8.11B - Aid and Equality
In some states that receive substantial development aid, economic inequalities have increased, while in other states economic inequalities have decreased; this in turn impacts on health and life expectancy.
Development aid, often combined with intervention that attempts to manage epidemics, natural disasters or conflict, should reduce economic inequality and improve people's lives.
Economic inequality is often measured with the Gini coefficient. This quantifies the share of GDP going to different quintiles of the population, e.g. the poorest 20% or the richest 20%.
How HDI changed between 1990 and 2015 for Haiti, Ghana, Vietnam and Iraq
- Haiti's improvement is small and slow
- 1990: 0.409, 54.6 years
- 2017: 0.498, 63.1 years (+16%)
- Ghana's HDI increased significantly after 2000: this is partially due to increased development aid flowing to Ghana within the UN Millennium Goal framework. Since 2004 Ghana has received $1.1-1.8 billion in aid each year.
- !990: 0.455, 56.8 years,
- 2017:0.592, 61.5 years (+8%)
- Vietnam has made the fastest, steadiest progress: this is the result of foreign investment by TNCs as Vietnam globalises and copies the Chinese model of manufacturing exports.
- 1990: 0.475, 70.5
- 2017: 0.694, 75.9 (+8%)
- Iraq, subject to huge foreign military intervention since 1990 and over $50 billion in aid between 2004 and 2008, has made the life expectancy. Since 2012, HDI trends have reversed because of the ongoing civil war.
- 1990: 0.572, 66.2 years
- 2017: 0.685, 69.6years (+5%)
All four countries have reported increases in life expectancy since 1990. Iraq has had the least progress, as a result of conflict, invasions, terrorism and the brutal rule of Saddam Hussein prior to 2003. Perhaps surprisingly, Haiti has made the most progress in life expectancy. However, this was from a low starting point: aid has improved health outcomes but this has often not translated into wider social and economic opportunities.
Income Inequality
Haiti
- richest 20% - 47.1%
- poorest 20% - 5.5%
Ghana
- richest 20% - 48.8% GDP
- poorest 20% - 5.4% GDP
Vietnam
- richest 20% - 42.4% GDP
- poorest 20% - 7.1% GDP
Both Haiti and Ghana have very unequal income distributions, which close to half the country's wealth in the hands of the richest 20%. This suggests that development progress may be benefiting the wealthy more than the poor. In Vietnam, income inequality is lower, perhaps because the low-skilled jobs that globalisation has created are accessible to the poor.