“Aid is not bad … because it is sometimes misused, corrupt or crass; rather, it is inherently bad, bad to the bone, and utterly beyond reform.”
Not my words, but those of prominent journalist, Graham Hancock. He was the East Africa correspondent of The Economist from 1981 to 1983, covering the distribution of aid by select partners. The content of his book, Lords of Poverty: The Power, Prestige, And Corruption of The International Aid Business (1989) was drawn from his experience reporting on international aid for The Economist. Critics agreed that Hancock’s work was a powerful critique of the international aid system, though a number disagreed with Hancock’s thesis that aid was inherently bad.
I’d argue little has changed. European Union policy runs heavily on the premise of keeping Africa poor. The protectionist bloc applies tariffs to finished products from Africa, whilst allowing raw materials to be traded tariff-free. It has led to Germany being the second largest producer of ground coffee in the world, despite not growing a bean.
The “Free Stuff” in International Aid suppresses the local market. A farmer, struggling to grow food in an arid land has no chance of selling produce when people can just help themselves to sacks of flour, or whatever, off the back of a UN wagon. Net result is the farmer not trying. Economist, Dambisa Moyo argues that aid has made African countries poorer and growth slower. Aid, coupled with the EU tariffs, there is a disincentive for entrepreneurs who might otherwise start up businesses to create employment and wealth.
Aid is often directed based on geopolitical and economic interests rather than need. The UK and US, for example, direct aid to countries that are significant markets or of geopolitical importance, such as Nigeria, Syria, Pakistan, Israel, Egypt, and Jordan. This means that the poorest countries often receive less aid than they need.
No one wants to see people starving and it is good that the West can come together in times of genuine need, but the current system needs a massive overhaul and reduction in size. To do that opposes the distribution agencies, like UNRWA and Red Cross. How could the CEOs justify their huge salaries if their operation was slashed? Until then, the taxpayer continues to be bled dry and the poorest nations on earth remain poor. Trade, not Aid id the way forward.
Martin Day – Treasurer