Several decades ago, Teresa Hayter wrote
a book called "Aid as Imperialism", which outlined how foreign
aid was used by rich countries to further the interests of big businesses
based in their own countries, and served to destroy productive capacities
in the recipient countries. Since then, the world has changed greatly.
Foreign aid has become an insignificant part of international capital
flows; developing countries as a group are now exporters of capital to
the developed world; even the World Bank and IMF receive more from developing
countries as repayment of past loans than they are currently giving out
in new loans; imperialism has taken on new even more devastating attributes
which make its earlier use of aid as instrument seem like childs play.
But then, the more things change, the more they remain the same. While
foreign aid may have dwindled into insignificance in quantitative terms,
it is still being used in the same cynical ways. But now the packaging
is more slick and effective, and there is tremendous media hype surrounding
even the smallest and most conditional transfers of aid resources.
Thus the recent G-8 package of debt relief for highly-indebted African
countries was presented as a major act of generosity by the governments
of core capitalist countries, even though it was only a partial forgiveness
of debt that had multiplied over the years not because of any fresh aid,
but simply by piling on interest. And the package forced poor African
countries to open up their economies even more to capital from the North,
by privatising utilities and essential services such as water and sanitation.
Now there is fresh evidence of the cynical and exploitative attitudes
surrounding the provision of supposedly humanitarian aid, in the controversy
around food aid from the United States to famine stricken regions in Africa.
Parts of sub-Saharan Africa have experienced very severe drought this
year, which has destroyed harvests and rendered populations in countries
in Malawi extremely vulnerable to potential starvation. The problem is
more acute because these same countries have been forced by the World
Bank to dismantle their own food buffer stock programmes, so they have
no internal mechanism to protect their people and feed the hungry in times
of shortage.
The current law in the US stipulates that all food aid provided by the
United States Agency for International Development (USAID) has to be grown
by American farmers and mostly shipped on United States-flag vessels
and therefore handled by American agribusiness companies. This massively
increases costs and delays the provision of food to needy areas, since
the food has to be shipped long distances. Some rich country governments,
such as Canada, have already taken the decision to buy at least some of
the food aid locally, so as to reduce costs, be able to buy more food
for the aid programme and also provide some help to local African farmers.
A similar proposal has been made by some within the USAID programme, faced
with growing evidence of long delays in the provision of food aid in emergencies.
The US government proposed to provide one-fourth of the food aid through
locally purchased supplies, which would dramatically increase the speed
of response, the most critical variable for effective famine relief. This
meant that that most of the food aid would still be procured from US farmers
and companies, but at least some would be provided quickly and more cheaply
at times of urgent need.
This proposal has met with immediate opposition, from both expected and
unexpected sources. According to a recent article in the New York Times
(12 October 2005), the administration's proposal has run into opposition
from three interests some critics call the Iron Triangle of food aid:
agribusiness, the shipping industry and charitable organisations.
The opposition from business interests is very predictable. Although local
purchase of food aid is meant to help American farmers, in reality the
benefits go to the large agribusinesses that control the trade. US government
records show that only four companies and their subsidiaries, led by Archer
Daniels Midland and Cargill, sold more than half the $700 million in food
commodities provided through the USAIDs food aid programme in 2004. The
shipping industry is also a major beneficiary: just five shipping companies
received over half the more than $300 million spent to ship the food aid
exported in that year.
But the real surprise is the opposition from NGOs dealing in aid after
all, surely charitable organisation concerned with helping the poor should
be the most concerned about getting the food to the affected people as
quickly and cheaply as possible?
Not so, apparently. A recent book on the political economy of food aid
established the often unsavoury role played by supposedly well-intentioned
NGOs. In their book, "Food Aid After Fifty Years: Recasting its Role,"
Christopher B. Barrett and Daniel Maxwell show how at least seven major
US-based international NGOs, including Catholic Relief Services and CARE
i, depend on food aid as a major source of not just relief activity but
also income. Food aid accounted for between one-fourth and half of their
budgets in 2001.
While these NGOS distribute food in poor countries, it is less well known
that they have also become grain traders, selling substantial amounts
of the donated food at a profit in local markets in poor countries, in
order to generate funds for their anti-poverty programs. This is obviously
a very inefficient way to finance anti-poverty or development programmes,
given that at least 50 per cent of the cost of such food aid is spent
on transport, storage and administrative costs. Yet because of this process,
such NGOs now have a major vested interest in perpetuating this inefficient
and unduly expensive system.
This is why the Coalition for Food Aid, which represents 16 non-profit
groups, has also opposed the proposal, and is not even willing to allow
10 per cent of US food aid to be purchased locally. The most they will
agree to is a small pilot project, paid for only with additional appropriations,
not money from USAIDs core budget.
It is a strange world indeed, when even those "charitable" organisations
ostensibly oriented towards helping the poor are involved in a nexus that
clearly damages the interests of the recipients. Clearly, the aid world
is as murky as ever, with just as much bad news for the citizens of developing
countries.