The economies of international development

Don't alienate the people whose land you've come to visit or serve in! (source: kandyjaxx)

For a couple of weeks, I've been following Alanna Sheikh's excellent blog Blood and Milk. Now I may not necessarily agree with everything she says; but her posts are thought-provoking, and force learning and reflection.

Today she posted a very interesting short piece on the economies caused by international development organizations, called Dual Economies. It references another interesting article and I repeat here:

Expats clearly distort the market in the countries they inhabit. The labor market, the fancy restaurants. Distressingly often, the commercial sex workers. Chris Blattman has a nice post up on the phenomenon. He also likes to a UN report on the macroeconomic consequences of peacekeeping missions. I haven't read the report yet, but I plan to.

I have seen this as well, though I think the book that best showcased this issue well had nothing to do with international development. This was Elizabeth Gilbert's bestselling book Eat, Pray, Love. If you make it to the "Love" portion where she talks about 4 months in Bali where she had to decide between the expat community and the local Balinese (which if you were anything like me will be the day after you start reading!), you'll see how different the economies for the locals and the expats co-exist and barely mix.

Often, I've seen this as a source of annoyance...GREAT annoyance! This is for two reasons:

1. In international development, the point is for expats to mix with local cultures. If you don't mix then how will you know the people you are trying to reach?? (On a related note, maybe that's why so many programs fail!!)

2. It can culturally ruin a society.

As a child, I used to frequently visit this rural pilgrimage hub in southern India that was fairly quaint and quiet. In the past few years the place has been attracting a growing stream of international visitors, many who have bought property and are settling down there. Now when I go back to visit, I'm surprised by the economy of the place...on one hand its bustling; but the heart of the place has gone out. Thanks to the expats, property values have sky-rocketed. The number of restaurants catering to western tastebuds who cannot handle the spicy local fare has grown 20-fold, and each charges an arm-and-a-leg. The same can be said of the hotels/motels in the area. Now there are herbal spas, and godknowswhatelse. No one can afford to use or buy into this ultra economy, except for the ex-pats. To some extent, the local economy has benefited materially (particularly the beggars, who have also sky rocketed in number). But the people who are suffering most are the regular Indian visitors, who have been coming for years for spiritual benefit. They can't afford most of the facilities, and the traffic and noise of this once peaceful haven are detrimental to the soul of the place.

I've heard of other shady business stuff going on there as well- farmers being bullied out of land, drugs and other things coming into a place without the capacity to fight it off. So while the short-term gain from having this community of ex-pats in the area has been somewhat positive (it helps the local economy grow), the long-term gain has been negative.

This is just one example of the dual economies or the dueling economies, as I like to call them. I've usually been privy to the negatives of it, because I've seen great irresponsibility and it irks me (which is also why I post The White Man's Guide to Development series here). People need to be more responsible when they go into another country. Still there are positives of moves like this, as Chris and Alanna both point out.

Let me also say that there's a LARGE number of expats who are good and responsible, and might even get screwed as a result of being so good. Its the group of irresponsible ones who just make things hell for everyone, and somehow they can dominate these landscapes!!