The Foreign Aid Racket
Its how slick Willie wants you to see it:
Are you one of those people who look askance at foreign aid because you think most of it ends up in the pockets of dictators, warlords, terrorists, and the like, and because even when it does get into the right hands, it tends to encourage dependency and work against economic growth? Well, have I got a book for you. Jonathan Foreman’s Aiding and Abetting makes a strong case that things are even worse than you thought – lots worse.
Foreman’s focus is on aid by the U.K., and his point is unambiguous: that in a time of severe budget cuts, the British Parliament’s determination to raise foreign aid to 0.7% of the country’s budget is insane. But everything Foreman says about pouring Brits’ hard-earned pounds and pence down a rathole applies in equal measure to Americans’ dollars and cents – actually, greater measure, for in a world of givers, nobody gives more, and hence more wastefully, than Americans. Besides the giveaways – throwaways? – of taxpayer loot, moreover, Foreman also examines groups like Oxfam, CARE, UNICEF, and Save the Children, many of which not only take direct contributions from the likes of you and me but also accept hefty subsidies from Western governments.
Where does all that money end up? And what good does it accomplish? As Foreman makes clear, most of the people in charge of spending it are astonishingly indifferent to such questions. In fact, they’re offended by them. To pose such reasonable queries, in their view, is to identify yourself as someone with a heart of stone. With good reason, Foreman refers to foreign aid as “faith-based” – meaning that its adherents believe in it “for reasons that have little or no connection with ascertainable facts.” Forget what the track record may show about the inefficacy, and indeed counterproductiveness, of throwing cash at various poverty-ridden hellholes; the pros in the aid game can’t conceive of doing otherwise. Call it sheer waste, if you will; in their eyes, it’s just plain good. In short, they second Bob Geldof’s 2005 comment at Live Aid: “Something must be done; anything must be done, whether it works or not.”
Of course, what the hellholes of Africa and elsewhere need is to get strong free-market economies going. But don’t tell that to a true aid-community believer – for them, capitalism is the enemy. Theirs is a zero-sum view – the West, they’re convinced, has gotten rich by making the non-West poor, and in transferring billions of dollars a year to them, we’re only giving back a small fraction of what we stole from them in the first place. The aid industry, you see, is heavily populated by folks who’re stuck in an ideological paradox: they went into this line of work because they loathe (or profess to loathe) Western consumerism and respect the simple, natural lives of the denizens of the “global South.” They want to “help”; or at least they want to be seen as helping, and certainly want to think of themselves as the kind of people who help. But they can’t face the fact that real “helping” would mean making Harari more like Houston. And they’d vehemently reject any suggestion that in their trademark admixture of compassion and condescension, they bear more than a passing resemblance to the Christian missionaries and Western-imperialist colonizers of yore whose memory they so despise.
So strong is these people’s faith in foreign aid, indeed, that they’re willing to tell gigantic, systematic falsehoods about it – pure whoppers – in order to keep the money rolling in. Greg Mortenson, the international hero who turned into a pariah when most of the Central Asian schools he’d bragged about building in his bestselling autohagiography, Three Cups of Tea, turned out to be fictitious, is, it would appear, closer to the rule than to the exception in this game. To keep donations flowing, and to make their own projects look more successful than the next guy’s, aid groups routinely inflate to a massive extent the number of people they’re feeding, educating, inoculating, and rescuing from certain death by starvation or disease. Pakistan alone has at least 5300 “ghost schools,” which exist only in the exultant reports of supposedly reputable aid groups. Ghost clinics are common, too. “The history of foreign aid,” Foreman laments, “is to an astonishing and depressing degree a history of untruths – of lies told for the greater good, of false or unverifiable claims of success, of exaggerated natural catastrophes and of dishonestly hidden deals with dictators and rebel forces.” Not to mention selective truth-telling: aid organizations, in their heart-rending TV pitches, like to cite striking statistics, such as the International Monetary Fund’s claim that half of Kenyans live on less than a dollar a day; what they omit to mention is that 75 percent of Kenyan adults own cell phones – meaning either that the dollar-a-day line is a bit of a fib, or that a dollar goes a hell of a lot further in Kenya than the aid industry wants you to believe.
The levels of improvidence, thievery, and bribery that are everyday fare in the aid racket boggle the mind. “Whole EU aid programmes, such as the $1 billion given to Russia…to help clean up unsafe nuclear power plants, have essentially disappeared,” reports Foreman, “with EU auditors apparently unable to find out where the money actually went.” After aids groups raked in their first big haul for victims of the 2004 Sri Lanka tsunami, they issued a new round of urgent appeals, insisting that the public kick in even more cash; what they didn’t mention was that they needed the dough to grease the palms of Sri Lankan officials who were holding up emergency supplies at customs. If a single aid agency had gone public with the news of this extortion, the problem would’ve disappeared in the blink of an eye; but you just can’t let donors know that the checks they write to save wide-eyed, emaciated orphans regularly end up buying yet another Mercedes for some public servant-cum-thug.
