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The other month Pakistan opposition politician Imran Khan warned that foreign aid from Britain never reaches
deserving people (http://www.dailymail.co.uk/news/article-2799159/british-aid-money-used-line-pockets-corrupt-
foreign-politicians-warns-former-pakistani-cricket-star-imran-khan.html) and that Pakistani politicians were
syphoning off cash from the multi-million pound aid budget handed over by the UK’s Department for International
Development.
Imran Khan’s remarks came after a report produced by the Taxpayers Alliance
(http://www.taxpayersalliance.com/foreign_aid_fuelling_corruption_in_the_developing_world) revealed that British
aid spending had done nothing to help the economic or political freedoms of people in the countries which get the
cash. In fact, the investigation stated that twice as many countries lost freedoms after receiving British aid than
improved their people’s political and human rights conditions.
Despite this, ‘giving alms’ to Africa, and other perceived poverty stricken parts of the world, remains an incredibly
popular idea that politicians think will win them votes and for which millions of citizens will happily campaign for or
proselytize about.
This post seeks to explore the main damaging consequences of foreign aid and to explain how the phrase and
concept itself is an Orwellian double speak.
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Ali G
@aligthebaptist
Increased Corruption
One of the most frequent criticisms of foreign aid is how it fuels rampant corruption in the countries that receive it.
Money that the UK government markets to the gullible electorate as being destined to help the destitute in the
third world actually ends up creating and supporting inorganic, bloated and unnecessary bureaucracies in the
form of both the recipient country governments and the donor-funded NGOs. The net result of this is to make it all
too easy for the funds to be used for anything, save for what their developmental purpose should be, or what
products and services would otherwise be supplied in an open market.
Increased Bureaucracy
The economic environment that created aid bureaucracies has therefore built unproductive organisations that
define their output as money disbursed rather than service delivered, produce many low-return observable
outputs like glossy reports and “frameworks” that can be used to justify their spending and put enormous
demands on those with scarce administrative skills in poor countries who could otherwise be engaged in doing
something useful.
This growing phalanx of corrupt, meddling, unaccountable and overpaid bureaucrats imposed on countries thus
makes it very hard for local businesses and wealth creating activities to develop as the imposition of these
parasitical alien administrations not only hoover up and corrupt the brightest and most dynamic of the host
population but also spin a suffocating web of rules and regulations devoid from any local business context.
Increased Debt
The significant debt burdens of less developed countries have often been incurred as a result of the foreign aid
packages pushed by wealthier countries and Western institutions and pursued by corrupt and greedy politicians
and businessmen in recipient countries.
‘Foreign aid’ is quite a comprehensive and encompassing term. Most people don’t realise that loans are usually
embedded in aid packages, either directly or as a condition of foreign aid donations being given in the first place.
An overload of debt combined with punishing interest rates creates the condition of economic subservience to the
creditor nations and institutions and ties down, in a perpetual manner, most of the Third World Countries to
underdevelopment, dependency and poverty.
“Yeah. To think of USAID, the Agency of International Development, as a charitable organization is, yeah, that’s
certainly totally erroneous. For the most part, our foreign aid, U.S. foreign aid, like that of most countries, is out
there to serve the interest of U.S. corporations and now multi-national corporations. There are small amounts of
aid that really go to helping people, particularly when there are times of catastrophe, to send tents and food and
water to help people that are, you know, destroyed — their lives have been destroyed by earthquakes or by
tsunamis or something, but that’s pretty miniscule and only lasts for a very, very short time. And then after that,
the aid that we send in to help these countries is primarily there to help the corporations. That’s the job of USAID
and the Export-Import Bank and the World Bank and other similar organizations.”
Similarly, in donor countries, for all the billions of dollars of foreign aid money appropriated from their taxpayers
over the years, no clear, effective system has ever been put in place to hold aid recipients and governments
accountable for how the money is spent. Such spending serves to increase the power and unaccountability of
governments and lessen the influence of otherwise free thinking and responsible individuals who would be able to
trade and produce wealth through voluntary exchange.
This anti-democratic system has reinforced social inequities and perpetuated cycles of political abuse that lead to
an entrenched and pernicious from of authoritarianism that empowers the elite few, while keeping a majority of
people in abject poverty. The West stands by duplicitously and watches as a succession of wily autocrats in
recipient countries hone their skills to beat back any democratic challenge and carry out the bidding of their
overseas masters.
Growing Dependence
The dependence on foreign aid means that it becomes the opiate of the Third World. In a similar way to how the
development of the welfare state in the UK and other developed countries has completely undermined and
destroyed society by removing the need for communities to develop themselves through cooperation and
exchange and by instead supporting and facilitating anti-social and irresponsible behaviour, foreign aid has
largely encouraged Third World governments and their populations to rely on hand-outs instead of on themselves
for development.
“One of the examples I offer in this regard is from a village in western Mali. This small town had a market garden
built for them by an international NGO, with several wells that had been constructed by another NGO. When a
fellow volunteer started her service in this village, two of the three wells had collapsed and needed to be rebuilt.
My colleague asked why the village council didn’t organize an effort to get the wells repaired, and her neighbors
said that they were waiting for an NGO to come along and do it for them. The wells had been built by somebody
else and the village felt no ownership of them. The people knew someone would come and fix them, and sure
enough, some NGO came along and fixed them after a year or two.”
