Third World Economy: Is Foreign Aid Destructive?"Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries."
-- Douglas Casey - classmate of Bill Clinton at Georgetown University
But foreign Aid comes with a feel-good factor. We can be satisfied that we are - our countries are - contributing to the economic well-being of starving people in the Third World. Even if only a small percentage of our money goes to that aid, at least we did something positive. Or did we?
Zambian writer Evans Munyemesha does not think so. In an article titled International Aid, published in The Zambian, he charges that development aid, "has financed the creation of monstrous projects that, at vast expense, have devastated the environment and ruined lives". Rather than getting down to "the hard task of wealth creation", Munyemesha says, "easy handouts" have been substituted "for the rigors of self-help", leaving the receiving countries economically crippled and their people worse off than before. If we look at results, African 'aid' has been an unmitigated disaster:"[Africa] has lost self-sufficiency in food production that it enjoyed before development assistance was invented, and during the past few decades, has become instead a continent-sized beggar hopelessly dependent on the largesse of outsiders---per-capita food production has fallen in every year since the 1960s. Seven out of every ten Africans, are now reckoned to be destitute or on the verge of extreme poverty, with the result that the continent has the highest infant mortality rates in the world, the lowest average life-expectancies in the world, the lowest literacy rates, the fewest doctors per head of population, and the fewest children in school."
And the situation in other parts of the world does not seem much better.
You might say, that with all the money we're paying, there must be something wrong with the receivers of our aid. The temptation is to cast around for logical reasons why our good intentions don't bear fruit. Corruption ... lazyness ... hold it for a moment. Apart from the on-the-ground view of our Zambian observer (you can see the whole article further down) we have another witness - John Perkins, a highly paid economist formerly working for an international development consultancy. In his book titled Confessions of an Economic Hit Man, Perkins describes how as a highly paid professional, he helped the U.S. cheat poor countries around the globe out of trillions of dollars by lending them more money than they could possibly repay and then take over their economies."Basically what we were trained to do and what our job is to do is to build up the American empire. To bring -- to create situations where as many resources as possible flow into this country, to our corporations, and our government, and in fact we’ve been very successful. We’ve built the largest empire in the history of the world. It's been done over the last 50 years since World War II with very little military might, actually. It's only in rare instances like Iraq where the military comes in as a last resort. This empire, unlike any other in the history of the world, has been built primarily through economic manipulation, through cheating, through fraud, through seducing people into our way of life..."
said John Perkins when he was interviewed by Amy Godman. You can find a transcription and get the audio on Democracynow.org. Much of the responsibility for the disaster, says Perkins, is the World Bank's and the International Monetary Fund's, but he is also optimistic that the situation can be changed, saying "I believe the World Bank and other institutions can be turned around and do what they were originally intended to do, which is help reconstruct devastated parts of the world. Help -- genuinely help poor people."
Well, we certainly would have to find ways to make the 'aid' actually arrive at the people, and to help them become self-sufficient, not lead them into further dependency.
Thanks to Neal Perochet of Environmental Restoration International, for bringing the article of Evans Munyemesha to my attention. Neal has been working on the ground in Africa and elsewhere, to make communities self-sufficient through environmental restoration.
Here's the article, first published in The Zambian, which does go quite a way in shaking our feel-good factor on foreign aid or, as it's also mistakenly called, "development aid"...
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first published 20 October 2003 in The Zambian
With international ‘aid’ to soon reach $100 billion a year (from $60 billion), it will be the final kick in the teeth of the poor, crippling further their Third World economies. Indeed, (as I have found out after researching through reports and what-not), it’s often profoundly dangerous to the poor and inimical to their interests to have ‘aid’ imposed upon them: It has financed the creation of monstrous projects that, at vast expense, have devastated the environment and ruined lives; it has facilitated the emergence of fantastical and devious bureaucracies staffed by legions of self-serving hypocrites; it has sapped the initiative, and creativity and enterprise of ordinary people and substituted the superficial and irrelevant showiness of imported advice; it has sucked potential entrepreneurs and intellectuals in the developing countries everywhere into non-productive administrative activities; it has created a ‘moral tone’ in international affairs that denies the hard task of wealth creation and that substitutes easy handouts for the rigors of self-help; in addition, throughout the Third World, it has allowed the dead grip of imposed officialdom to suppress popular choice and individual freedom. Call it what you will---but I will call it for what it is: Noble Colonialism! Ain’t that a ‘female dog’?
