Aid to Poverty

The German magazine Der Spiegel has a report upon development aid in Africa and its problems which is well worth quoting extracts from .

"...The main reason that there is starvation in Africa is that there are no profits to be made in cultivating or trading foodstuffs. Either developmental aid ruins the profits or corrupt leaders rob their people blind..."

"..UN's employees are paid to fight hunger, and that's why they usually write reports in which they dramatically portray the situation in Africa and which they usually end with appeals demanding more donated food... And what happens when the help comes? First the merchants complain because the cost of food drops through the floor. Nor is it worth it, under the status quo, to build up any surplus stocks. Then, the farmers complain because their crops become worthless..."

"...Where there is hunger, it results from unethical leaders who steal from their people and let them either starve or rush them into wars...Kenya currently has 94 ministers and assistant ministers, each of whom earns more than $20,000 (€12,940) a month on top of having their own state-funded compound...."

In a previous Der Spiegel interview Kenyan economics expert and capitalist apologist James Shikwati said that aid to Africa does more harm than good.

Shikwati: ...Despite the billions that have poured in to Africa, the continent remains poor.
SPIEGEL: Do you have an explanation for this paradox?
Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere...

Shikwati: ... and at some point, this corn ends up in the harbor of Mombasa. A portion of the corn often goes directly into the hands of unsrupulous politicians who then pass it on to their own tribe to boost their next election campaign. Another portion of the shipment ends up on the black market where the corn is dumped at extremely low prices. Local farmers may as well put down their hoes right away; no one can compete with the UN's World Food Program. And because the farmers go under in the face of this pressure, Kenya would have no reserves to draw on if there actually were a famine next year. It's a simple but fatal cycle...

SPIEGEL: In the West, there are many compassionate citizens wanting to help Africa. Each year, they donate money and pack their old clothes into collection bags ...
Shikwati: ... and they flood our markets with that stuff...Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide..."

As Socialist Banner has always claimed , the craziness of the capitalist market economy creates the contradictions that provides for the existence of poverty alongside plenty .Patching the system up with humanitarian aid fails to deliver the real solution . Only socialism can end African's poverty .

to aid or not to aid

The previous post reported how one charity declined American aid . It drew my attention to this interview with Kenyan economist James Shikwati . Of course he is no Marxist , and his solutions to the poverty of many Africans is a reformed capitalism , unfettered by government controls , his views on foreign aid is of interest .

Some extracts :-

SPIEGEL: ... The industrialized nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor...

... Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit...

... this corn ends up in the harbor of Mombasa. A portion of the corn often goes directly into the hands of unsrupulous politicians who then pass it on to their own tribe to boost their next election campaign. Another portion of the shipment ends up on the black market where the corn is dumped at extremely low prices. Local farmers may as well put down their hoes right away; no one can compete with the UN's World Food Program. And because the farmers go under in the face of this pressure, Kenya would have no reserves to draw on if there actually were a famine next year. It's a simple but fatal cycle...

... Hunger should not be a problem in most of the countries south of the Sahara. In addition, there are vast natural resources: oil, gold, diamonds. Africa is always only portrayed as a continent of suffering, but most figures are vastly exaggerated. In the industrial nations, there's a sense that Africa would go under without development aid. But believe me, Africa existed before you Europeans came along...

SPIEGEL: In the West, there are many compassionate citizens wanting to help Africa. Each year, they donate money and pack their old clothes into collection bags ...

... Shikwati: ...Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide.