Foreign Aid—“Please Just Stop!”

It really irritates me when people like Bono and Bob Geldof pose as benefactors to the  poor people of Africa.  It irritates me even more when Prime Minister Paul Martin fawningly laps up whatever nonsense these two rock stars dish out, and then tries to shove it down the throats of Canadians—not to mention the throats of hapless Africans. 

Back in 1985, when Geldof organized the first Live Aid concert, he had at least a plausible claim to the “benefactor” label.  He raised $100 million by persuading thousands—possibly millions—of individuals to dig into their own pockets.  I’m skeptical about whether the money helped many impoverished Africans, but since the donations were voluntary, the project was at least innocuous vis-à-vis the donors. 

The Live 8 campaign of 2005 was an entirely different matter.  No longer content to be a charity fundraiser, Geldof now labels his ongoing crusade a matter of “justice, not charity.”  His Live 8 website proclaims to prospective supporters: “It is your voice we are after, not your money.”   But how can that be true?  

Once Geldof’s fans have harangued their respective governments into donating 0.7 percent of their national incomes in foreign aid every year, whose money do they think is going to be sent?  At least some of it will come out of the taxes paid by those very fans whose money he claims not to be after.  Are Geldof and fans all unable to grasp this?  Are the fans all participants in the underground economy?  Or is Geldof simply lying to them about not wanting their money?  

 This time around, unlike 1985, Geldof doesn’t just want money from people he has managed to persuade.  He also wants money from people he has failed to persuade.  He wants it taken by force, without giving its owners any choice in the matter, using their governments as instruments of coercion.  And his “long march to justice” rhetoric attempts to embarrass them into silence, lest they appear to their neighbours as opposing justice.  

Regardless of what Geldof or Bono or Paul Martin may think, Canadian taxpayers are not responsible for the plight of people in Africa.   We didn’t cause them to be poor, uneducated, or diseased.  Making one group of people pay to alleviate another group’s unrelated hardships has nothing to do with justice.   On the contrary:  it’s an injustice.  

The really ironic part is that while government-imposed foreign aid is unjust towards the citizens of the donor countries, it’s probably even more harmful for the citizens of the recipient countries.  

Kenyan economist James Shikwati  of the Inter Region Economic Network (www.irenkenya.org), interviewed by the German magazine Der Spiegel just before July’s G8 conference, sent this urgent plea to the west regarding foreign aid:  “For God’s sake, please just stop.”  

Shikwati believes that development aid has been one of Africa’s main problems.  The vast army of apparatchiks in charge of aid agencies such as the UN’s World Food Program have a vested interest in never achieving their goals.  If hunger were eliminated in Africa, their jobs would evaporate too.  One German aid worker admitted to Der Spiegel, “When I started this job I was brimming with idealism.  But after I had saved enough money within a few years to buy a house, the relationship I had to my job changed.” 

Meanwhile, Shikwati says that if the west stopped sending aid, “…normal Africans wouldn’t even notice.  Only the functionaries would be hit hard, which is why they maintain that the world would stop turning without this development aid.”  

When food gets sent from Europe or America, Shikwati says, “local farmers might as well put down their hoes right away.  No one can compete with the UN’s World Food Program.”  Local agriculture is thus destroyed, and more food aid is needed again the following year. 

The same thing happens when container loads of donated used clothing arrive.  Local tailors and seamstresses can no longer find customers.  As low as wages are in Africa, no-one can be cost-efficient enough to compete with goods that are available for free. 

For at least 40 years, the west has poured aid into Africa.  The current flow is about $26 billion per year.  In some countries, aid has constituted 80 to 95 percent of their GNP.  Yet the countries that have received the most remain among the poorest. 

The crying shame is that it doesn’t need to be this way.  The economic principles that govern wealth creation are well established and simple to understand.  People can claw their way out of the most desperate poverty if they are given the freedom to work and to keep what they earn.  History has demonstrated this over and over again.  

Natural resources and wide open spaces are not pre-requisites (although Africa is not lacking in either).  Resource-starved, population-dense Hong Kong rose rapidly to prosperity when its laws allowed people to start businesses without hindrance, accumulate capital without confiscatory taxation and make contracts free of stifling regulation.  Sound money, the rule of law, and free trade (not “fair” trade) all play a role. 

The one thing the west could usefully export to Africa is knowledge—knowledge of how to structure a nation’s laws to secure freedom and prosperity for its people.  Alas, among those in the west who make African aid their avocation, this knowledge appears to be a commodity that is sorely lacking. 

 
- end -