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EDITORIAL

Development Aid: What If We Need to Re-Think the Concept?

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The COVID-19 crisis has increased the feeling of interdependence across the world. Taken together with climate issues raised by the global community at the COP26, the notion of “community of destiny” is supposed to have never been so intense.

However, at the time of calls for collective responsibility and solidarity, the distribution of vaccines has showed crucial inequalities, which questions the philanthropy of states. A failure according to a constructivist approach or an unsurprising scenario for realists.

Looking at this situation through an academic lens leads us to the concept of official development assistance (ODA). This somehow refers to the idea of “state philanthropy”, which is, of course, and without being naïve, not detached from each state’s global influence policy. Assistance is not free, either for donors or for recipients.

The concept originally comes from the Marshall Plan’s idea to re-build Europe in the wake of World War II. It has afterwards continued towards the poorest countries in the world.

Western approach to development

Western nations, represented by the OECD in the field of development assistance, assume a human rights-based approach to development. Primarily, economic development increases social mobilisation, which will then favour democratisation and human rights promotion. This systematic way of thinking development represents how most people in Western countries understand the ultimate aim and sense of development assistance. Therefore, the relationship with repudiated regimes focuses on aid rather than constructive and natural trade based on shared values. Therefore, it actually doesn’t prevent ODA to be spent in the poorest countries, also called “fragile” and sometimes “rogue” states, because of their institutional instability.

However, the development of democracy and the promotion of human rights through economic development is challenged by other development approaches. Nowadays, there are so-called “autocratic” regimes that have great conditions for sustainable economic development and growth of power in the world order. Examples include China or Singapore. Conceptually, we cannot extrapolate these cases by a special affiliation to “Asia”. They are contemporary testimonies that nuance modern theories of economic development through democratisation, which should then promote human rights as the modern Western history is presented.

Institutional capacity is one of the other approaches to development. A country must have strong and well-designed institutions to contain sustainable economic development. This capacity includes the effectiveness of decision making, accountability and the competence of institutions to lead the group.

Yet, the third approach views development through competition and bargaining between elites. Elites must reconcile to enable the group to develop as a whole. This raises the question of development in countries weakened by multi-ethnic conflicts.

These dynamics of development are parallel to the other four main theories whose angle is different: modernisation, dependency, world-systems, and globalisation. In every case, they are simply corresponding to the manner how development is heard in Western societies. Thus, foreign aid policies assume that development corresponds to the above-mentioned theories, which does not mean that it is suitable for all cultures or regions of the world, as some part of the research has pointed out. However, what if, when designing foreign aid policies, development was considered a subjective and biased notion?

Comprehensive approach: assistance shall first assume that development is not a fixed concept

Assistance as understood by the OECD must take into account other development models. However, the current problem is that the measurement grid considers criteria of social, human and cultural norms that are additional to the measurement of material development only. These additional criteria are seen as complementing the material approach. These include, for example, inclusive finance, gender equality or other struggles that some aid recipient countries are not particularly ready or willing to experience.

However, in this model, the relationship between the project parties and the beneficiary is fragile when the values promoted are not shared. The continuity of investments is therefore very limited. Rhetorically, this does not mean that a state needs to extend its values to be successful. This is often the mistake, as values-based businesses can be disrupted by regime changes, the cost of which can become enormous. Therefore, taking into account political alternations and the personalization of foreign relations by each government: an appropriate positioning on a long-term perspective must be based on humility beyond national borders. This assumption in international politics is equivalent to a wait-and-see attitude and pragmatic observation on development issues.

Nowadays, Chinese model vs. Western one

China invests massively in long-term projects, using debt as a leverage for long-term accountability and project-monitoring. Additionally, the Chinese development assistance doctrine insists on a few principles, including the unconditionality of its aid, particularly the influence over the rules. A decade ago, this approach was perceived as a “silent revolution” and it’s become of public notoriety nowadays. The Chinese pledge to contribute to an investment and trade relationship, as opposed to assistance in dealing with injustice. However, of course, when debt repayment becomes difficult, it can become a tool to take control of the strategic sector, a tool used by China, as we have already seen with the Hambantota International Port in Sri Lanka. There may be a gradual material takeover, but China does not directly interfere with values and rules, whereas these should be changed according to Western OECD-based communication. This differentiation of the Chinese approach is a mark of confidence for the counterpart.

In terms of global positioning, China is clear. None of its white papers speak of allies, but partners. Quoting one of them: “history shows that the pursuit of hegemony, alliance and confrontation and the abuse of power in international relations will induce chaos or even war.

