In 1961, US President J F Kennedy described foreign aid as "a method by which the United States maintains a position of influence and control around the world." Equally candid, in 1968 President Richard Nixon advised fellow Americans to "remember that the main purpose of American aid is not to help other nations but to help ourselves." Four decades later – call it amnesia or American exceptionalism – US Secretary of State Hillary Clinton, addressing poor countries at the 2011 Busan aid conference, urged them to "be wary of donors who are more interested in extracting your resources than in building your capacity."
It is easy to overlook the fact that aid is above all a political project because of its associations with humanitarian assistance and development. As an adjunct of foreign policy, aid is used to secure the economic, political and military interests of donor countries. The maxim that there is no such thing as a free lunch is applicable to the context of foreign aid. Aid puts an iniquitous burden of debt on poor countries. Given the financial instability and volatility of currencies in today's globalised world, poor countries find themselves spending more and more with every passing year on debt repayment. Patrick Bond, in his book Looting Africa, writes that the debt of developing countries rose from $580 billion in 1980, to $2.4 trillion in 2002 – much of it unrepayable. The volume of overseas development aid in this year was $37 billion, but there was a net outflow of $340 billion in servicing this debt. Indeed, as economist Joseph Stiglitz has observed, "What a peculiar world, in which the poor countries are in effect subsidizing the richest…"
The Paris Declaration principles
These mounting reverse outflows coincided with a period of significant reform in the international aid community, starting in the 1980s. Global consultations, initiated at the turn of the century in Monterrey, Mexico, in 2002, and followed by meetings in Rome in 2003, Paris in 2005, Accra in 2008, and Busan in 2011 led to consensus among donors on "far reaching and monitorable actions" to reform the ways aid was delivered and managed. Questions raised at these meetings were more to do with the effective and predicable delivery of aid than its necessity in the first place. The meeting in Paris was particularly important because it led to the drafting of a roadmap for aid effectiveness – now referred to as the Paris Declaration (PD) – organised around five principles: harmonisation, ownership, alignment, managing for results and mutual accountability.
These ongoing reforms in the international aid regime form the backdrop for the discussions in Saman Kelegama's edited Foreign Aid in South Asia: The Emerging Scenario. This is an enquiry into the emerging scenario of foreign aid in contemporary Southasia. Kelegama is a Sri Lankan economist, and this book positions itself within the specific framework of the PD principles. The premise of aid effectiveness therefore underlies the majority of the book, from which emerges a country-by-country picture of Southasia's engagement with foreign aid.