It gets worse. After the Rwandan genocide, refugees who’d fled to the Congo were paraded before news cameras by aid groups to persuade folks in the West to cough up cash. The effort raised over $1.5 billion. What the donors didn’t know was that the refugees weren’t the genocide’s Tutsi victims but its Hutu perpetrators, and that the money they’d donated was paying for “refugee camps” that were actually bases from which the Hutu were striking back at the Tutsis inside Rwanda. Meanwhile the Tutsis got zilch from the West. Everyone in the aid biz knew what was up, as did the mainstream media – but nobody reported on it for fear that donations would dry up. (The media’s willingness to cover up such monstrous prevarications is another part of Foreman’s tale.) Nor was this a unique happenstance. “Refugee camps have all too often become places of refuge and R&R for guerrilla armies or launching pads for terrorist attacks,” notes Foreman, “because the presence of foreign humanitarian NGOs works as a human shield, protecting the perpetrators from counter-attack.”
What’s perverse is that while the U.S. Congress and various Western parliaments manage to pass budget cuts that impose inconvenience upon, or even do serious harm to, their own citizens – from closing post offices to trimming veterans’ benefits to rationing potentially life-saving medical treatments – foreign aid remains sacrosanct. Quite simply, it makes no sense. India has its own space program and nuclear-weapons program, is building its third aircraft carrier, and itself gives foreign aid to other countries – yet Britain’s idea of a conservative financial move is not to entirely stop aid to India but to freeze it at 2010 levels. India’s finance minister actually tried to cut off British aid to his country in 2011, but changed his mind when U.K. officials explained that such an action would “cause grave political embarrassment” to their government. Â
Foreman could’ve written a raging polemic. Instead, he’s decorous and understated throughout, and closes with a litany of policy proposals intended to make British foreign aid more reasonable and accountable. Plainly, he’s thinking in practical terms: the U.K. government is surely not about to stop aid altogether, but perhaps, just perhaps, it will heed some of his suggestions and save a bit of money. Still, the lesson’s clear: foreign aid, with exceedingly few exceptions, is a racket, a mess, a joke, a disgrace. It should also be a scandal, but for some reason it isn’t. Nearly every shred of available evidence suggests that cash transfers to destitute kleptocracies not only don’t foster growth and development but actually impede it. Consider this: while aid to sub-Saharan Africa skyrocketed from 1970 to 2000, per capita income dropped; while aid to the Palestinian territories more than doubled between 1999 and 2006, GDP was halved. Why don’t aid workers care? Because for too many of them, the whole shebang isn’t about results but about process – about the calling to a life of conspicuous virtue. As for government officials who allocate the funds that end up being squandered, some of them argue that aid wins influence. On the contrary, aid workers’ combination of noblesse oblige and staggering credulity only breeds resentment and contempt among the recipients of their – our – largesse.
Alas, the bottom line is that for all the virtue they honestly believe they embody, the players in the aid game are, at the same time, out-and-out hustlers. Even as they act in the conviction that they’re doing good for others, they’re also doing mighty well for themselves. Too many people who are traveling to the far corners of the earth to help people living on a dollar a day are flying there in first-class seats. Many of them, furthermore, are spending less time with the poor, huddled masses than at conferences in five-star hotels where they get together to celebrate their own heroic exertions. “Indeed,” as Foreman delicately puts it, “there is an argument that the aid industry’s primary economic function is as a system of ‘outdoor relief,’ or rather high-status employment, for members of the upper and middle classes in Britain and elsewhere.” Although Foreman doesn’t call for putting an end, once and for all, to this absurd boondoggle, no one has made a stronger case than he has for doing so.
Here’s a personal experience:
In the early seventies,Â when I traveled widely in Asia and Africa, I noticed the ‘US-AID’ sacks with rice and flower in the shops. They clearly had ‘aid’ written over it, or ‘not for sale’, but here it was, being sold.
Then, when I lived in Tokyo in the late eighties, a few of us execs raised money and decided to do it ourselves. We went to Thailand, bought all the stuff and hired five trucks to take us to a refugee camp on the Cambodian border.Â One load went to a military general who had no qualms to demand it for himself; and another we had to distribute among the camp management, which means we got 3 out of 5 through.
When you give money you are lucky if 5 cents in a dollar arrives where you want it.