Metaphorical comparison with giving coins to a tramp

Most of us are marked every time we see a beggar on the street. When we give, it is either because our heart calls us to do so in a powerful and free-way, or because we trust the beggar’s ability to use the money.

When we don’t give, it is somehow a sign of a lack of desperation in the ability to use a gift well (or simply of greed, of course), and we don’t try – or manage – to understand the functioning of the person in front of us.

The situation that often arises is conditional giving, with the argument that we want to be sure that our coin will be used in a virtuous way. For example, by saying: “You won’t buy alcohol with it, promise? Taking the coin anyway, he may answer “yes, I’ll do some good” to put on a brave face, but in almost all cases he will be upset by this remark. And it is likely that he will ingest this frustration by thwarting the donor’s intended use of the coin.

In this case, the bad outcome is mainly based on the hypocrisy of the donor who in fact does not give unconditionally, which then generates the frustration of the receiver and his irresponsibility.

The method used by development aid can have some of the same effects. Even if states considered ‘rogue’ are enthusiastically helped by activist countries, the feeling that the other wants to change the rules can have the counterproductive effect of rejecting them.

On the other side, Western countries work through an alliance-based model that is reflected in its development assistance policy, whose effects may be questioned.

Conversely, for private sector actors in countries in political conflict, there is often a kind of ‘reward’ for trust, proportional to the risk taken. The case of Total in Russia is a good example. Its projects show very high rates of return. Another broader picture that should be considered is the Belt and Road Initiative, whose development, based on investment rather than aid, is an example (see The Belt and Road Initiative: Towards a New World Order).

The ambiguity of foreign aid: an alternative way of influencing states with non-shared values and without a sustainable institutional relay

Continuing with the ambiguity of foreign aid, its material and reputational returns lead to a rethinking of the coherence between the official intention and the predictable effects. The question “Are we really helping others or just ourselves?” is central.

The promotion of foreign aid is often based on what each nation is and thinks it is. The OECD’s current approach is mainly to seek a global mirror of Western values, ideals and principles. In this logic, when they cannot be found, an aid relationship is established. However, this approach is analogous to the metaphor of giving a coin to a tramp, and poor countries are not tramps.

International interventionism often risks an infantilizing logic

Most commentary and research assume that it is the responsibility of the ‘rich’ to develop the ‘poor’, especially when commenting—in good faith—inequalities in inflows and outflows between rich and poor countries. When was the last time we heard anything positive from the least-developed countries? Although development assistance is tailored to each ecosystem, there is a clear focus on disability rather than capacity, which encourages migration. This approach is contradictory with the idea that each state is sovereign and responsible. Thus, there is an urgent need to defend local capacities and encourage the localism of human capital.

The issue of national responsibility must be taken into consideration. However, some elites obviously have no interest in encouraging this view when they are not themselves responsible. In this case, cooperation with the private sector and civil societies is to be preferred.

Hypothesis: development aid to pre-empt an unfavourable position vis-à-vis developing countries

Finally, it looks like ODA is a way to slight the transformation of world order that demographic dynamics announce nowadays. A way to prepare the next page is to harmonise cultures and prospects of future powers to better bargaining. This bargaining, for former colonial powers, is mainly concentrated around former colonies, as shown by the correlation between ODA volume and former colonies (for instance, see the map of ODA flows to the Arab Middle East and North Africa or Development Assistance As Leverage for Russia’s Footprint in Kyrgyzstan and Tajikistan).

While this is where donors find the most accessible added value, it is also a signal of weakness and limitation of ODA, that remains geographically in the channels of influence of each donor country. For instance, priority countries of the French ODA include Senegal, Ethiopia, Mali and Burkina Faso. Three of these are former French colonies. In its form, ODA is a useful official means of smoothing out future competition between emerging states and dominant states. In substance, it reflects unfavourable trends.

Key values needed in foreign aid policies: humility, prudence and resilience

The following recommendations can be addressed to policy-makers and development aid agencies:

1. Accept the accessibility of development through other ways than the national experience.

2. Acknowledge the cultural or community bias that affects the success of projects, and integrate it into the assistance strategy, not taking it as a risk but rather seeing where it can be leveraged.

3. Be very careful about aid that risks dividing competing communities whose common enemy is potentially the donor country. The ultimate risk is to open up opportunities for hostile rapprochement against the donor country accused of excessive profit and interference.

4. Prioritise the private sector and its metamorphic character to play on interdependence.

5. Use public-private partnerships to interweave strategic projects with economic realism.

6. Use transactional analysis (psychology-based) to put assistance to developing countries and post-colonial treatment into perspective. The damage caused by asymmetries of intent will be alleviated.

