Millions of dollars in aid money is sent to developing nations each year, but poverty remains a major issue. This is the alleged dilemma being studied at an international conference that got underway yesterday in Ghana. Ministers from over a hundred countries are meeting with the heads of bilateral and multilateral agencies and representatives from a handful of non-governmental organisations to debate how best to channel funds intended to pay for development work. The High Level Forum on Aid Effectiveness is a significant event for the aid industry, but it looks as though it will deliver very little in the way of positive change.

Aid is a decidedly suspicious word. It implies that whatever comes under such a name is inherently helpful, and that problems can only arise in situations in which there is not enough of it to go around.

Rich countries have long encouraged this kind of assumption. Discussions about how much they should give to their less fortunate counterparts are incredibly popular, and hardly a summit goes by without promises of more aid. But it is largely bluster. Forty years ago, the Organisation for Economic Cooperation and Development and its member states undertook to earmark at least 0.7% of their Gross National Income. They haven’t done it yet, and an awful lot of time and energy is wasted in reminding them of their pledge and working out how far they still have to go. People are thereby distracted from questioning both the choice of this arbitrary figure and the content of what is supposed to be development assistance.

Excuses abound for this seeming inability to deliver. Questions are often met by expressions of concern over the ability of developing countries to use any extra finance, worries about corruption, fears that additional money will place too great a strain on bureaucracies, and talk of developing countries having institutions plagued by inefficiency and wastage.

The High Level Forum on Aid Effectiveness is designed to address such hesitations. Donors and recipients are now contemplating ways of ensuring that funds set aside for development actually end up reducing poverty. Buzzwords are everywhere. Ownership, alignment, results-oriented management, mutual accountability and harmonisation are the key principles said to be the answer. They have been subject to discussion before, and still more assurances of progress were elicited at the time. Ghana is hosting the third of a series, following a similar assembly in Italy in February 2003 and another gathering in France in March 2005. Participants will once again evaluate how little they have managed to achieve since their last discussion and solemnly vow to improve matters within another couple of years.

An interesting book to be launched this week suggests that the whole process is merely a tactic to assist in maintaining the supremacy of rich nations. The South Centre, an inter-governmental organisation of developing countries, puts forward this idea in a volume by its Executive Director, Yash Tandon, entitled ‘Ending aid dependence’. It argues that what is really needed is a strategy for giving up on aid.

Mindset is apparently the principal barrier. Governments and public opinion in their respective constituencies often believe that they simply cannot manage without development assistance.

The South Centre proposes a fresh approach that starts from a new definition of what constitutes aid. The Organisation for Economic Cooperation and Development and its member states currently decide for themselves what is meant by the term. Aid therefore now encompasses any money from official sources given on a concessional or even slightly less than market basis to developing nations.

It is important to be clear about what is on offer. Rich countries provide a good deal of funds that have to be used on products and services from their own corporations, which often ends up being more expensive for recipients than commercial borrowing. Donors also count money spent on refugees and funds given to non-governmental organisations for educational work on relevant topics at home as part of their development assistance. Administration costs are included too. Debt relief on loans made to illegitimate regimes is another example of aid that isn’t really useful. Rich nations also direct considerable amounts of money to trying to persuade recipients to change their policies on everything from governance of the financial sector to university curricula and staffing policies, and ideology doesn’t often transfer into results in eradicating poverty. Technical assistance makes up almost half of all flows from donors, and payments to expensive consultants for advice of dubious quality on subjects of questionable utility are rife in the aid industry.

The South Centre wisely discounts all of this out of hand. It is the first stage in understanding that there are other ways of moving forward.

Developing countries must then accept that there is still work to be done on their national projects. Political independence from colonial powers was only the initial step, and further struggle is also needed to get out of the resulting asymmetrical economic, power and knowledge relationships.

The South Centre points out that there are other ways of closing the resource gap between income and expenditure. Aid is not the most important financing stream to developing countries. Remittances play a big role in many places. It is also well known that considerably greater sums of money flow back the other way in illegal private transfers, in profits from multinational companies and in legal theft of various other kinds. Leaks should be plugged before turning to aid. Budgets are often drawn up while craving plenty of things other than what is necessary for development. Plans have to focus on creating decent employment and promoting the domestic market before anything else. The South Centre elaborates on these issues to set out a number of actions to be taken in a process of weaning a country off aid.

Rich nations will undoubtedly be worried by this prospect. Brazil has recently escaped from the aid system, having adopted strongly nationally-oriented policies in the trade, investment and monetary areas. India and China never became addicted in the first place, and they made sure that their agricultural and manufacturing sectors were in a position to compete before exposing them to the international market. Look at where these states are now.

It obviously isn’t that easy. India, China and Brazil all have large populations to depend upon, so their use of specific policy measures cannot necessarily be replicated elsewhere. But other countries who are taking slightly different routes are on the verge of success too.

The High Level Forum on Aid Effectiveness is about finding a way of keeping developing countries hooked on the aid drug and therefore also under the spell of rich nations for as long as possible. Imperial projects haven’t been forgotten yet either.

Buzzwords might sound hollow, but they do have meanings as well. Harmonisation is about donors coming together to jointly support budgets rather than each funding a selection of individual projects, which only increases their collective power. Mutual accountability is a cunning way of adding to demands on recipients, for sanctions never affect the other side. Results-oriented management sounds like an administrative detail, and indeed it is hard to know what might ensue. Alignment is supposed to imply using the existing systems of organisation, procurement and so on, but it can just as easily give donors an excuse to insist that these are changed to meet their particular standards. Ownership is the gloss that is applied to make everything seem alright, as donors pretend that none of it was their idea.