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Future Dead Aid
Sunday, 11 October 2009 03:17

Six decades of Western aid has itself been an unmitigated political, economic and humanitarian disaster for most parts of the developing world, according to Dambisa Moyo in her book "Dead Aid".

But that's history!  Surely we have learned the lessons of the past.  Or have we?

According to OECD statistics, the leading recipients of official development assistance in recent years have been Iraq, Nigeria (mainly debt relief), Afganistan, China, Indonesia, Cameroon, India, Sudan, Vietnam, Tanzania, Democratic Republic of Congo, Pakistan, Ethiopia, Egypt and the Philippines.

First, we should cut these countries into two groups.  China and India on one side, and the other countries on the other side.  China and India are of course members of the BRICs group, the emerging group of superpowers.  They are members (like Indonesia) of the G20.  They want the West to treat them as equal partners.  And China itself has a growing programme of development assistance.

Why should Western countries give assistance to China and India?  Sure, they still have massive pockets of poverty.  But aren't they now rich enough to finance their own development?  Some development practitioners will tell you that we must stay in these countries to be able to influence policy, to promote sustainable development and democracy.  But do our efforts work?  Are they appreciated?  These two countries are fighting tooth and nail to avoid commiting themselves to reducing carbon emissions in a possible successor to the Kyoto protocol.

In the other group of countries, we have three countries which are in the front line of our fight against global terrorism, namely Afganistan, Iraq and Pakistan.  According to Transparency International's Corruption Perceptions Index, these countries are among the most corrupt out the 180 countries for which they estimate this index -- Afganistan (176th most corrupt country), Iraq (178th) and Pakistan (134th).  Also instructive is Foreign Policy's Failed States Index.  Afganistan ranks 7th in the world in terms of being a failed state, while Iraq ranks 6th and Pakistan is 10th.  

What is disturbing is that Western aid to these countries is substantially financing this corruption. 

According to the Special Representative of the UN Secretary-General for Afganistan, Kai Eide said the following as he launched a UN anti-corruption report: "Corruption in Afganistan is endemic, it hurts the poorest people disproportionately, pushes people away from the state and undermines our joint efforts to build peace, stability and progress for Afganistan's peoples." 

Corruption in Afganistan is hobbling efforts to combat the booming opium trade with powerful drug lords evading justice by simply making a telephone call to friends in high places.  According to a survey by Integrity Watch Afganistan, the average Afgan household pays an estimated $100 in petty bribes each year.  With around 70 per cent of the population surviving on less than $1 per day, the burden on families is enormous.

Moving now to Iraq, a US State Department report says that thee is severe corruption at all levels of government.  Corruption is apparently rife in the arms trade.  American guns often end up shooting American soldiers.  Corruption is also massive in the reconstruction efforts, and widespread through theft of medecins and food.  What's more corrupt high level officials are protected by the prime minister.

Let's turn now to Pakistan, the new front line in the fight against terrorism.  The World Bank found corruption a serious and growing obstacle to the investment climate in Pakistan.

According to a recent Foreign Policy Article, since 2001 the US has given Pakistan $12 billion in overt aid and another $10 billion in covert aid.  But much of this money has enriched individuals and the army and intelligence services.  The army is now one of the richest and largest industrial, banking and landowning organisations.  There have been very few real counterterrorism successes, and much money has been diverted to train and stock the army for conventional warfare with India! 

Today, a massive new aid package for Pakistan is being discussed in the US congress, with Pakistan having the hide to baulk at conditionality on this aid.

Transparency International reminds us that there is more to corruption than cash.  It defines corruption as the abuse on entrusted power for personal gain.  There can be perhaps now better example of corruption than the recent election by which Afgan Prime Minister Karzai was re-elected.  When the deputy had of the UN mission in Kabul, Peter Galbraith (American), spoke out about this, he was fired.

This shows us that in fact we have not learned from the Cold War days in Africa.  What happens is the West, especially the US, pick "friends" in the tough and dirty third world, and we go soft on them.  Regrettably, many of these "friends" turn out to be losers like former Pakistani President Musharraf, and now Afgan Prime Minister Karzai.  And thanks to these losers, their whole country loses, until they can find a leader who is competent and clean.   

Dead Aid by Dambisa Moyo.  Allen Lane.  2009
Corruption Perceptions Index, Transparency International. 
Failed States Index 2009, Foreign Policy.
How America is Funding Corruption in Pakistan.  Foreign Policy, August 11, 2009

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