The more traditional method of helping out poor countries has been through aid. However the term aid implies charity whereas it is fairer to consider any transfer of funds back to low-income countries as compensation. Many of the problems in low-income countries can be attributed to the actions of more prosperous countries, first as colonisers and more recently as controllers of the international monetary system and international trade. The British aid agency Oxfam says that there are seven causes of poverty in low-income countries: conflict, environmental damage, corrupt government, the debt crisis, unfair trade, inadequate aid and the insatiable consumerism of the developed world (Green Magazine, April 1992, p. 18). More prosperous countries are largely responsible for these problems. They are sometimes even responsible for corrupt governments, because they provide military and other backing to unpopular leaders who have not been democratically elected.

It seems that people in high-income countries benefit far more from the productive activity in low-income countries than these producers do themselves. For example, only 10 to 15 per cent of the profits from the tropical hardwood timber trade is kept by the low-income countries where the timber is logged; yet most of the environmental costs are borne by those countries (Green Magazine, April 1992, p. 18).

The Brundtland Report stated that:

"Perceived needs are socially and culturally determined, and sustainable development requires the promotion of values that encourage consumption standards that are within the bounds of the ecologically possible and to which all can reasonably aspire." (World Commission on Environment and Development 1990, p. 88)

The question is, can the lifestyles that are enjoyed in wealthy countries, which depend so heavily on resources from low-income countries, be enjoyed by everyone? If not, this inequitable use of resources does not meet the equity criterion for sustainable development, and the consumption in affluent countries is immoral.

David Pearce and his colleagues have pointed out that 'it is perfectly possible for a single nation to secure a sustainable development path … but at the cost of non-sustainability in another country' (Pearce, Markandya & Barbier 1989, p. 45). In other words, a country can preserve its own environment and affluent lifestyle by importing timber and goods that are produced by hazardous or wasteful processes in other countries. By these means, the environmental costs of its consumption are external to the importing country. Pearce and his colleagues argue that a country that is obviously importing sustainability in this way should compensate the countries it acquires its goods from; they suggest foreign aid as one way of accomplishing this. They assume that the exporting countries can use the compensation to create substitutes for their lost resources and environmental amenity.

Robert Stensholt, assistant director-general of AIDAB, holds a similar view. He argued at a Royal Australian Institute of Public Administration conference on ESD in Canberra (9 December 1991) that Australia can compensate developing countries for using their natural resources by ensuring that the prices we pay for these resources cover environmental costs, or by providing aid to them.

Australia gives financial and other assistance to low-income countries as part of its international obligations to development co-operation through AIDAB. In 1989, the OECD's development assistance committee agreed that environmental sustainability would be one of their central objectives for the 1990s; its members, including Australia, have agreed to adopt an ecological approach to development aid. New environmental procedures adopted by many countries include a complete environmental assessment of projects and programs that are likely to have a significant environmental impact, reduction of possible negative impacts, and monitoring provisions for later impacts.

AIDAB does not agree that human-made capital can automatically be assumed to be a substitute for natural capital, such as biological diversity, freshwater supplies, productive soils, etc. AIDAB (1990, p. 11) has therefore decided that development assistance will be guided by the following principles:

• decisions should be made with the full participation of those people most affected by the development process;
• renewable resources should be managed on a sustainable basis;
• benefits from the exploitation of resources should be distributed equitably;
• the exploitation of non-renewable resources should provide long term benefits to the general community and future generations, and should not prejudice significantly the use of related renewable resources;
• provision should be made for the rehabilitation of the areas affected by the exploitation of resources;
• conservation of biological diversity should be pursued through in-situ conservation (that is, natural habitats and ecosystems)...
• the health of communities and of workers, should be protected by standards recommended by the World Health Organisation.

As was noted previously, the amount of money flowing into low-income countries as a result of development assistance and aid is far lower than the amount flowing out in debt repayments. According to Chee Yoke Ling, about $US200 billion a year is currently flowing from poor to rich countries, while the amount going back in aid is about $US50 billion a year. Maneka Gandhi, formerly India's Minister for the Environment, has pointed out that the annual aid budget of western countries is about one-third of 1 per cent of their national incomes. Only part of this goes to the poorest countries. For example, she claims that only 8 per cent of US aid is used for development assistance in poor countries. She argues that, even so, this money

"serves the strategic, economic, political and military interests of the West. It is used effectively for getting cheap imports from the Third World made through over-exploitation of their natural resources and their cheap labour and to export to them irrelevant goods." (1991, p. 30)

She says that aid is only given to countries that have natural resources that are required in the west. Other countries miss out, meaning that to the 'least developed countries go only 2 per cent of all investments' (p. 3). An example of what Gandhi is talking about is mining. High-income countries are now looking beyond their own borders for new sources of minerals. They are even encouraging organisations such as the World Bank to finance mining projects in low-income countries to ensure that their needs can be met. The minerals produced by these projects are mostly sold to high-income countries for very low prices&emdash;prices which neither reflect the heavy environmental impacts that the mining has caused, nor the social and health impacts on the workers (Young 1992, pp. 104, 112).

Both Maneka Gandhi and Chee Yoke Ling argue that the aid given is seldom freely given; rather, it is in the form of loans that have to be paid back or it is given on the condition that it is used to buy technology, materials and equipment from the donor countries. This means that a lot of the money returns to the donor countries. In effect, in some cases it is little more than a taxpayer-funded subsidy to companies from high-income countries to set up projects in low-income countries from which the companies will benefit most.

Gandhi argues that many activities that promote health and education and that preserve the environment require continuous operating funds rather than large initial capital investments, foreign equipment or expertise. However, these are not the sort of projects that are funded by aid-givers.

Alan Durning of the Worldwatch Institute says that 'for development to help the poor, it must put them first not only as intended beneficiaries, but as active participants, advisors, and leaders' (p. 149). He argues that the following needs are most apparent:

• Self-help groups&emdash;poor people organising themselves;
• Information and innovative education programs, and improved literacy;
• Small loans which are accessible to the poor so they can buy basic assets;
• Distribution of free tree seedlings;
• Returning control over local resources to villagers;
• Low-cost, participatory provision of clean drinking water and basic health care;
• Deep cuts in debt burden in exchange for policy reforms to help the poor;
• Lower industrial country trade restrictions against poor nations;
• International co-operation to track and tax capital flight

Such assistance should not be considered as aid or charity; rather, it would constitute repayment of the debt high-income nations owe to low-income nations.

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