An example of this phenomenon is the US ‘Food for Peace’ program that was created in 1954 to help the
Eisenhower administration get rid of embarrassingly large farm surpluses. In the 1950s and 1960s, massive U.S.
wheat dumping in India disrupted that country’s agricultural market and helped bankrupt thousands of Indian
farmers. George Dunlop, chief of staff of the Senate Agriculture Committee, speculated that such food aid may
have been responsible for millions of Indians starving.
Increased War
More than half of the international assistance spending related to Afghanistan, Iraq, and Pakistan is for military or
security uses (http://costsofwar.org/article/foreign-assistance-budget). For example, some of the international
assistance funds sent to Pakistan have been used to train their Frontier Corp in counterinsurgency. Of the $18.4
billion appropriated for the ‘Iraq Relief and Reconstruction Fund’ in fiscal year 2004, more than $10 billion was
administered by the Pentagon.
In ‘War Games: the Story of Aid and War in Modern Times (http://www.amazon.co.uk/War-Games-Story-Modern-
Times/dp/0670919772)‘, Dutch author Linda Polman argues that humanitarianism has become a massive
industry that, along with the global media, forms an unholy alliance with warmongers such that the most likely
beneficiaries of war zone operations are the powerful and abusive, rather than the most needy. Soldiers and
militias are sustained by levying taxes on aid, cargos and the movement of charity personnel, and by stealing or
diverting funds. It is also these elite groups that have best learned the images and triggers that attract aid.
Polman provocatively states that sowing horror to reap aid, and reaping aid to sow horror, is “the logic of the
humanitarian era.” Two examples she gives are how Christian aid groups that set up “redemption” programs to
buy the freedom of slaves in Sudan drove up the market incentives for slavers to take more captives, while in
Ethiopia and Somalia during the nineteen-eighties and nineties, politically instigated, localized famines attracted
the food aid that allowed governments to feed their own armies while they further destroyed and displaced
targeted population groups.
White Elephants
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Foreign aid represents money, or wealth, that has been
seized by force from taxpayers whether through taxation
or increased government borrowing (with the taxpayer
base used as collateral) to finance the aid. When the aid
is spent it therefore doesn’t represent the careful and
considered judgment of those who have legitimately
earned money through voluntary exchange.
Thus it is unsurprising that in Africa, Asia, and Latin America, the U.S. Agency for International Development
(USAID) has dotted the countryside with “white elephants” such as idle cement plants, near-empty convention
centers, and abandoned roads, amid institutional decay, deteriorating infrastructure and environmental
degradation (http://www.cato.org/publications/policy-analysis/continuing-failure-foreign-aid).
Imperialism
On closer inspection, the very idea that the purpose of aid is to alleviate poverty seems incorrect. Instead, it is
actually an important function of Western imperialism. In the majority of cases, the actual function of publicised
aid from Western governments and their agencies, including the World Bank and the IMF, is to subsidise and
facilitate the operations of the corporations and banks of the West.
Aid was, and is, therefore used by governments and big aid agencies to ensure that the governments that receive
the money adopt policies that favour not necessarily capitalism itself, but the interests of the foreign corporations
and banks, in particular those that target less developed countries they have yet to adequately entrench
themselves in. These institutions demand privatisation to sell off the public assets of the recipient countries
cheaply to foreigners (often after a significant devaluation of the local currency resulting from debt defaults), the
removal of controls on imports and on the export of capital.
These aims mean that the aid agencies support only pro-Western and often repressive governments, some of
them the product of US-supported military coups, while patriotic and sovereign governments who try to protect
and develop their own industries and improve the well being of their people are vilified by the Western
mainstream media and become the target of uprisings, coups and invasions planned and organised by the
financial elite’s intelligence agencies.
Conclusion
In light of the points covered in this post, foreign aid can be seen as a first line of defence against national self-
determination and development and against other reforms which might undermine the ability of the West, its
banks and their multinational corporations, to extract wealth from the Third World. Whether through bribery or
blackmail, or both, the elites of less developed countries know which side their bread is buttered on.
Cutting off the flow of aid would altogether be far more beneficial, says Dambisa Moyo
(http://www.dambisamoyo.com/books-and-publications/publication/high-quality-global-journalism-requires-
investment-please-share-this-article-with-others-using-the-link-below-do-not-cut-paste-the-article-see-our-tscs-
and-copyright-policy-for-more-detail-emai/). Money from rich countries has trapped many African nations in a
cycle of corruption, slower economic growth and poverty. The insidious aid culture has left African countries more
debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive
to higher-quality investment. It’s also increased the risk of civil conflict and unrest. Indeed, the African countries
that received the most aid – Somalia, Liberia, and Zaire – have all slid into virtual anarchy.
The popular understanding of international assistance programs is that these programs deliver immediate needed
disaster relief, or enhance the well-being of people through economic development. Arguably, that happens to
some, marginal, extent. However, my view is that “we should trade, not give aid” and that the money appropriated
for Western governments’ foreign aid budgets should be put back into the pocket of the Western taxpayer, thus
leaving less developed countries free from the pernicious effect of foreign aid and allowing more capital to be
accumulated by those in the West who produce goods and services and who are better able to enter into mutually Privacy - Terms
beneficial trading relationships with the Third World. /