Barack Obama sent the message that “Development isn’t charity” when he signed off on the 2016 Global Food Security Act. It was accompanied by the sentiment that should the international community invest in a developing nation, they may see a return on their investment.
On April 10, less than a decade after graduating from being a recipient of the World Bank’s IDA fund, Armenia became an official contributor. Bringing with it a $1 million paid-in contribution, Armenia’s development is a foreign aid success story worth knowing about.
Armenia’s Humanitarian Crisis
Prior to IDA funding in 1993, Armenia’s humanitarian situation was grave. Newly independent and grappling with soaring inflation, Armenia was suffering from an acute food and energy shortage. On top of this, the war over the disputed region of Nagorno-Karabakh put a major drain on resources, disrupted trade routes and occupied government attention. Armenians found themselves displaced, unemployed and without their basic needs met when the IDA offered its assistance — the precedence for foreign aid was clear.
The Impact of Global Emergencies
In spite of Armenia’s progressive development, aid as an international priority has taken a backseat. A deluge of global crises, from the COVID-19 pandemic to rising energy prices, has led governments to rethink their aid commitments. The U.K. government, for example, has reduced its pledge to spend 0.7% of its gross national income on Official Development Assistance. The new aim is 0.5% as a “temporary measure,” and the 0.7% U.N. recommendation has no set date for reimplementation. The abstract promise of a return “when the fiscal situation allows” is the only suggestion of intent.
The COVID-19 pandemic laid bare that aid is the first thing to leave a country’s agenda when the going gets tough. Cuts to foreign aid budgets without warning seem to stem from aid being perceived as mere philanthropy by states and citizens alike.
Armenia’s foreign aid success suggests otherwise. It has brought Obama’s “invest now, benefit later” mentality to fruition and illuminates the mutual benefit of aid for all to see. Armenia’s development has brought improvements to health care, the market and international relations. Here is information about Armenia’s foreign aid success.
1. Improvements in Health Care
Statistics that the World Bank published show clear improvements in the overall health of the Armenian population. In 2000, Armenia’s life expectancy at birth was 71 years. As of 2019, Armenia’s life expectancy has improved to 75 years.
A look at rates of survival in children tells a similarly positive story. Armenia’s infant mortality rate was 27 per 1,000 live births in 2000. By 2020, this figure had reduced to just 10 per 1,000.
Of course, one cannot wholly attribute improvements in Armenian health to foreign aid. However, World Bank and IDA payments to Armenia since membership total $2.6 billion, spanning 78 projects. One should not understate the positive impact of humanitarian work on today’s narrative.
2. Expanding the Consumer Market
Ricardo Michel, Director of the Center for Transformational Partnerships at USAID, explained that increasing the number of consumers spurs economic growth both domestically and overseas. This theory is tried and tested; 11 of the U.S.’s top 15 trading partners have received U.S. aid. When faced with the reality that only 5% of the world’s consumers live in the U.S., investing in foreign aid enables U.S. companies valuable access to an expanded consumer market. By this logic, Armenians are stimulating economic growth at home and abroad as a result of past aid from the IDA.
3. Strengthening International Ties
Representatives of the World Bank have emphasized the significance of foreign aid to Armenia in strengthening multilateral ties with the international community. Akihiko Nishio and Antonella Bassani, Vice Presidents at the World Bank, welcomed Armenia as a new donor in April, stressing that “the world is in dire need of international solidarity.” With crises coming thick and fast, foreign aid builds the bonds required for global responses and subsequent recoveries — ones that leave no nation behind.
As the world watches Armenia repay the international community for its assistance, it becomes clear that foreign aid does not need to come from a place of philanthropy, but actually functions as an economic investment for developed countries.
– Imogen Townsend