‘Aid’ [they call it] has its defenders, not least the highly paid public-relations men and women who spend millions of dollars justifying the continued existence of the agencies that employ them. Such professional communicators must reject out of hand the obvious conclusions symbolized by the white elephants of international ‘aid’ agencies: that ‘aid’ is a waste of money and time, that its results are fundamentally bad, and that ---far from being increased--- it should be stopped forthwith before more damage is done.
Whenever such suggestions are made the lobbyists throw up their hands in horror and consternation. Despite some regrettable failures, they protest, ‘aid’ is justified by its successes; despite some glitches and problems, it’s essentially something that works; most important of all ---the emotional touch, the appeal to the heartstrings ---they argue with passion that ‘aid’ must not be stopped because the poor could not survive without it. Such wealthy lunacy! The Brandt Commission provided a classic example of this thought as it loudly screamed and I quote: ‘For the poorest countries ‘aid’ is essential to survival.’
Such statements, however, patronize and undervalue the people of the poor countries concerned. They are, in addition, logically indefensible when uttered by those who also want us to believe that ‘aid’ works. Throughout history and pre-history all countries everywhere got by perfectly all right without any ‘aid’ at all. Furthermore, in the 1950s they got by with much less ‘aid’ than they did, for example, in the 1970s--- and were apparently none the worse for the experience. Now, suddenly, at the tail end of almost sixty years of development assistance, we are told that large numbers of the same countries have lost the ability to survive a moment longer unless they continue to receive ever-larger amounts of ‘aid’. If this is indeed the case ---and if the only measurable impact of all these decades of development has been to turn resolute and tenacious survivors into helpless dependents ---then it seems to me to be beyond dispute that ‘aid’ does not work. Despite the rich, flowing, and seductive language of the Brandt Commission reports, there is a stark lack of concession that prudent management of resources, a willingness to share responsibility and power among nations to fulfill common needs, ensure the right of personal livelihood, improve living standards, and guarantee the well-being of each and every individual in our global village are simply missing in the international ‘aid’ agendas.
Irredeemably out of touch with the poor, and the tedious day-to-day realities of their lives, it’s little wonder that the dignified gangsters in the fraudulent scheme of foreign ‘aid’ for Third World development so unfailingly come up with bizarre and extraneous projects like donating huge supplies of slimming products and frostbite medicine to starving Somalis in the 80s---projects that are worthless, even harmful, to those they are intended to benefit. All that these projects do is meet the bureaucratic needs of the agencies themselves, the career needs of their staff, and the commercial needs of suppliers from whom equipment and services are procured.
It’s not outside our grasp to note that the ‘well-intentioned’ efforts of our ‘well-wishing’ guests in the business of international ‘aid’ have been a sinking ship; a red-faced failure: This is clearly evidenced by the continued existence of the ‘aid’ agencies. If they were doing a good job of promoting development among the poor [which is what they actually tell us], then, presumably, they should have put themselves out of business by now. Over fifty years they should have dealt systematically with the problems that they were established to solve, closed up shop and stopped spending public funds from developed countries. But, no, they want to discuss malnutrition in Uganda while having steak dinners flown in from London; they want to discuss irrigation in Kenya while scuba-diving along the Kenyan beaches; they want to eradicate tsetse flies in Mpongwe, Zambia while sipping Scotch-over-rocks imported duty-free from Wales.
In fact they have firmly planted their roots among the poor despite the rapid changes that have taken place over time. Most of them have grown from year to year with ever bigger budgets, ever more projects to administer (and then abandon) and ever more staff on their ever-expanding payrolls---all this in the name of helping the poor!
