The Foreign Aid Myth

The End of Poverty by Onnesha Roychoudhuri (AlterNet) is an interview with Jeffrey Sachs, head of a panel of “over 250 development experts to lay out practical strategies for promoting rapid development”. The biggest hurdle, as far as he’s concerned is the “lack of appropriate effort” on the part of “rich countries”. The main problems faced by poor countries today are malnutrition and diseases like AIDS and malaria; these could be “controlled quite dramatically and easily if we just put in the effort”. Opponents have criticized his ideas for being too all-encompassing, countering that development should occur “piecemeal”, with evaluation of efficacy after each change. Sachs counters that the aid necessary to help the third world is not rocket science:

“One doesn’t have to test whether it’s good to have more food production, or malaria bed nets or doctors or teachers. These are proven technologies. If we were introducing something new, that would be different, but ours is not an approach based on new discoveries, this is an approach based on the best of proven technologies.”

There are several reasons for the reluctance in helping poorer countries get on their feet. First and foremost is the attitude that helping other countries is basically a socialist gesture whereas extracting their resources for the minimum cost is the more capitalist approach. Our brainwashing vis-a-vis economic and political systems makes it difficult to justify giving them anything at all. The other problem is the massive disconnect in the economic field between model economies and real ones.

“[S]tudents in economics departments write dissertations about countries that they never stepped foot in … [t]hat’s like becoming a doctor without ever seeing a patient. We don’t do case studies. We don’t train students to understand the differences across countries. There are a tremendous number of loose generalizations made all the time.”

These loose generalizations translate from unfortunate oversights on our side of the ocean to millions of lost lives on the other. When the economies of richer countries are suffering, the first thing to get lopped off is the piddling foreign aid budget. The attitude is very much class-based, with the prevailing attitude being that of a lord dealing with incompetent underlings:

“Keep poor people away from our taxpayers, tell them to tighten their belts, tell them to solve their own problems, tell them to keep sending their debt payments to us.”

The last sentence is crucial, because the crippling debt imposed on many developing countries results in their paying an astonishing percentage of their pathetic GNPs as interest on loans to the first world. These countries are already massively disadvantaged to begin with (many of them having spent decades as colonies) and must somehow move forward with a 16 ton weight around their proverbial necks.

The story told at home results in Americans who “think we’re doing everything we can be doing and [who are] told that there’s nothing more we can do”. The first thing you hear in foreign aid debats it that it’s useless because the money and supplies gets sucked up by corrupt governments. Some money is lost to corruption, but much of it is not. NGOs have gotten quite good at maximizing the amount of aid that reaches the needy; they’re not stupid. The Millenium Project proposes a .7% of GNP foreign aid allotment per country. Whereas higher than current US foreign aid levels, it is an order of magnitud less than gross military spending and would do a lot more to prevent conflict and terrorism. Many Americans are totally deluded about foreign aid spending, thinking that “we give several percent of our annual income and several percent, maybe even a quarter of budget to foreign aid”.

President Bush has created the Millennium Challenge Accounts (MCA) as structured foreign aid, but “[i]n three years, it’s only committed about $100 million dollars to one project” instead of a promised $10 billion. That’s par for the course for Bus; he gains political advantage and goodwill from the promise, but withholds the money required to execute it. (See also the No Child Left Behind program.) Britain’s International Financing Fund (IFF), which plans to reach the .7% of GNP goal by 2015 will have to proceed without the U.S. The plan is quite ambitious, as detailed in UK pushing for Africa debt plan (BBC). It calls for “a doubling of European aid by 2010 and 100% debt relief, as well as an end to many trade subsidies”.

Bush naturally begged off on the plan with a vague comment that it did “not fit the US budget process”. Translated, this means that the US economy needs all the inflows it can get right now and absolving debts to countries in far worse shape than us is just not in the cards for the “compassionate conservative”. Bush simply reiterated his pledge “to increase development aid through its own Millennium Challenge Accounts”, but we saw before how much aid comes from that tap. Realistically, “the war in Iraq and its related costs have pushed Africa off the US agenda” and, though Europe will be “pressing ahead even without US involvement”, progress will be nearly impossible as the international organizations involved (World Bank, IMF, etc.) are structured so that “any changes … require US backing”. In effect, add the future dead of Africa to the deaths caused by the Iraq war.

Earth’s species feel the squeeze (BBC) tells of another Millenium study documenting the state of biodiversity in developing regions. Cultures that live closer to the land than Western nations are much more sensitive to environmental changes. The first world attitude attitude toward the resources of the planet and the wholesale non-sustainable pillaging encouraged by raw capitalism is reducing biodiversity on all levels at a prodigious rate. The conclusion of the study is that “[i]n order to reduce hunger and poverty and increase access to clean water and sanitation, we need to have a strong base of environmental sustainability”. In effect, the developing world needs to stop its rapacious, heedless attack on resources; the third world will die off first and we may not care, but it won’t be long before the we follow.

“The sums of money we throw at the environment in the West are relatively modest; and the sums of money the West is prepared to devote to developing countries is pitiful.”

When non-military foreign aid is squeezed out of the US, what kind of aid is it? Abstinence-Only in Africa (Planned Parenthood) tells us that the God agenda is wending its way into foreign aid programs, based on Vatican ideas that condoms “encourag[e] young people to be more promiscuous” and don’t stop AIDS anyway.

“Abstinence-only programs, which openly stigmatize and question the effectiveness of condoms, will receive one-third of the $15 billion that the U.S. government intends to spend over the next five years to fight HIV/AIDS abroad.”

Despite the abysmal failure of abstinence-only programs abroad as well as at home, the Bush administration is more than happy to blow $5 billion to assuage a narrow political group at home. The many Africans whose lives could have been saved by that amount of money don’t even show up on Bush’s radar screen. Where the attitude of the EU towards the third world is still predatory, it comes across as positively high-minded and remorseful when compared to that of the US. The US seems content to be the Ebenezer Scrooge to Africa’s Bob Cratchitt, not caring about the long-term effects of these policies on themselves or the world.