 


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EDITORIAL

Celebrating a Decade of Resilience and Impact: Our Journey in Fostering Islamic Economics in Africa

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On the 13th of December, 2023, the Africa Islamic Economic Foundation (AFRIEF), clocked ten years as an organization. Surviving as an organization in itself speaks volumes about our strength, resilience, determination, and adaptability. Despite facing various challenges, we have remained steadfast in our commitment to promoting Islamic economic principles and sharing news and developments in the Islamic economy.

Against all odds, we have continued to actively engage with the Islamic economy community, fostering connections, promoting dialogue, and contributing to the intellectual growth of the field. This accomplishment is a testament to our vision, perseverance, and commitment to its mission.

Over the past decade, we have successfully established a presence and created a platform for dialogue across the continent. Through conferences, seminars, and workshops, we have brought together scholars, experts, and stakeholders from various African countries to exchange ideas, share experiences, and promote a better understanding of Islamic economic principles.

We have been instrumental in advancing research and scholarship in the field of Islamic economics. Through rigorous academic studies and publications, we have contributed to the body of knowledge surrounding Islamic economics, addressing both the theoretical and practical aspects. These research publications have not only enhanced understanding but also provided valuable insights for policymakers and practitioners.

Last November, we held a virtual and impersonal Summits on Islamic finance and healthcare financing in Abuja, Nigeria. These summits are not only innovative and noteworthy achievements but demonstrate our commitment to exploring new avenues within Islamic economics to addressing critical sectors, such as finance and healthcare. What is more, these summits serve as a testament to our forward-thinking approach and commitment to driving positive change in crucial sectors. Through such innovative initiatives, we have established ourselves as key players in promoting Islamic economics, influencing policy discussions, and contributing to the sustainable development of Africa

The publication of the news website and the weekly e-newsletter, “Focus on the Islamic Economy,” is another testament to our dedication to disseminating valuable information to Islamic economy intellectuals and professionals worldwide. Through quality and unbiased journalism we have been able to establish a platform for knowledge-sharing and keeping the community updated, thus becoming a trusted source of insights, trends, and advancements in the field.

Recognizing the importance of education, we have prioritized capacity building initiatives like training programs, workshops, and online courses, and empowered individuals with the knowledge and skills necessary to navigate the intersection of Islamic principles and economic practices. This has resulted in a growing pool of professionals equipped to contribute to the development of Africa’s Islamic economic sector.

We have also played a vital role in fostering entrepreneurship and economic development within Africa, through our flagship initiatives, Innovate Africa Program (IAP) and the Halal Business Transformation Program (HBTP). This support for innovative business ideas and providing access to funding, mentorship, and networks, is nurturing a thriving ecosystem of Islamic-inspired entrepreneurs and ventures in the Continent. These initiatives have not only contributed to economic growth but also emphasized ethical business practices aligned with Islamic values.

As we celebrate our  tenth year anniversary, it is an opportune moment to reflect on the remarkable journey of survival and the positive impact we have made in the Islamic economics landscape in Africa and beyond. May the coming years bring even greater achievements and continued success to the Africa Islamic Economic Foundation.


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EDITORIAL

COP OUT

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The world’s leaders are not coming to save us. That was the message in brilliant technicolor from the 28th COP meeting that concluded in Dubai about a fortnight ago.

Yes, COP28 was a catastrophic failure, but that failure is not down to the individual frailties of the negotiators present. It was preordained. COP can’t work while the global balance of forces remain as they are.

With no mechanism to force the rich countries of the North to pay to support the South to both adapt to climate change and for the loss and damage they suffer from climate breakdown, targets for finance and technology transfers will never be met. That’s why the global commitment to raise $100 billion per year for climate finance is pushed back every year and the much touted Loss and Damage fund, which is projected to need over $200 billion per year by 2030, has amassed only $700 million in commitments – not even hard cash. The US pledged just $17 million to the fund. Compare that with the $14 billion of weaponry for Israel to pursue its campaign of murder and destruction in Gaza.

$100 billion dollars sounds like a lot of money – and it would be for Southern states adapting to the worst impacts of climate breakdown – but it is just around one tenth of one percent of global economic output. But COP’s biggest structural flaw isn’t even the stingy hypocrisy of the Global North. It’s the overweening power of Big Oil in the global system.

