Echoes in Eternity

Dalrymple has a great column this week on the impotency of foreign aid (specifically that which is given by governments). It brings to mind the same principles behind the book When Helping Hurts. The same is true in both: more times than not, foreign aid only serves to undermine its purpose. Send federal money to an impoverished country and you'll likely increase the suffering, not lessen it.

The New York Times on March 10 quoted a United Nations report to the effect that aid given to Somalia was not reaching the people most in need of it, that is to say the malnourished and the starving.

I would not be telling you the truth if I said that, when I read the news, you could have knocked me down with a feather. Can there be anyone left in the world who thinks that aid will go only, or even mainly, to the people most in need of it? By comparison with such a belief, faith in Father Christmas is a model of rational expectation. At least the presents arrive, even if Father Christmas doesn’t.
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In most African countries, it is not the enterprise of the local people that had led to the extraction of mineral wealth, but rather that of foreigners, exploitative as they may often have been. Even though local people have supplied the manual labour necessary to the extraction, the wealth as a whole that accrues to African society as a whole comes as a free gift, more or less as aid does.

This is a disaster for the rounded development of a backward country, for it makes control of the government (which receives the bulk of the wealth accruing to African society from mineral extraction) the most important, and sometimes the only, path to personal or ethnic advancement. Ambition itself is wholly politicised, therefore, and the humble task of producing things is left to the unambitious and perhaps the less able.
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If you mix in a little ethnic discord with government control of mineral revenues, the scene is set for prolonged, indeed endless and often bloody political struggles. Far from being a blessing, therefore, oil wealth has been a curse for Nigeria.

In countries less well-endowed with extractable wealth, foreign aid has played the part of oil in Nigeria. Oil constitutes at least 80 per cent of Nigeria’s foreign exchange earnings; in several African countries, foreign aid constitutes very nearly as much.

This results in the same perversions of the national economy, and the same obstacles to real development, as oil has done in Nigeria. The ambitious and able people want to join the government, and so life in general is deeply politicised; genuine economic life is paralysed, and becomes a desperate zero sum game.

When this happens, there is a built-in and deeply perverse incentive to continue to follow policies that impoverish, for a flourishing economy would obviate the supposed need for the foreign aid which is the source of the power, influence and wealth of the elite through whom it is funnelled. Here is one case in which poverty really is a source of wealth.

The most extreme instance of the above syndrome is civil war. It is therefore not in the least surprising that aid to Somalia is not reaching the neediest; it would be very surprising, indeed it would be absolutely astonishing, if it were. Neither is it surprising, however, that it should be reported as if it were surprising (unsurprising news not being news). For otherwise, the fact that aid does not reach the neediest would be a threat to our sense of power, our feelings of omnipotence. How could a few lousy uneducated Somalian gunmen be thwarting our infinite benevolence?