Foreign aid: a transfer from poor people in rich countries to rich people in poor countries
_Dean Acheson_
The issues of foreign aid have always involved in corruption and inefficiency since the beginning. However, foreign aid did have a strong impact on the developing states back in the day, contribute its efforts to help these countries become the “Asian tigers” such as Singapore, Hong Kong, and South Korea. Still, the political economy of foreign aid is a controversial topic not just in the US but also in European countries. Recently, the former member of Congress Peter Smith (R-VT) has shared some of his thoughts with us on the aspect of aid in international political economy. Sub-Saharan Africa is the region to receive the most foreign aid from Britain and France. It is also the place where frequent civil wars occur among rebel military forces. This suggests the political instability is inevitable. According to Transparency International, Sub-Saharan African countries happened to have the highest corruption rates with the average of 32/100 CPI score in the region. Indirectly, foreign aid has contributed to the development of political factions here. Terrorists are now adding wings thanks to the aid of international organizations, NGOs or IGO alike. In terms of democratic erosion, experts might argue that foreign aid, especially economic aid for Sub-Saharan Africa has no effect on democratic consolidation.
Foreign aid is a major phenomenon developed after 1945, mainly due to three factors. The first factor is the success of the Marshall Plan that the US supports Europe. Second, the wave of independence of Asian nations in the late 1940s and Africa in the 1960s created a new impetus for development aid for these countries. The third factor is the Cold War when superpowers use aid as a tool to expand influence and help establish “friendly regimes” with recipient countries. Foreign aid implies a relationship between a party that is an aid beneficiary and a party that is a recipient of aid. Although the country is the most important subject in foreign aid relations, international organizations such as the World Bank (WB) and the International Monetary Fund (IMF) also play an important role. However, many of the countries in South Africa did not receive proper foreign aid. 195 countries were being analyzed to prove the relationship between foreign aid and poverty was not effective, despite their economic growth. With the US, foreign aid has been a success after the establishment of the Marshall Plan. However, since 2000, the amount of aid has increased many times and even more when rebuilding European infrastructure after World War II. But aid increased does not mean that it will help change political institutions and build democracy. Due to the weak state authority in management and the emergence of autocratic politicians, plus the weakness of donor control, foreign aid has failed to achieve its goals.
Because African countries are limited in their ability to set aid objectives, in terms of aid reception and use, it depends on the binding conditions of donors. As a result, aid to Africa for the purpose of development is small but primarily serves the donor’s own purpose. In particular, US aid is intended to exert a comprehensive influence in Africa, from politics to economy – society; EU aid to Africa aims to strengthen its role and political influence, promote goods into the continent and limit African migration to Europe; Chinese aid is aimed at bringing people to hamlets to build villages and exploit resources.
Corruption from aid also contributed to curbing the process of building a democratic government. In 2008, Malawi’s President Bingu Mutharika bought a Dassault Falcon 900EX immediately after receiving the latest aid from the EU, while Ugandan President bought a Gulfstream G550 jet and built his lavish mansions with EU aid money while most Ugandan people live in poverty. African countries are known for their rich soil and abundant resources (ex: Lithium). Agricultural production is a major strength of the black continent but the weakness in resource management is adversely affecting the agricultural sector. It is sad to see that the assistance of the international community cannot help the people here get rid of poverty due to corrupt political institutions.
African Agricultural Status Report 2018 said many African countries are investing in large projects to be able to quickly receive “cash on hand” while ignoring small farmers who are contributing to supply. food for the whole country. The report warns that African countries will struggle to develop their economy and reduce poverty unless there is a link between high-level political will and government action to help small-scale farmers. In Kenya, corruption in the agricultural sector under the manifestation of fake fertilizer distribution to imports of contraband food products flooded the market adversely affecting local farmers.
In the struggle for democracy, corruption has become a disease that undermines the equality and freedom of people living in sub-Saharan Africa. Moreover, efforts to repel corruption are not continuous and coordinated among donors and local authorities have slowed the pace of economic development in Africa in general, in which democratic construction process is more fragile than ever.
I like how you choose to address a unique perspective of the role of aid in regional politics as it pertains to the entire continent. It is interesting that while donors can have a purpose for their action and goals for the African region’s development, a lot of these authoritarian leaders will argue that foreign intervention is a source political turmoil and not face the reality that it feeds a lot of their corruption. If providing aid poses a problem, then does an ideal democracy develop without any external influences? I can think of how the US, for example, has meddled with Latin American politics and ultimately affected how many of their democracies played out, so I could see where such an argument would come from.
I also agree with your point that foreign aid has helped develop several metropolises in Asia, and I would like to pose the following question to you: if such is the case in post-colonial Asian cities, what do you think is the fundamental difference between the regions of the world? Surely, many European countries have some vested interest in maintaining post-African colonies as economic hubs, as they did with Hong Kong, for example, after the turnover. So what compels these Western countries to take advantages of the financial needs of the region instead of improving their economy to better trade or manufacturing?
I really find it hard to imagine how these people steal money from an “aide”, money that supposed to help the ‘poor and the hungry’. You said, “In the struggle for democracy, corruption has become a disease that undermines the equality and freedom of people”, and this is very true. Since democracy is giving the people equal opportunity and representation, and by taking away the opportunity (money to start over, food, clothing etc) to live a normal life, you are destroying the way of democracy.
I like how you compared the countries in Asia that have been successful through international aides and countries in Africa. To be more specific, what do you think are the factors why African Countries continue to fail? and how Asian countries became successful thought these foreign aides? What separates the two?
I thought that looking at aid for a country as a whole is unique. It is interesting that a donor of financial aid can have an idea in mind for the development of a country, however with many authoritarian leaders in charge many of the financial aid is seen aiding their corruption. The question then stands: if a democratic country is sending aid to an autocratic country in hopes of a transformation to democracy, is the aid helping or just furthering the autocracy?
I find the comparison between the countries in Asia that have used financial aid successfully and the countries in Africa that continue to struggle even with the financial aid. You stated that “African countries are limited in their ability to set aid objectives, in terms of aid reception and use, it depends on the binding conditions of donors”. Why do you think that African counties are limited in their ability to set aid objectives? Also, do you think this is the main difference between why some Asian counties have grown with financial aid and why African countries continue to struggle?
The main problem here is the mentality. A lot of these African leaders see no further than the end of their nose. The decisions they make are always for their own benefit. They don’t care about the people and probably never will. The difference between the Asian countries as mentioned and the African countries is pride. Always playing the position of the one that always need rescue isn’t fun and at some point you snap out of it and do everything in your power to not find yourself in that place again. You use your resources, play your cards right and get yourself out of the hole, right? But see the thing is that some African leaders have no sense of pride or shame or how can one explain President Bingu using aid money for his own selfish needs? Understand that a lot of African leaders do not feel the impact of a struggling economy as much as a normal citizen of their country would. Their children go to school abroad so they aren’t as concern as they should be with the education of the youth. When sick or in need of a surgery, they either go to Europe or the US, you know why? because most hospitals are not well-equipped. Of course i do not speak for the whole Africa but for most of it, especially the west African ones. I can take Ivory Coast as an example. Ivory Coast has a population of 25 million people if i am not mistaking. The country has NO TRAUMA CENTER. Yes, you read it right. I don’t have to go into details on how many people died and continuing to die because they are no able to get the proper treatment after an accident etc…Less than two months ago, Ivory Coast lost one of their biggest artists because they could not do a CT scan after his motorcycle accident. Internal bleeding. He died the next day. Do you think that the government don’t have the funds to invest in building more hospitals, trauma centers, clinics, free educations etc? Of course they do. They just don’t care enough to do anything about it. Sad reality.