Often said but lately underlined by a Nobel Prize winner – and a socialist one – is that foreign aid to developing countries does not eliminate poverty. Usually such views are expressed by people branded as rabid right-wing racists. No such branding this time.
The comments highlight allegations that the foreign aid industry, and all who profit from it, would best like to be ignored.
For example, one allegation is that the sum total of aid poured into Africa is mirrored in the Swiss bank accounts of African leaders. Another, more plausible one is that foreign aid always comes with strings attached that make sure the aid is spent in the country of the donor.
What gets fewer, if any, headlines is the curious link between the poor showing of aid and the socialist character of the governments receiving it. Instead, what does receive overwhelming media attention is the role of private aid agencies and charities that between them funnel massive amounts of money to the developing world.
The record of these charities is spotty, at best. While collecting millions from generous donors (even at street level), they are experts at public relations, mounting campaigns to stir the conscience and open wallets with headline-grabbing pictures of starving children. The money rolls in on cue, thus enabling their bureaucracies to enjoy pay scales, often on a par with multinational companies.
The larger charities are household names, but the industry harbours all shapes and sizes, from those determined to convert the world to their brand of Christianity or Islam, to those specialising in teaching basic hygiene.
If there is a perceived need for anything in the developing world there is almost a guarantee that there is an aid agency ready to provide it – including lecturing governments on how to govern.
Noble sentiments
Too few of the noble sentiments driving this business have anything to do with bringing economic growth to underdeveloped countries, so that their citizens can one day enjoy a permanent improvement in their standard of living.
Indeed, some observers (often former aid workers) point to a culture of dependency that charities create resulting in a permanent reliance on aid. They point to the unforeseen effect of food aid that results in reluctance to plant and sow the next season. When grain comes in abundance, delivered by air or by trucks emblazoned with a charity’s logo, why bother.
In fact, conservative economists have been saying as much for 50 years. The best and fastest way to end poverty is letting private enterprise get on with the job. And with minimal state interference.
It worked for Japan after World War II; the Marshal Plan did the same for Europe. It is happening in China, and in Vietnam. Mad socialist ideologues either have not allowed the wealth-creating process to happen (North Korea) or have wrecked existing private sectors (Venezuela).
North Koreans too are poorer than they were before socialists took over. In fact, wherever socialism’s utopian theories are practised the best one can say is that they have ended poverty for a tiny minority of intellectuals and politicians, especially those who, with their ominous fondness for military language, call themselves the “vanguard”.
The self-appointed vanguard complains that private enterprise does not result in equality, but often makes inequality worse. This is allegedly a terrible crime, which is a bit rich coming from those who are quite blatant about making “party members” recipients of special privileges.
It also results in another terrible thing. It changes rural folk leading an idyllic life with one pig and a vegetable patch, into industrial slaves paid ridiculously low wages.
Backbreaking drudgery
In reality, rural folk the world over cannot wait to get to places where factories offer real money so they can buy and operate cellphones and laptops, as well as dress in clothes instead of blankets. Equality is the last thing they care about. In fact, as a rule, inside every rural person is an industrial worker trying desperately to get away from a life of backbreaking drudgery.
None of these obvious truths deters those who believe “development” aid is the way to relieve poverty. They steadfastly ignore the evidence that it mostly contributes to corruption, removes initiative and replaces it with a mendicant culture and allows governing elites to sit back and relax while others flood in to help.
Most Western charities and governments mean well, but thieves see them coming and huge chunks of aid money never see the people who need it most.
Empathy and noble intentions are not enough. Angus Deaton, this year’s Nobel Laureate in Economics, agrees. He wants, like any decent person, to see the end of the grinding poverty that afflicts so many people in the world. He has looked at the redistribution policies of the political left and came to the conclusion that they do a poor job on the equality front, and are not a patch on the liberty and free trade policies advocated by the politically right-wing (the capitalists the left insist are interested only in grinding the faces of the poor).
Who would have thought private enterprise could do a better job than all the multinational charities in the charity sector, plus the billions poured into underdeveloped countries by western governments in the last 60 years?
Deaton is explicit on the flaws in foreign aid. It undermines democracy, and undercuts local institutions that are needed to grow an economy. He says aid only does well in the fields of education and health. Where it fails is in economic growth.
What remains difficult to understand is that the world has two incontrovertible examples of how to get people out of poverty. They are operating right now. China is the obvious one. India is at last following the same course. In both countries, foreign aid has played a very small part.
In Africa on the other hand, particularly in Anglophone countries south of the Sahara, vast amounts of foreign aid have been pumped in with very little effect other than the production of some swollen Swiss bank accounts. Too often, the aid is given to corrupt governments.
The driving force behind foreign aid has come from the left of the political spectrum. True to form, they are full of ideas on how to spend other people’s money. The dirty secret is that aid often leaves the poor worse off. They seem to have no shame, accepting praise for their actions and even parading their own supposed virtue.
Parading their virtue
If money alone were the answer to poverty, it would not exist. While millions are no longer poor, economic growth and free enterprise changed their lives, not charity or foreign aid. Thanks to the influence of socialist economic thinking, sub-Saharan people are poorer now than they were at independence (apart from Botswana), whereas China’s freeing up of part of its economy has cut the number of its poor, some say, by 700 million.
This is not to say that aid cannot help poor nations. It can, if it is used for building schools, repairing the existing ones, making good roads, digging wells and feeding hungry people in times of famine.
Aid can help mobilise civil society, as our build-up to 1994 proved, but what is really needed now is aid that encourages anti-corruption efforts, human rights, the rule of law and transparency
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Democracy and free enterprise need strong institutions and an educated populace. Foreign aid has generally avoided both areas.
* Keith Bryer is a retired communications consultant.
** The views expressed here do not necessarily reflect those of Independent Media.
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