'Promoting Development Is a Risky Business’ - Interview with John Sewell
FrontLines - April 2010
John Sewell is an expert on foreign assistance and founder of the Overseas Development Council, a
think tank in Washington, D.C. He was recently interviewed by FrontLines Editorial Director Ben Barber.
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John Sewell
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Q: Foreign assistance has had
major achievements over the
past 50 years. What are some
examples?
SEWELL: There have been
many but off the top of my
head I can think of three. First,
the Green Revolution where the
combined efforts of American
aid and private foundations revolutionized
agriculture in Asia.
As a result, many more people
lived a much longer time. Second,
the efforts put into improving
education, particularly of
women and girls. The third is
population growth. When I
started working on development,
the best predictions said
that global population would
rise to over 20 billion at the end
of the 20th century. Now we
know it will not go much above
9 billion and perhaps lower.
That wouldn’t have happened
without American leadership
and funding.
Q: What are the major failures
of foreign assistance?
SEWELL: Failures have
occurred either because countries
were not committed to
development, or because aid
agencies designed ineffective
programs. But most major failures
came about because aid
was provided for political reasons—
for Cold War purposes
in Southeast Asia or the Middle
East, not for economic and
social development. And we
should remember that promoting
development is a risky
business. If there were no failures,
development agencies
were being too cautious.
But the more important failures
are at the strategic level.
Assistance really is only effective
when governments and
leaders want to speed economic
growth, improve health
and education, and address
poverty. When the government
isn’t committed to development,
a lot of aid is wasted.
That’s why the choice of
countries is so important.
Korea is one example. Korean
leaders knew how to use
foreign aid effectively to build
agriculture and industry. Part of
that assistance funded investments
in health and education.
We all know the result.
Egypt, on the other hand,
also has received large amounts
of American assistance since
1979. But its growth rates are
low and they still have one of
the highest rates of adult illiteracy
in the world.
Perhaps the largest failure has
been in Africa. Except for a
small number of countries,
Africa lags far behind other
regions. The blame lies not just
with African leaders but also
with aid donors who have continued
to provide assistance in
ways that hinder development.
Q: In what ways can global poverty
be reduced quickly in the
next three to four years?
SEWELL: In the short term, it
won’t happen. The global financial
crisis makes that a certainty.
The best estimates are that up to
90 million people will fall back
into poverty because they will
have lost jobs and livelihoods.
The most important thing the
U.S. can do in the near term is to
continue to lead the reform of the
international financial systems
that are essential to restarting
global economic growth, particularly
in the developing world.
Q: That’s the way to reduce
poverty?
SEWELL: In the short term,
yes. But the U.S. can target aid
to build poor peoples’ capacities
and can make a great difference.
That means aid for education,
especially women, and to enable
poor people to improve their
health. And jobs are critical.
I think the right goal is to
empower people to move into
the middle class.
That means helping to provide
technical assistance and in making
low-cost credits for both
farmers and small scale entrepreneurs.
They will be the generators
of jobs that enable men and
women to move out of poverty.
Q: Why do you say in one
of your papers that economic
growth alone will not eliminate
poverty?
SEWELL: Because it’s true.
Growth does not automatically
diminish poverty; it has to be
complemented by government
actions to share the gains from
growth by investing in better
health and education. For this
you also need a competent state.
That’s how the East Asian countries
managed to develop so successfully.
On the other hand,
many Latin American countries
have grown at decent rates but
have lousy income distribution.
But now countries like Brazil are
starting to change. For instance,
the Brazilian government now
pays mothers to keep their children
in school where they can get
education and health care.
Q: USAID has restrictions that
inhibit advertising. How can the
public and Congress be informed
about the successes and importance
of development assistance?
SEWELL: USAID has been
very timid about educating the
public and Congress. I am not
even sure that the earlier successful
programs of development
education exist anymore.
Some steps are easy.
USAID staff knows a lot about
development. Why not send them
out to talk to public groups around
the country? USAID staff doesn’t
even participate actively in the
yeasty dialogue on development
that goes on in the Washington
policy community and they
should be encouraged to do so.
Other changes may require funding
and perhaps legislation and
the administration should work
with the Congress to get them.
Informing the public is particularly
important now when
there are two major processes
underway to modernize U.S.
development programs and Congress
is rewriting the development
assistance legislation.
Q: Since China and Vietnam have
both developed without democracy,
how important is it to push
for democracy and good governance?
Are they really necessary?
SEWELL: We need to separate
democracy and governance. Very
few of the successful developing
countries have started out as
democracies; India is the big
exception. On the other hand, all
of the successful countries have
had effective governments to do
what governments should do:
provide security and public
goods like health and education,
establish the rule of law, and
encourage entrepreneurship.
We need to face the fact that
no outsider, including the U.S.,
can “democratize” a country. But
it can play an important role in
helping to improve governance
in committed poor countries.
And one of the important parts
of successful development is
what a Harvard economist calls
“conflict mediating institutions”
that allow people to deal with
the inevitable conflicts that arise
within successful development.
Q: You have said that we need
to make markets work. How can
we help poor people begin to
trade when Europe, Japan, and
the United States either block
imports or subsidize exports?
SEWELL: If you are serious
about development, you have to
give high priority to trade policy.
Unfortunately, USAID
seems to have very little voice
in trade decisions.
The U.S. needs to focus its
development trade policy on the
poorest countries. The highest
priority should be dropping the
remaining subsidies for U.S.
production of highly subsidized
agricultural products like cotton
that can be produced very competitively
in very poor countries.
But many of these countries
have difficulty selling goods in
the U.S., not only because of subsidies,
but also because they are
not equipped to export. Transport
costs are high as are the costs of
meeting U.S. health and quality
standards, and knowledge of
marketing in America is scarce.
Here’s where USAID can
play an important complementary
role. U.S. companies are
already providing technical
assistance, some with USAID
support. But USAID can
expand its trade capacity
building programs and focus
them on the poorer countries.
Q: What about microcredit?
SEWELL: Microcredit is a
very important innovation,
especially for empowering
poor people, particularly poor
women. It’s part of the solution
to ending poverty.
But there are other needs. In
most poor countries, there are
large groups of poor entrepreneurs
who are not poor enough
to get microcredit but who can’t
get commercial banks to lend to
them. These are people who
produce products for sale—
handbags, for instance—that
employ 10 to 20 people, but
they need capital and advice in
order to grow. In the U.S.,
small businessmen used to borrow
money from local banks.That’s how America grew. But
similar institutions don’t exist
in many poor countries.
Q: We are involved in so many
different programs—20 or 30
different federal agencies do
some sort of foreign assistance—
why not just invest in
education and health and let
each country figure out what
their own development plan
should be?
SEWELL: A very good idea. I
have long advocated that the
U.S. should focus its programs
on a few major development
issues but I would go beyond
just health and education. I add
climate change and dealing with
global health threats. We dodged
the bullet on SARS [severe acute
respiratory syndrome] and avian
flu but we may not be so lucky
in the future. And strengthening
governance and strengthening
weak states is essential.
The real need now is for
some mechanism that oversees
and coordinates the multiplicity
of agencies that have programs
and expertise on these critical
issues. Let’s hope that emerges
from the current administration’s
reviews of development policy
★
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