Friday, March 09, 2007

''Rogue'' foreign aid.

This is an older piece from the International Herald-Tribune on foreign aid. I find it interesting. The main contention is that foreign aid from democratic Western countries to Africa (and other parts of the world) is being supplanted by aid from other states, such as China, who offer more money with fewer stringencies. The article insinuates that this is somehow sinister on the part of the Chinese (and everyone else doing it), but I really don't see why.

Ultimately, it seems that the problem that the writer is trying to identify is that the US' agenda is being shut out in favour of somebody else's. In other words, someone else is trying to mutually benefit with poor countries.

Foreign aid works like this (warning: gross oversimplification coming!). Countries who lack certain infrastructure elements necessary for economic prosperity (beneficial trade arrangements, solid private property laws, etc.) are given money in order to create those elements. Once the elements are in place, economic prosperity follows, so the aided country can pay back the foreign aid.

So, regardless of the intentions of the aiders, as long as the aided countries are able to (and do) spend the aid to improve their lot, then there doesn't seem to be a problem. The aiding countries get something out of the deal, but the aided countries do as well.

Now, I'm not so naive as to think that the aided countries will actually do this with the aid. After all, one of the key causes of global poverty, particularly in Africa, is corrupt regimes who pocket money instead of directing it to help the citizenry. But that's a different problem. So, too, is whether the aiding countries are slapping conditions onto their aid which inhibit its use for development. Where the money comes from doesn't seem to be a big deal, really.

(Amusingly, Googling the author, Moisés Naím, leads to his personal website, where his bio lists that he has an MSc and PhD from MIT. Here's the funny part: it doesn't tell you in what. Botany? Mathematics? Chemical engineering? Who knows! He claims expertise in economics, but writes about politics... but for all I can tell, his PhD is in Marketing.)

(Also, his Wikipedia entry is a blatant cut-and-paste of his official bio. Well done, Dr. Naím!)

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