconstruction and Development), which provided its first loan to a developing country, Colombia, in 1950. (Goldin & Reinert 2007; Hjertholm & White 2004.)

During the Cold War period which began after World War II, much of bilateral development took place in the form of ‘tied assistance’, that is, aid was “restricted to importing from the donor country” (Goldin & Reinert 2007, 115), and a main focus of development aid were those of state building, economic development and alleviating poverty, and, towards the end of the 1960s, social development (Goldin & Renert 2007; Hjertholm & White 2004). The basis of Western state-building efforts was that of modernization theory, which as Simensen (2007, 173) notes, was premised on the model of modern Western societies. A connected theory to modernization theory was the dependency theory put forth in the 1950s by the UN Economic Commission for Latin America, according to which the underdevelopment of the southern hemisphere was due to the modern world economy being structured in such a way that resources flowed towards the center, the northern hemisphere, through unequal trade and capital gains. Both theories implied a structure, which in practice was taken to mean that by making structural adjustments, it would be possible to change the whole system. (Ibid., 173.)

As the world was divided along a socialist and anti-socialist divide, much of development aid, likewise, actively propagated either a socialist or anti-socialist ideological imperative, and like the anti-socialists, the socialists also propagated their own model of structural change. This was also a period when many colonized countries fought for and gained independence, and the communist movement and the turn to international socialist revolution in many colonized countries grew out of opposition to colonial rule. The relationship, as identified by a respondent in Kiernan’s study (quoted in Clayton 2000, 63), was not as strictly hierarchial as in the centre-periphery model applied by Western countries, but one of apprenticeship: “ I was happy [the Viet Minh] had come to help. [They] talked of international consciousness [and specifically] about Khmer-Vietnamese consciousness, and I considered it reasonable.”

As compared to the development aid of western countries, that provided by the Soviet and China to communist countries was more focused on secular issues and demonstrated more sensitivity towards colonized countries seeking independence from colonial rule, and was more reflective of the situation of colonized people, translating into regional and national local/national apparatuses 25

and systems of governance that were more culturally relevant and that reflected the aims of independence from colonial rule. Thus Ho Chi Minh of Vietnam, for example, having first petitioned for autonomy from the allied forces, then turned to Soviet Union, where the response was more in line with the political sentiment for autonomy and independence:

An obscure Paris photo shop worker, Ho made his debut in world politics in 1919 by petitioning Allied powers at the Versailles peace conference to grant Vietnam autonomy. They ignored him. This left him open to the 1920 appeal of Lenin, the leader of the newly created Soviet Union, for an alliance between the European

“communist proletariat” and the Asian “revolutionary peasant movement directed against the established Western powers. (Owen et al., 2005, 340.)

Following World War II, colonial powers such as Britain and France, continued support to colonized countries. However, as described by Hjertholm and White (2004, 11), “the 1950s may be described as a decade of US hegemony, as it alone accounted for 2/3 of total aid in that decade”, and aids programmes, as they write, were used as a strategic means to “stop “countries going communist””. As the 50s wore on and in the 1960s, calls were made for other US-aligned bilaterals to participate in the burden of costs of development aid projects, marking the beginning of increased bilateral assistance to development aid. Various bilateral programs were started, with the aim of supporting the state through technical assistance which came from donor countries, and budget support, whilst multilaterals focused mainly on individual (as opposed to sector-wide) development projects. A main focus of development aid was poverty alleviation, with the 1975 US International Development and Food Assistance Act, for example, stipulating that 75% of aid should be channelled to countries where per capita income was less than 300 USD (Hjertholm & White 2004, 12; see also Goldin & Reinert 2007; Owen et al. 2005.)

In the 60’s, the non-governmental organisations of the time performed also some advisory functions related to business entrepreneurs in developing countries, and bilateral donors provided some funding for development finance institutions (DFIs) in developing countries. These were usually public agencies that provided loans – often at subsidized rates – to private enterprises. This initiative is broadly considered to have been failure, as DFI loans commonly failed to reach those that were their intended beneficiaries, and thus had little impact on the development of financial markets. Instead, the loans wound up in the hands of large enterprises and powerful individuals, and

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few DFI’s achieved financial sustainability as they failed to mobilize local savings and their borrowers often did not repay the loans. (Hjertholm & White 2004; Leaong, (Ed.) 2005.)

The ambition of aid provided by communist super powers, the Soviet Union and China, likewise had an ideological agenda, that of transforming society in its entirety, not through replacing, but through re-educating the entire population. This was a considerably operation, which is often overlooked in analyses of development aid that have the tendency to focus on the aid of western, liberal democracies. The results, approached from a numerical level, were, in part, impressive, with illiteracy rates, for example, dropping significantly (Clayton 2000; Owen et al. 2005).

In summary, a common feature of economic development strategies of both anti-communist and communist regimes that was adopted in the majority of developing countries following the Second World War, in addition to the use of aid “as a means to support friendly states” (Goldin & Reinert 2007, 119) was that these focused on the central role of the state in planning and administering reform. As the Cold War continued, development aid maintained a sharp division, with the

‘Western bloc’ maintaining an anti-communist agenda, and the ‘Eastern bloc’ aligning itself with the global expansionist ideology of the socialist regime. (Acharya 2000; Goldin & Reinert 2007;

Hjertholm & White 2004.)