“Aid is not benign – it’s malignant.” – Dead Aid
The Trump Ukraine Scandal of 2019 revealed just one of the many problems with foreign aid. You’ll recall that Trump temporarily withheld $400 million in military aid to Ukraine in an apparent quid pro quo, while directing President Zelensky to find out why Joe Biden’s son was installed on the Board of Directors of an energy company, Burisma, despite his apparent lack of expertise. Vice President Biden, on the other hand, bragged about his threat to withhold 1 billion in loan guarantees, until a state prosecutor who was investigating Hunter Biden’s Burisma, was fired. He gave Ukraine 6 hours to do the dirty deed, which, in fact, they did. I’ll see your quid pro quo and raise you with my own quid pro quo.
The United States is the largest donor of foreign aid in the world, doling out cash to over 200 countries each year. The Development Assistance Committee is made up of 30 major countries that handed out over 163 billion in 2017, with almost a quarter coming from US taxpayers alone. This money masquerades as emergency preparedness, disaster relief, economic aid, and poverty relief. If you think for a minute, this money doesn’t come with strings attached, you haven't been paying attention. There’s a pay-to-play feature on all aid. Doubt me? Keep reading.
Foreign aid provides broad-based, top-down central planning with little feedback from the supposed beneficiaries. In spite of spending over two trillion dollars in the past 50 years, there has been little success and even worse results. "It hasn’t worked", we’re told, "because we just haven’t spent enough money". In reality, aid offers perverse incentives as we’ve also seen with domestic welfare. By providing too many handouts, we’ve created a “refugee syndrome”. Our national parks warn us not to feed the animals because they will become dependent and not be able to forage on their own. This is true for all species.
Aid also creates conflict as bad players race to get their hands on the spoils. Enormous corruption ensues and is unsurprisingly highest in countries that receive the most aid. Aid agencies set goals, but don’t reach them, and are completely unaccountable for the damage done in their wake. Government institutions like the World Bank and IMF have decades of failure, and yet the gravy train continues.
In William Easterly’s book “White Man’s Burden”, Easterly refers to the savior complex coming from the West, where the West is the self-appointed chosen ones whose job it is to save the rest. Here, the white man is the hero, and Africans are the damsels in distress. Local traditions and customs are ignored, as the West unilaterally decides what will be done, based on theories created by teams of academics who have likely never stepped foot in their countries.
None of this is new to Zambian-born economist Dambisa Moyo, who wrote “Dead Aid” in 2009, after seeing for herself the damage done by foreign aid. Moyo doesn’t just have the academic qualifications, a Ph.D. from Oxford and a master’s from Harvard, but she has firsthand knowledge as an African native. Moyo recounts the history of aid, the types of aid, and the devastating effects of aid on many countries in Africa. Mega-philanthropist Bill Gates, who has his own fingers all over Africa, once said about the book and Moyo – “She doesn’t know much about aid and what it was doing in Africa. Books like that are promoting evil.” When philanthropy becomes an exercise in power, it cares little about outcomes and solutions.
But taxpayer-funded foreign aid isn’t the only way to lose money in Africa. In the book, “The Idealist”, Nina Munk follows economic wonder boy Jeffrey Sachs as he looks to save Africa with his Millennium Villages Project using $120 million from the billionaire, George Soros. Long story short, his experiment failed. But that didn’t stop Sachs, a believer in massive foreign aid, from smearing Moyo’s book, when in 2009, Sachs claimed that Moyo’s ideas about foreign aid were “farcical, simplistic and mistaken”.
Foreign aid, like most government spending, is deeply entrenched in patriarchal, hierarchical politics. There is an enormous aid-industrial complex that feeds everyone from farmers, who sell their excess goods to foreign markets, to altruistic activists who get their jollies patting black and brown people on the head. This despite a complete lack of growth and poverty alleviation after decades and trillions of dollars wasted. Aid has proven to have had little to no impact at all on African development. With little input and no consideration for their unique situations, Africa has been held hostage by the very thing that was supposed to save them.
China, unfortunately, has stepped into the void created by the West and is now Africa's largest foreign investor. Instead of hand-outs, they are treating Africans as collaborators while generating much-needed progress. Africa would be wise to follow the Asian countries' market strategies. Free trade in agriculture would increase exports. Foreign capital would help to finance infrastructure and eventually bring other manufactured goods to the global marketplace. However help is delivered, it must adapt to local conditions, and markets are the most likely to adjust to regional traditions. Incentives, results, and accountability will help Africa meet its potential.
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