by Sasha Alyson
Overall, most foreign aid undermines the countries that it’s supposed to help. Many stories on this site illustrate that point.
If wealthier countries truly want to help the others – whether as reparations for harm done by colonialism and neo-colonialism, or simply as good neighbors – that’s terrific. But true help will take a very different form from the self-serving policies in use now.
Here are some suggestions.
Recognize the crime.
Western powers — merely by virtue of having bigger weapons — stole human beings, gold, and a great deal else from those armed only with spears. They enslaved people in their colonies, redrew borders, and willfully destroyed cultures that other societies had evolved to meet their needs. The one-way wealth transfer continued long after the colonial period and continues today.
We’d be much closer to finding solutions if the West would acknowledge the widespread damage caused by its predatory behavior, and give those affected a full voice in deciding what to do about it. That’s not going to happen. But any discussion of true justice must recognize that it should happen.
Pay reparations – directly to the people.
If foreign aid is intended to benefit the people of a country, then give it directly to those people. Not to the government, which probably does not truly represent them. (If it did, there typically would be no need for outside help.)
Most aid that doesn’t go into government coffers is spend on projects that are planned with an attitude that “we’ll decide how this must be spent, because we know best.” You can call this arrogance, you can call it paternalism, you can call it racism, but you can’t call it effective. As the U.N. and outside aid agencies have taken a bigger role in setting education policy for the global South, schools have gotten worse. A leading aid critic in the early 2000s, former World Bank economist William Easterly, published this dramatic graph to show how economies got worse as aid got bigger:
There’s a better way: Cash transfers. This involves giving money cash payments directly to the people you want to help. Small monthly payments do reduce hunger and poverty. They allow recipients to set their own priorities, rather than having an international agency decide what they need. They increase accountability and encourage small-scale entrepreneurs who are motivated to meet local needs, rather than to take photos that will please a foreign donor. Dozens of countries, including Mexico, Brazil, Sri Lanka, and Zimbabwe, already run cash transfer programs of this sort. In general, the amounts involved are small and they don’t make a dramatic difference, but they do help.
Ideally, cash transfers should be thought of as reparations, not aid. But to call them reparations would be an admission of guilt, so the terminology isn’t likely to change. Whatever it’s called, this gets a small amount of cash into the hands of the people it’s supposed to benefit. More importantly, aid money given this way does not support corrupt governments, and make them even less responsible to their citizens.
Every society can benefit from new ideas. But—
But not from every new idea. It usually won’t benefit from new ideas pushed from abroad, by foreigners looking after their own interests. Especially not when those foreign ideas are backed with so much money that they smother whatever was already in place, in the rush to send profits back to the home country.
What does help is when people travel to other countries, see something they like, then take home the general concept, adapt it to their circumstances, and come up with something new. Maybe it’s still a dud and won’t take root. But sometimes it works and will continue to evolve. This is called evolution. A great range of things – cultures, animals, computer programs, and beer-brewing formulas – are altered, often for the best, through a process of evolution.
But the West blocks that process. If you’re from a developing country, you’ll probably find it difficult or impossible to get a visa to visit the others. Thus, new ideas are not brought in by those who know their country; they are pushed in from outside, by those who don’t actually understand it but want to get something from it.
And no, it’s not a simple case of wealthy nations wanting to keep out terrorists, or people who arrive on a tourist visa and never leave.
For fifteen years I’ve worked with a Lao group called Big Brother Mouse to do literacy, publishing and educational work. In 2016, we got exciting news: We’d been chosen by the International Board on Books for Young People as one of two recipients of their IBBY-Asahi Reading Promotion Award, to be presented at their biannual convention in Auckland, New Zealand. IBBY also covered airfare and accommodations for two of our key Lao staff to go; I paid my own way and joined them. As an American, I would easily get a visa on arrival. Lao visitors were required to get a visa in advance. The application was long but manageable, and with an official letter of invitation from IBBY, they got their visas.
The week was both enjoyable and productive for all of us. For my two Lao colleagues, the experience of being in such a different culture, and observing so many new ways of doing things, was eye-opening. IBBY set up a pre-convention bus tour that took us to several libraries where we heard how they promoted reading. A supporter in Auckland took us around to see the sights. We had good conversations at the convention.
