Foreign aid as a means of Western neocolonialism

Opinion: International aid has a disastrous impact on African countries and perpetuates dictatorships, which are the main cause of Africa's problems

Anna Mahjar-Barducci|
The recent coups in Niger and in Gabon are showing that African countries are getting tired of the West, and of France in particular, while China is increasing its clout in the continent. Instead of pushing for an ECOWAS military intervention, which would cause a bloody first African continental war, the West should start analyzing why it lost Africa. It is less about the colonial period and more about how Western countries behaved after giving “independence” to these countries.
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I still remember that when I was a child in the 1980s in Dakar, Senegal (which gained independence from France, on August 20, 1960) all phone calls and mails to Europe would go first through Paris, banks were French, and even the advisor to the President was a French citizen sent by the Elysee. However, more than focusing on the Françafrique, France's sphere of influence over its former colonies, it is important to examine the fact that neocolonialism is more than anything caused by foreign aid. After all, when the foreign power has the final say on what should be done because it brings aid, then the recipient state loses its sovereignty.
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הפיכה בגבון
הפיכה בגבון
People celebrate the military coup in Gabon
(Photo: EPA)
Over the years, international aid has had a disastrous impact on African countries. It is foreign aid that has perpetuated dictatorships, which are the main cause of Africa's problems. In the seventies, the British economist Peter Bauer stressed: “Aid is a process by which the poor in the rich countries subsidize the rich in poor countries.”
Echoing Bauer, in a still current 1986 analysis, titled “The Continuing Failure of Foreign Aid,” renowned American writer James Bovard added: “Foreign aid has rarely done anything that countries could not have done for themselves. And it has often encouraged the recipient governments’ worst tendencies–helping to underwrite programs and policies that have starved thousands of people and derailed struggling economies.” He stressed that aid filled the pockets of a growing number of “corrupt, meddling and overpaid” bureaucrats and invested in “white elephants:” “idle cement plants, near‐empty convention centers, abandoned roads.” “[Foreign aid] encouraged Third World governments to rely on handouts instead of on themselves for development. No matter how irresponsible, corrupt, or oppressive a Third World government may be, there is always some Western government or international agency anxious to supply it with a few more million dollars,” wrote Bovard.

The Marshall Plan for Africa Won’t Work

After years of Western funding to governments of African countries, the situation in the continent is becoming worse, and, for this reason, immigration to Western countries is increasing. However, European leaders keep on suggesting old solutions for the development of the continent, such as the launch of a “Marshall Plan for Africa.” Yet, these initiatives do not develop or promote the African economy. Foreign aid can work when a country is faced with emergencies such as natural disasters or periods of famine, but absolutely fails to favor any type of sustainable economic development.
Almost always, the benefits that derive from development aid projects are relative to the project’s duration and tend to disappear in the following years. Furthermore, international aid doesn't go directly to the starving population, but to governments. The direct consequence is the growth of the role of the State in the economy of the recipient country, which does not offer incentives to private sector’s development.
Leading Ugandan commentator Andrew M Mwenda said that there is “little evidence to show that foreign aid provides impetus for economic growth in African countries.” Mwenda stated: “Good governance is not a product of altruism but of enlightened self-interest. Foreign aid distorts the evolution of such a relationship. Rather than forge a productive relationship with their own citizens, governments find it more profitable to negotiate for revenues from abroad.”
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מורדים מהארגון המוסלמי "ברית הכוחות הדמוקרטיים", שנשבע אמונים לדאעש, העלו באש את המעונות בביה"ס התיכון בעיר הגבול מפונדווה
מורדים מהארגון המוסלמי "ברית הכוחות הדמוקרטיים", שנשבע אמונים לדאעש, העלו באש את המעונות בביה"ס התיכון בעיר הגבול מפונדווה
People mourn in Uganda, after ISIS affiliated militia killed local residents and burned a school
(Photo: AFP)
Concerning the efficacy of the Marshall Plan in Europe itself, the American economist Tyler Cowen argued that it is “a modern myth.” According to Cowen, Europe would have recovered anyway with or without the Marshall Plan, adding that there is no compelling evidence that it was this initiative that caused European economic growth. In fact, American aid has never exceeded 5% of the GDP of the recipient countries. As Cowen pointed out: “The assistance totals were minuscule compared to the growth that occurred in the 1950s.”
The American economist also stressed that the post-WWII European economy was already industrialized and well-integrated. In Africa, however, these same conditions that existed in post-war Europe are not there. The African continent must build institutions and infrastructures from scratch and not rebuild damaged ones, as it happened in post-war Europe. Furthermore, foreign aid and the Marshall Plan promote only statism, and not free enterprise and economic freedom.

The Downward Spiral Of Poverty

In her New York Times best-seller, “Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa,” Zambian-born economist Dambisa Moyo explained that the West gives money to African governments in two forms: low-interest loans (i.e., money lent at an interest rate lower than the market one, and often for longer periods than those normally in use), and grants. However, for Moyo, the main question is how strongly recipient governments “perceive” loans, provided on highly concessional terms and frequently forgiven, as being “different” from grants. Hence, aid should be defined as “the sum total of both concessional loans and grants,” which is doomed to create a culture of dependency and economic laziness.
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President of China Xi Jinping and South African President Cyril Ramaphosa attend the China-Africa Leaders' Roundtable during the BRICS Summit
President of China Xi Jinping and South African President Cyril Ramaphosa attend the China-Africa Leaders' Roundtable during the BRICS Summit
President of China Xi Jinping and South African President Cyril Ramaphosa attend the China-Africa Leaders' Roundtable during the BRICS Summit
(Photo: Alet Pretorius / EPA )
Furthermore, Moyo emphasized: “[Aid] props up corrupt governments – providing them with freely usable cash. These corrupt governments interfere with the rule of law, the establishment of transparent civil institutions and the protection of civil liberties, making both domestic and foreign investment in poor countries unattractive. Greater opacity and fewer investments reduce economic growth, which leads to fewer job opportunities and increasing poverty levels. In response to growing poverty, donors give more aid, which continues the downward spiral of poverty.”

China versus the West in Africa

However, if the solution is to cancel foreign aid, what is the alternative? The answer is to focus primarily on foreign direct investment.
For Moyo, this opportunity comes from China, as the West failed. Chinese multinational companies are in fact investing in the African continent, building infrastructures, offshoring production, and manpower, in exchange for access to natural resources. Surely China is taking advantage of Africa, using its "debt trap" diplomacy, but is the West doing any better? The West used foreign aid to enslave the continent by making it unproductive and dependent. In this way, it kept its grip on the continent, as the aid, financed Africa’s corrupted leaders while leaving the people poor and with no hope.
According to Moyo, China’s direct investments are at least filling the plates of hungry kids at the end of the day. The West now fears that many African countries are joining BRICS, which encourages trade and cooperation but is dominated by non-democratic countries. However, the West should do a self-examination and understand that its “aid” policies not only made Africa poorer but also made democracy an empty word. Africa needs investors to create an entrepreneurial culture, not foreign aid that creates economic and political dependency.
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