They never cease to seize a moment to plaster their faces in front of any visiting camera in sight while blabbing about the great mission they have embarked on in the interests of the lowly and deprived. The poor would be less poor if their foreign benefactors would not waste generously donated funds by good folks on over-priced Swiss shades, English biscuits, French vacations, Italian shoes, Japanese gizmos and German silk undies.
Still yet, if the statement that ‘aid works’ is true, then presumably the poor should be in much better shape than they were before they first began to receive it more than half a century ago. If so, then ‘aid’sjob should by now be nearly over and it ought to be possible to begin gradual withdrawal without hurting anyone. Right?
Of course, the truth and ugly reality of it all is that most poor people in the most poor countries most of the time never receive or even make contact with ‘aid’ in any tangible shape or form: whether it’s present or absent, increased or decreased, are thus issues that are simply irrelevant to the ways in which they conduct their daily lives. After the multi-billion-dollar ‘financial flows’ involved have been shaken through the sieve of over-priced and irrelevant goods that must be bought in the donor countries, filtered again in then hundreds of thousands of foreign ‘experts’, ‘professionals’ (and whatever else cute foreign title you may call them by!) and ‘aid’ agency staff, skimmed off by dishonest commission agents, and stolen by glossy-bellied corrupt Ministers and Presidents, there is really very little left to go around. This little, furthermore, is then used thoughtlessly, or maliciously, or irresponsibly by those in power---who have no mandate from the poor, who do not consult with them and who are utterly indifferent to their plight. Small wonder, then, the effects of ‘aid’ are so often vicious and destructive for the most vulnerable members of the human society.
All this notwithstanding, what is to be said about ‘aid’s much-vaunted ‘successes’?
Of the Third World, Africa contains many lessons for the fraud of ‘aid’. It has lost self-sufficiency in food production that it enjoyed before development assistance was invented, and during the past few decades, has become instead a continent-sized beggar hopelessly dependent on the largesse of outsiders---per-capita food production has fallen in every year since the 1960s. Seven out of every ten Africans, are furthermore, now reckoned to be destitute or on the verge of extreme poverty, with the result that the continent has the highest infant mortality rates in the world, the lowest average life-expectancies in the world, the lowest literacy rates, the fewest doctors per head of population, and the fewest children in school. Tellingly, after Africa became the most ‘aided’ continent in the solar system in the last decade, its Gross Domestic Product per capita shrunk by an average of 3.4 per cent per annum. Sob, sob sob!!!
In the other Third World countries (like Bangladesh, Mexico, etc.), the story is the same: Grim and pathetic! Thanks to ‘aid’. Debts have consistently increased, and economic growth consistently decreased. All this spurred on by the one-size-fits-all foreign ‘aid’ policy. This sick and loathsome policy presumes not only that the ‘aid’ donors have a fairly good idea what growth-promoting policies are, but that these policies are the same everywhere. Excuse me, but this is a bunch of dung! What ‘aid’? With deepening poverty in almost every Third World country where ‘aid’ had (and still has) its hand fittingly wrapped around the necks of the poor, it would seem official that it [development ‘aid’] is neither necessary nor sufficient for ‘development’: the poor thrive without it in some countries; in others, where it is plentifully available, they suffer the most deplorable miseries. Such suffering furthermore occurs not in spite of ‘aid’ but because of it.
To continue with the trick of ‘aid’ seems to me to be generously absurd. Garnered and justified in the name of the destitute and the vulnerable, ‘aid’s main function in the past half-century has been to create and then entrench a powerful new breed of wealthy, privileged and accountable-to-one gang of foreign parasites. In this camp of screw-the-poor-out-of-existence made up of the World Bank, IMF, United Nations and other worthless behemoths of international mediocrity, ‘aid’---and nothing else---has provided ‘jobs for the boys’ and has permitted record-breaking self-serving behavior, arrogance, paternalism, and fearless cowardice. At the same time, in the Third World, ‘aid’ has perpetuated the rule of incompetent ‘important’ fools whose leadership would be more appropriate at raising monkeys at the zoo; it has allowed governments characterized by momentous ignorance and irresponsibility to thrive; last but not least, it has condoned---and in some cases facilitated ---the most consistent and grievous abuses of human rights that have occurred anywhere in the world since the dinosaurs lived.
