- Politics and Social Issues
International Aid – Burden on US Tax-payers, A Foreign Policy Tool to Empower the Donors and Subjugate the Weak
The callous exploitation of the practice of imparting foreign aid has become an indispensable tool in the arsenal of superpowers, in particular the United States, to reinforce and legitimize their global hegemony (with victims both at home and abroad). In principle, foreign assistance was suppose to serve the developmental purposes of the recipient, often third world nations, while strengthening the spirit of democracy and alleviating poverty and human suffering in the long term. In practice, the developmental goals of providing foreign assistance to arrested economies have taken a back seat and international aid is now used as an instrument of debt to lure poor nations in to merciless economic subjugation.
Ensuring Debilitating Dependency on Foreign Aid
Carol Lancester, a former official of USAID, defines foreign aid as “a voluntary transfer of public resources, from a government to another independent government, to an NGO, or to an international organization (such as the World Bank or the UN Development Program) with at least a 25 percent grant element, one goal of which is to better the human condition in the country receiving the aid.", (Foreign Aid, 2007). It is interesting to note that the definition employs the concept that benefit to the people of the nation on the receiving end must be one but not necessarily the only objective. The development aid provided by financial institutions (such as the International Monetary Fund and the World Bank) through the ‘philanthropic’ prime donors comes laden with a myriad of restrictive conditions that ensure the dependency of the recipient on the industrialized, wealthy nations. In other words, humanitarianism and pure altruism are seldom the motivations for the distribution of aid in any form.
One of the fundamental causes of persistent abject poverty in developing countries is the fact that the prevailing trade and aid policies have been formulated by the acquisitive, powerful nations for the sole purpose of influencing the domestic political environment in recipient countries and increasing personal wealth through the coerced obligation of purchasing products from the donor’s industries at non-competitive prices (Deen, 2004). A case study of the capitalist reforms forced on African nations showed that the conditional aid from the IMF resulted in a massive influx of imports from western nations while the growth in exports improved only marginally, a colossal trade deficit emerged that elevated poverty to unprecedented levels.
Foreign Aid and Corruption
International aid doled out by rich nations is often tied to foreign policy objectives such as dictating what ‘good’ corporate governance means and luring countries to commit to seemingly innocuous bilateral agreements to further their interests. The insidious culture of aid leveraging has left many countries prone to inflation and unattractive for foreign investment. Pumping billions of dollars in regions plagued with civil conflicts provides a powerful incentive to anarchists to instigate violence and seize the seat of power to gain unfettered access to the aid packages that come with it. The citizens of such countries get stuck in an aid fuelled world of no incentives for hard work and where the governments have no reason to seek out innovative methods to raise capital when all it has to do is reach for the hotline and ask the donors for the next transfusion of green paperbacks. African nations today spend more than 45 percent of their income annually in loan and interest payments to the donors at the expense of health and education reforms. As soon as debt relief is seen round the corner, a fresh infusion of foreign ‘aid’ kick starts the vicious cycle again.
Humanitarianism and altruism are no longer the prime motivating factors behind the giving of aid by rich donors. Foreign assistance afforded to lagging economies is characterized by political back-scratching, cynicism and insider deals to retain the ultimate monetary advantage at the donor’s end while simultaneously prying the open markets of the developing countries to weed out any competition that might weaken the appetite for further financial aid. Given the recent financial meltdown, the dried up wealth reserves of the poor will further weaken their resolve to reduce dependence on foreign aid and provide a welcome stream of income to the wealthiest for decades to come.