Tuesday, October 18, 2005

Foreign Aid is a WASTE of Money


So, is foreign aid a waste of money? With all the hoopla going on with Bono and others clamoring for more foreign aid to Africa, how can it be a waste of money? After all, many are still starving to death, others are dying from preventable or treatable diseases like diarrhea or malaria. How can the West turn a blind eye to the plight of millions of Africans that still rely on foreign aid? A recent Christian Science Monitor article ("To eliminate Poverty", CSM, 17 October 2005) suggested that "The noblest charity is to prevent a man from accepting charity; and the best aims are to show and to enable a man to dispense with aims". Are we making Africa as a continent continually dependent on the West for handouts? How do we end this cycle of poverty? Is debt relief, more aid, or disengagement the answer? Below we have two guest entries from Jeff L., and James K on whether foreign aid is a waste of money...
Dr. D.

I would imagine that an initially negative response to the concept of economic aid is hard to come by. Besides, isn't it the ethical and moral duty of any wealthy nation such as the United States to support less fortunate countries like those belonging to the African continent? It would be easy to respond with an emphatic "yes!" if you were unaware of the underlying conflicts involved with this affair. Suppose however, that economic aid wasn't the solution to the problems in Africa. Suppose that economic aid only fueled African conflict. If you believed these statements, would you still support the practice of foreign aid grants to the continent?

The United States has developed a trade based relationship with many African nations, in which it exchanges manufactured goods and economic aid in return for raw materials. An individual could easily assume that Africa is gaining necessary items for economic and industrial development through these interactions. This however, is not the case. Many African nations are being exploited by the United States (Segal). Aside from a few exceptions, African nations have developed a "negative balance of payments in the flow of aid, trade, and other resources" (Segal). That means in essence that America has taken more from Africa than it has offered. How can Africa ever develop industrially if it continually exports raw resources at a lower rate than it imports foreign goods? The answer is that it can not. Africa will never develop economically until it is able to compete with foreign markets, and the practice of foreign aid is only allowing outside nations to exploit Africa for its cheap goods.
There are a few places throughout Africa that have gained more through trade than they have given, namely South Africa. Ironically enough, South Africa is home to a certain level of "white-dominance" (Segal). According to Aaron Segal, the only places in which these exceptions occur are places in which a large white population is present or the Pentagon has interest in developing a military base (Segal). Although to America it may seem that economic aid is a very productive agency, to Africa, the supposed benefactor, it is a cause of exploitation and a breeding ground for mistrust directed at the western world.

To look at economic aid from a different perspective, we can explore the use of it once it reaches the African nations. Although African nations have received over 110 billion dollars in aid since 1995, they remain among the poorest and uneducated countries in the world (Dicklitch). A large percentage of the foreign aid, which was intended to improve African governments, education and various other ailments, has been pocketed by the political leaders (Dicklitch). Not only does this handicap the development of Africa, but it allows kleptocratic single-party states to thrive. By sending economic aid Africa"s way, America is only empowering corrupt leaders and disturbing any chance Africa has at escaping their current problems and developing new society.

After familiarizing myself with the corruption and greed associated with the practice of foreign aid it is much easier to denounce the concept as unnecessary. Not unnecessary in the sense that Africa is no longer in need of aid or that America no longer has a commitment to third world countries, but rather, unnecessary in the sense that foreign aid is being granted and used for the wrong reasons. I would go as far as to say that foreign aid is a waste of money. Why should we continue to exploit the federal treasury, in order to fill the pockets of corrupt leaders? Or on the moral level, how can we continue to use aid as an excuse to exploit Africa for its goods? The concept of economic aid on its most basic level is easy to agree with, but once it becomes manipulated it is better left unpracticed. In fact, economic aid isn't the answer at all. In order to help African countries, we need to find solutions to their problems of industrialization, corruption, and exploitation.

Dicklitch, Susan. "African corruption is a crime against humanity." Christian Science Monitor, August 9, 2004.
Segal, Aaron. "United States African Relations." J-stor online journal.
For more information on foreign aid relations with Africa, visit J-stor's online research database.
Jeff L.

Is Foreign aid in Africa a waste of money? In short, right now in the non-democratic countries -- it is. Foreign aid is not a new concept; it has been successfully used since the Marshall Plan to help rebuild Europe after WWII. Foreign aid given to Africa is different then aid to most areas of the world because of the rampant corruption in politics and abysmal conditions of economic and sometimes social channels. Since the 1960's foreign aid to sub-Saharan Africa is has reached about 500 billion dollars. In Africa most of the aid sent goes from our government to the government of the African country, and not directly to the people who need it most. Once the African government has the aid money they are free to do with it as they wish, and the governments who submit the aid do not have too much control as to how it's distributed. The corrupt leaders do not provide relief to those who need it most and instead spend the money on programs and services designed to keep the current regime in power. According to Doug Bandow, from 1982-1985 Ethiopia received 1.8 billion dollars in aid and spent 1.6 billion dollars on military, Zambia received 1.6 billion dollars and spent 700 million dollars on military, and Zimbabwe received 1.5 billion and spent 1.3 billion dollars on military. Donating billions of dollars in additional aid likely will continue to finance military projects within a country and keep the leaders' Swiss bank accounts well stocked in the millions. It seems logical at first that more aid should be sent to those countries, which are experiencing bloody civil wars because of the number of refugees and displaced people who need help. However, sending aid to these countries is an absolute waste because the money never reaches the people who need it, instead the money is used to continue fighting the civil war and more people end up dead or needing help.

So then why is there a global call to send more aid to African countries? Many multi-national corporations lobby for increases in aid because not only does it make them look like the "good guys" but they too end up seeing the benefits. Corporations that are friendly with the authoritarian leaders are likely to receive breaks from the government because of the persistence of cronyism in these corrupt countries. These corporations do not need the relief money, which is meant to feed the poor people; they simply want to turn more of a profit. The poor continue to suffer because the incoming aid reaches only the rich and powerful.

I believe that most people are some what disenfranchised over the amount of aid already sent to Africa with little to no progress being shown. In order for foreign aid to be effective as relief to the poor, the corrupt officials of African countries have to become accountable for their actions. Until then more aid might as well be halted because continuing to fund the corrupt government helps to keep the poor suppressed. Do you believe that providing more money to countries such as Sierra Leone or Niger, which rank last and second to last on the Human Development Index, will change the situation at all? I think it will actually make the situation worse. Infusing more money into a politically, economically, and socially unstable countries is a recipe for disaster. Like the infamous Notorious B.I.G. said "more money more problems." Before any aid is sent to any African country, the country needs to be relatively stabilized. Corrupt authoritarian leaders need to be deposed and democracy needs to be instated, otherwise the aid will continue to perpetuate the vicious cycle of oppression. I am not saying that we shouldn't give any money to these African countries that need it the most. What I am saying is that other measures need to be taken first so that more aid is not wasted and starts to make a difference. James K.