This dominance was on full display in Dubai, giving satire its second death after Henry Kissinger’s Nobel Prize. The conference was presided over by the CEO of an oil company and was lousy with fossil fuel lobbyists, whose number quadrupled to 2,400, making them the largest delegation by far.

So it should come as no shock that COP28, like all previous COPs before it failed to agree on the need to phase out fossil fuels and to set a deadline for doing so. Instead, the final document suggests that states may – with no obligations – “draw down” fossil fuel production. The demands from over 120 countries to completely eliminate new fossil fuel production were ignored.

Climate breakdown cannot be averted without addressing the first order issue: fossil fuels power our global system. That has to change. Increasing investment in cleaner energy sources alone won’t do the job. COP28 agreed on tripling renewable energy capacity by 2030, but, as we’ve seen with the policies of Joe Biden, President of the world’s biggest oil producer, expanding clean energy investment is compatible with expanding fossil fuel investment.

Investment in fossil fuels continues to soar because it is profitable and we live under capitalism. As we have seen in the past two years, rising prices have meant bumper profits and therefore increased investment in fossil fuels. While rising interest rates puts downward pressure on renewables investment, which is much more capital intensive at the front end.

The world system as it is won’t save us, but rather condemns us to live on a planet that becomes less and less hospitable to human life as we know it. 2023 has been a year of catastrophic extreme weather, from monster heatwaves in Europe to a flooding emergency in Libya and a continental inferno in Canada. January to October was 1.43 degrees above pre-industrial average. Next year will be worse, breaking new records as El Niño accelerates global heating to above 1.5°C, a threshold that risks setting off a cascade of irreversible tipping points.

Next year’s COP 29 will be held in another oil-producing state with no interest in ending fossil fuels, Azerbaijan. This is the dilemma: humanity is trapped in an overheating train helmed by fossil capitalists structurally obliged to fan the flames. Our task is to unite and organise the social forces that can seize the engine room and pull the emergency brake. No more cop-outs.


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EDITORIAL

Tribute to Prof Dr. Syed Khalid Rashid

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We dedicate this week’s editorial to celebrate the life and legacy of our brother and friend, Prof Dr. Syed Khalid Rashid, a renowned academic and expert in Islamic law, who passed away on December 15, leaving behind a remarkable legacy of scholarship and contributions to the field of waqf development.

With a heavy heart, we bid farewell to a true visionary, scholar, and mentor. Prof Rashid was a beacon of knowledge, dedicating his life to the pursuit of learning and the sharing of wisdom. His passion for education was unparalleled, inspiring countless students to embrace their curiosity and immerse themselves in the pursuit of knowledge. His contributions to his field were immense, leaving an indelible impact on the academic community.

Professor Rashid was a prolific writer and researcher, authoring several books and articles on Islamic law and Waqf. His most notable works include “Waqf (Laws and Administration)” and “Muslim Law,” which are considered essential references for scholars and practitioners in the field.

Professor Rashid’s work on waqf is particularly significant in light of the growing importance of waqf as a tool for social and economic development in Muslim societies. waqf has been used to fund a wide range of projects, including mosques, schools, hospitals, and other charitable institutions. Professor Rashid’s scholarship has helped to provide a sound legal framework for the establishment and administration of waqf, ensuring that these charitable endowments are used effectively and in accordance with Islamic law.

In addition to his academic contributions, Professor Rashid also played an active role in waqf development through his involvement in various waqf organizations and initiatives. He served as a member of the board of directors of several waqf foundations and was a frequent speaker at conferences and workshops on waqf. It is significant to mention that the Africa Islamic Economic Foundation (AFRIEF) missed him debuting our monthly colloquium.

Through his groundbreaking research, Prof Rashid opened new avenues of understanding, pushing the boundaries of knowledge and fostering innovation. Beyond his professional accomplishments, Prof Rashid touched the lives of those around him with his kindness, compassion, and unwavering support. Most of us, including his students and colleagues would remember him as a mentor who nurtured our potential and encouraged us to reach for the stars.

Prof Rashid’s legacy lives on through the countless minds he shaped, the research he conducted, and the knowledge he imparted. He was a pillar of wisdom and a true inspiration to all who had the privilege to learn from him.

Today, as we bid farewell to Prof Sayed Khalid Rashid, let us not mourn his loss, but instead celebrate the incredible life he lived. May his memory serve as a constant reminder to embrace knowledge, nurture curiosity, and always strive for excellence.  Prof Syed Khalid Rashid, though you have passed on to the glorious life of eternity, your contributions to knowledge will forever be cherished, and your light will continue to guide future generations. May Allah SWT grant him Aljannat ul Firdaus.


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