In these days of enlightened minds, the time is nigh for the ‘Masters of Disasters’ to depart. Their ouster is achievable only if and when the poor people are willing to rediscover ways to assist one another directly according to the their needs and aspirations as they themselves define them, in line with priorities that they themselves have set, and guided by their own agendas.
Forget 'Aid'! Give them an equal opportunity!
Here some links to a recently published book on the subject of foreign aid and its effects:
Book: DEAD AID
Why Aid Is Not Working and How There Is a Better Way for Africa
In the past fifty years, more than $1 trillion in development-related aid has been transferred from rich countries to Africa. Has this assistance improved the lives of Africans? No. In fact, across the continent, the recipients of this aid are not better off as a result of it, but worse—much worse.
In Dead Aid, Dambisa Moyo describes the state of postwar development policy in Africa today and unflinchingly confronts one of the greatest myths of our time: that billions of dollars in aid sent from wealthy countries to developing African nations has helped to reduce poverty and increase growth. In fact, poverty levels continue to escalate and growth rates have steadily declined—and millions continue to suffer.
See also these related stories:
Really wicked solutions needed to beat Bush
Far from being the most positive US president towards Africa in 40 years, as Bob Geldof maintains, the incumbent of the White House is the biggest impediment to a fair deal for the world's most impoverished nations...
A Program to Fight Malaria in Africa Draws Questions
By DONALD G. McNEIL Jr. - Published: June 11, 2005
Though its budget for fighting malaria has risen since 1998 to $90 million from $14 million, the United States' foreign aid agency is spending 95 percent of the money on consultants and less than 5 percent on mosquito nets, drugs and insecticide spraying to fight the disease. The spending priorities have touched off an intense debate between the agency, the United States Agency for International Development and its critics, who include two of the Senate's most conservative Republicans.
A truckload of nonsense - by George Monbiot
The G8 plan to save Africa comes with conditions that make it little more than an extortion racket...
Food and Energy Security: Local Systems Global Solidarity
British Parliamentarian Alan Simpson offers a brilliant analysis of what's wrong with current national and international policies on food and energy and why we must break all the rules
When corporations rule the world Science in Society editorial
Africa Needs Freedom, Not "Aid"
by Sheldon Richman, July 18, 2005
Politicians are never more dangerous than when they are thinking, "We've got to do something!"
'Vulture funds' threat to developing world
President Bush declared the United States was taking on the challenges of global hunger, poverty and disease, and urged support for debt relief, which he called the best hope for eliminating poverty. But what exactly are wealthy nations doing to reduce the debt of impoverished countries? Today we take a close look at companies known as "vulture funds." Vulture fund companies buy up the debt of poor countries at cheap prices, and then demand payments much higher than the original amount of the debt, often taking poor countries to court when they cannot afford to repay. Greg Palast's BBC report on vulture funds: Today a high court judge in London ruled on the case that a vulture fund can extract more than $20 million from Zambia for a debt which it bought for just $4 million.
John Perkins: Jerk, Con-man, Shill
Perkins had switched sides - and, in Confessions of an Economic Hit Man gets his soul back from Satan only a little soiled. In Secret History, the personal confession turns into an illuminating, world-spanning jeremiad. From Latin America to Africa to the Middle East, Perkins leaps from his own story to the widespread caused by the greed armies sent marching from the boardrooms of New York and London. Today, Perkins is my confrere and colleague. He wears his hair longish and I wear mine . . . well, I've stopped wearing hair altogether. And in his writings today, Perkins' heart goes out to the Third World targets of this new empire ruled by shock troops and spread sheets. His empathy extends to those in the occupied territory known as the USA. Because, says Perkins, when the wretchedly ripped-off of the Earth rise in rebellion, the lash of the backlash is felt by the children of the lobstermen of New Hampshire, shivering under Humvees in Falluja, and never the EHM's clients' fortunate sons, frolicking in their Ferraris.