The other awardees were in Pakistan. Their visa applications were denied and they couldn’t attend. Did New Zealand officials really believe that the heads of a well-established reading program, who had been invited by a Swiss-based children’s-book organization, were likely to be terrorists, or scheming to switch residence? There was no logic here; it seemed like knee-jerk reaction. It was easiest to just say no. One person familiar with the situation bluntly called it racism.
Cancel odious debt.
“Odious debt,” broadly speaking, is money loaned in bad faith. It may go to a dictator who uses it for personal gain; but the country is on the hook to repay the full amount – with interest. This was commonplace during the Cold War, when the West was eager to keep third-world nations in its sphere of influence. Mobutu, the Congo’s notorious dictator, was embraced by foreign leaders such as the first president Bush. Mobutu used their loans to build himself a palace, to maintain a fleet of Mercedes-Benzes, and also to stash away an estimated $5 billion in overseas accounts. When he was ousted in 1997, he left the country mired in $14 billion of debt.
Odious debt also arises when foreign lenders offer inflated estimates on the expected returns from a project they want to fund. In Confessions of an Economic Hit Man, John Perkins tells of his role in creating these false projections: “I discovered that statistics can be manipulated to produce a large array of conclusions…. I would work to bankrupt the countries that received those loans… so that they would be forever beholden to their creditors and would present easy targets when we needed favors, such as military bases, UN votes, or access to oil and other natural resources.”
International law recognizes the concept of odious debt. Back in 1923 William Howard Taft, the Republican president who became chief justice of the U.S. Supreme Court, ruled in Costa Rica vs. UK that Costa Rica did not need to repay money loaned to a kleptomaniac dictator. The lender, he declared, “must make out its case of actual furnishing of money to the government for its legitimate use.” But his ruling applied only to that case. International law offers no remedy for odious debt. A recognition that odious debt does not need to be repaid, and a system for identifying it, would go far toward reducing the debt trap faced by developing countries. Allowing nations to declare bankruptcy would also limit irresponsible lending.
Federal law prohibits American companies from bribing foreign officials. But charities, NGOs, and U.N. agencies can and regularly do bribe government officials to get permission to carry out their programs. It is never called a bribe, of course. It’s called a consulting fee, a mobile phone “to help you stay in touch with us,” a vehicle “so you can do your job,” per-diem expenses to accompany the foreign staff on a trip, and so on.
Everyone understands that these are nothing but bribes; no one will say it. These bribes ensure that officials are more eager to please the aid agency, than to serve their population. And they’ve entirely lost interest in actually solving problems – that would make the bribes dry up.
Stop propping up dictators.
Over the decades, foreign aid has kept many a dictator and autocrat in power. Other suggestions in this list cover that.
But aid isn’t their only source of income; much also comes from selling natural resources. Properly, such resources should be seen as belonging to the population as a whole. They should not be sold, unless the population benefits. The reality is different. An army corporal can stage a coup this month, and next month sell the country’s oil to foreign corporations that have no compunction about buying what are, in effect, stolen goods.
Ending this system would be an enormous and difficult step. Big money will fight to keep it in place. But ending slavery once must have once seemed nearly impossible, too.
Stop doing harm.
While claiming to dispense aid with one hand, the West does great harm with the other. Here’s just one example of what needs to change: Close tax havens.
Tax havens allow multinational companies to conduct business – mining, manufacturing, agriculture – in the South, then use complex accounting techniques to claim that the profits were earned in a different location, such as the U.K.’s Cayman Island, with an extremely low tax rate. Estimates of lost income vary greatly; those who have accurate information want to keep it secret. The best estimates are that the losses which developing countries face from tax havens are three to five times as much as they receive in aid.
Get serious about fighting climate change.
A great many experts have concluded that climate change represents the greatest threat to people in the global South. Rising seas, hotter weather, new patterns of rain and drought, will all take a toll. It is absurd, insulting, and dangerous that U.N. agencies so often prefer to micromanage the affairs of the developing world, while never quite getting around to the hard action that is urgently needed.