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The problem with aid

26 Jun 2005

(Written March 23, 2002) -- originally published in The World Ages Archives

When I watched speeches on TV as a child, our president always blamed the economic difficulties on my native country of Cameroon on the world markets and the requirements of the international financial institutions. At ten or eleven years old, none of this made sense. What did make sense however, were the complaints the adults in my family had about the president himself, because I could attest to their accuracy.

I realized the price of bread went up because I went to the corner store to buy it and the change coming back got smaller progressively.

I saw the roads getting worse, because the bus I took to school traveled on them.

I saw the Mercedes of the president''s cronies getting shinier because I went to the same school as some of their kids.

These childhood moments were my first introduction to the world economy and the problems it scatters around the world for some, and the joys it brings to others. Which emotion one feels of course is clearly a matter of luck, geography or for the believers, God's plan.

More than forty years after the hopes and dreams of the independence proclamations, we still find ourselves faced with the problem of poverty, industrialization and the dilemma of trying to narrow the gap between the rich and the poor countries of the world.

As I followed the news from the U.N. development conference in Monterey, Mexico today, I wondered why the world leaders have not learned their lesson after all this time. Why they seem to be continuously repeating the same arguments when they clearly know the solution to these problems lies elsewhere.

First there was president Castro of Cuba, pontificating about the voracity of the world economic system, which in his eyes and those of many, given the applause he received, "constitutes a system of plundering and exploitation like no other in history". Then, there was George W. Bush emphasizing the need to "tie greater aid to political, legal and economic reforms".

In 1990, Francois Mitterand launched the same tirade in La Baule, France. And surely we can also relate Castro''s remarks to those of Omar Bongo, Gabon''s president then -and now-. This argument is old. It is losing teeth.

Notwithstanding the truth in the statements, each side continues to state what is necessary to avoid touching on the real issues. That is, the rich do not altruistically want to help the poor and the leaders of most of these Third World countries have no interest in proper governance and they do not like to be given lessons. Each side pursues an agenda at the expense of their own populations. The population in under-developed countries has more to lose, but the citizens of the industrialized nations also stand to lose their humanity in the short-term and put their standards of living at risk in the long term. Humanity, do you say? Yes, if being human implies appreciating the humanity of others, acknowledging their existence and sharing their grief. If being human implies recognizing that we are social animals who by necessity and not by choice, rely on one another for survival, comfort and just plain companionship. And finally, if humanity can be associated with the non-acceptance of the misery of others and the condemnation of atrocities committed in the name of maintaining an economic status quo.

Financial aid to Third World countries as the solution to problems of poverty and underdevelopment is paternalistic in addition to being simplistic, because it attempts to solve one problem by aggravating another. Financial aid can help, that is a proven fact.

It can in the best-case scenario allow the creation of infrastructures and the financing of useful and much needed projects in the areas of health and education.

In the worst-case scenario, aid is recycled to end up in a Swiss bank account or as shares of a multinational on a stock exchange in London, Paris or New-York. The latter scenario is the most recurrent. And there is the problem of the fine print.

Most the aid provided to Third World countries is rarely delivered without trade guarantees, promises of manufactured products purchases or the loosening of government import regulations. As if to essentially make that point clear once and for all, Bush added the following in his statement to the assembled delegates in Monterrey: "To be serious about fighting poverty, we want to be serious about expanding trade". Altruism has indeed been relegated to the abstract.

Focusing the discussion about world poverty on the one-dimensional dichotomy of aid providers and receivers ignores the reasons why these countries require aid in the first place.

After the savagery of colonization, most of these countries never really evolved out of the state of "nation-farms" dedicated to inundating Western markets -- those markets again! -- with raw materials. No real industries had a chance to develop nor was their creation encouraged by the elites who were still for the most part controlled by the former colonial powers. When too many of these countries started competing for the same markets -- as did Ivory-Coast and Brazil competing to sell their coffee to French companies in the late eighties --, the price was driven down by the purchasers. This in turn forced these countries to request loans from international institutions to make up for lost revenues and to finance the creation of infrastructures such as schools, roads, hospitals, electrification projects and the like.

Their problems were further exacerbated by prevalent corruption and elitism, which did not instill in the younger generation the desire to contribute to the development of their countries. As a result, most of them went West and further isolated countries in dire need of their skills. Those who stayed or came back were either absorbed in the "system" or silenced. Such was the case of reformers like Thomas Sankara in Burkina Faso, Salvador Allende in Chile and Outel Bono in Chad.

This is a compacted version of the collective history of the Third World, which omits wars, invasions, coup-d’états and other progress deterrents. Entire volumes have been written on the plight of individual countries.

In these early years of the 21st century we find ourselves still staring at the conundrum of world economic inequality. Western "free-market" evangelists tell us that Globalization will solve the problem, if only Third World countries opened up their borders and loosened their regulations to allow commerce to roam unfettered.

What these peddlers of ideology do not tell us is that the West built itself up through protectionist measures.

"British Parliamentary Acts of 1700 and 1720 for instance forbade the import of printed fabrics from India, China and Persia" Noam Chomsky affirms, thereby protecting the local textile industry for decades later. At the same time foreign territories under British control were flooded with manufactured products from the Motherland. Entire enterprises built their wealth on the carte blanche and protection they were given by their governments to exploit these colonies. The British East India Company, and the United Fruit Company are prime examples. This type of action if carried out today by Peru, Kenya or South Korea for instance would be labeled ineffective, counterproductive or contrary to the rules of proper trade.

The other recurring falsity is the almost constant linkage of democracy with "free-trade". In fact, the hijacking of the word "free" itself is an abomination that has to be pointed out. A visit to "free-trade" zones in West Africa or to maquiladoras in northern Mexico shows that they are at best, 19th century European manufacturing plants, at worst, slave plantations in the southern United States in the early 19th century.

Globalization will only help if it does not limit itself to commerce. It will only be useful if it is accompanied by proper state regulations preventing human and environmental abuses. That is, if it is injected with a fine dose of humanism. But doing this would be altruistic.

It would be contrary to current prevailing precepts of world commerce.

It would limit the competitiveness of multinationals in addition to restricting their profit margins. It would go against the very "raison d''être" of these economic entities.

For now, the bureaucrats are happy they had another successful meeting. Spain's Prime-Minister José Maria Aznar said the following at the conclusion of the summit: "Only a few weeks ago this summit was heading for failure. We therefore have reasons to be satisfied." Finding concrete solutions to problems apparently does not seem to matter anymore. Merely getting together and rehashing accepted half-truths has become the ultimate measure of success.

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