Africa to Bono: "Go home!"
We can spend billions importing medication, or you can invest in local farms that grow the Artemisinin, a Chinese herb with potent anti-malarial properties, and the factories that process it. We can continue the endless cycle of need and dependency, or you can create jobs, develop indigenous capacity, and build a sustainable future.
Aid can alleviate immediate misery and that is why we love it. Charity is a profoundly human response to all those images that pull on our heartstrings. But all evidence points to the maddening conclusion that, in the long run, aid not only has no positive effect on economic growth, it may even undermine it.
The only way Africa will develop and create wealth is if it can attract foreign capital and trade its goods on the world market like every other economically successful country does.
US food aid is 'wrecking' Africa, claims charity
Now Care, one of the world's biggest charities, has announced that it will boycott the controversial policy of selling tons of heavily subsidised US produced food in African countries. Care wants the US government to send money to buy food locally, rather than unwanted US produced food. The US arm of the charity says America is causing rather than reducing hunger with a decree that US food aid must be sold rather than directly distributed to those facing starvation. In America, the subsidies for corn in particular, help underpin the junk food industry, which uses corn extracts as a sweetener, creating a home-grown a health crisis.
Leading USA-Based Hunger Organization Rejects U.S. Food Aid is a Form of Colonialism--Not Charity
One of the largest international aid organizations in the world turned the food aid industry on its head recently by declaring that they will turn down 46 million dollars in food subsidies from the U.S. government.The United States budgets 2 billion dollars a year in food aid, which buys U.S. crops to feed populations facing starvation amidst crisis or those that endure chronic hunger. But the U.S.-based CARE International has forfeited its substantial slice of the food aid pie that is the U.S. "Food for Peace" program, claiming that the way the U.S. government distributes food hurts small poor farmers in the very communities and countries the program is supposed to help.
Monetary Causes of the Immigration Crisis
The "Washington Consensus" has wrecked their economies
Manufacturing a Food Crisis
The Mexican food crisis cannot be fully understood without taking into account the fact that in the years preceding the tortilla crisis, the homeland of corn had been converted to a corn-importing economy by "free market" policies promoted by the International Monetary Fund (IMF), the World Bank and Washington. The process began with the early 1980s debt crisis.
That the global food crisis stems mainly from free-market restructuring of agriculture is clearer in the case of rice. Unlike corn, less than 10 percent of world rice production is traded. Moreover, there has been no diversion of rice from food consumption to biofuels. Yet this year alone, prices nearly tripled...
The Food Crisis: Destroying African Agriculture
Biofuel production is certainly one of the culprits in the current global food crisis. But while the diversion of corn from food to biofuel feedstock has been a factor in food prices shooting up, the more primordial problem has been the conversion of economies that are largely food-self-sufficient into chronic food importers. Here the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO) figure as much more important villains.
Whether in Latin America, Asia, or Africa, the story has been the same: the destabilization of peasant producers by a one-two punch of IMF-World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U.S. and European Union agricultural imports after the WTO's Agreement on Agriculture pried open markets.
Why Food Aid Should Be Bought Locally, Not Shipped Halfway Around the World
Meet Khalida Mahmoud, a 29-year-old woman whose farming family was driven into worsening poverty, after U.S. food aid poured into her home region of eastern Sudan. That's not how food aid is supposed to work, but just look at the policy: your tax dollars are used to buy grain from U.S. factory farms, the same giant corporations that already receive $26 billion in tax subsidies. Then the grain is transported halfway around the world, using thousands of gallons of fossil fuel and releasing tons of harmful carbon emissions into the atmosphere. The transport typically takes months while hungry people grow more desperate.
Once the food finally arrives, it floods agricultural markets, destabilizing fragile local economies. Small farmers are the first to go bankrupt.
posted by Sepp Hasslberger on Saturday June 4 2005
updated on Tuesday July 12 2011
URL of this article:
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