Category: Foreign Aid

Banned Aid: Why international assistance does not alleviate poverty

(January 1, 2010) As the Zambian economist Dambisa Moyo argues, the concept of foreign aid is flawed — not just because corrupt dictators divert aid for nefarious or selfish purposes but also because even in reasonably democratic countries, aid creates perverse incentives and unintended consequences.

Continental: The lure of Africa

(December 28, 2009) Bond markets will discover its attractions. For African governments it is clear that aid flows will go down in 2010, and dramatically so. Donor governments have slashed their aid budgets, and with most facing unfavourable demographic shifts and large deficits, to depend on their largesse is no longer sensible.

Thinking outside the foreign aid box

(December 18, 2009) Foreign aid is facing more criticism this time from an official at the United Nations Millennium Campaign. According to a recent report in the Guardian UK, Sylvia Mwichuli, the UN millennium campaign communications coordinator, told an audience attending a media workshop that governments in Africa must look for different ways to finance their national budgets, rather than relying on foreign aid.

The GOOD 100: Dambisa Moyo

Dead Aid offers a prescription for African development that doesn’t involve giving away money, but instead proposes a capitalistic approach to enable African nations to tap into the financial markets to their own benefit. By receiving and slowly improving credit ratings and by issuing bonds, while encouraging foreign investment, Moyo argues, African nations can free themselves from a damaged system and grow using the same paradigm that works for developed nations.

Aid’s corrupting influence in Afghanistan should be considered

(November 20, 2009) A recent article from Canwest details the sharpening criticism facing Afghanistan President Hamid Karzai from foreign leaders, including U.S. President Barack Obama, British Prime Minister Gordon Brown and Prime Minister Stephen Harper, concerning the country rampant corruption. But the article does little to confront the ugly reality that the massive amount of foreign aid entering Afghanistan may be playing a crucial role in supporting rampant corruption.

Africa: Foreign Aid Not Good for Region

(November 18, 2009) We must question foreign aid’s embedded, corrupting system that takes people who reside in resource-rich countries and makes them poor. Computer experts talk about malware—a short form for "malicious software" that infiltrates a computer without the owners’ informed consent. Foreign aid—like malware—harms a country’s operating system. The term "aid" in itself is corrupting. What is the justification for using such a term when Africans repay their debts, amounting to US$20 billion every year?

When the Culture of Disbursement Meets the Culture of Corruption

Steve Berkman’s concern in his book "The World Bank and the Gods of Lending" is not that World Bank staff are corrupt,  but rather that the pressure to disburse funds makes it easy for corrupt people in borrowing countries to divert and steal from aid programs with impunity. Essentially, Berkman describes what happens when the culture of disbursement meets the culture of corruption.

Pakistan needs taxation with representation, not U.S. aid, says Finance Minister

If Pakistan’s government fixed the nation’s broken tax system, it would not be forced to accept foreign aid from Western countries, says the country’s Federal Minister for Finance and Revenues, Shaukat Tareen. His remarks come in the wake of street protests by citizens and heated debates by lawmakers in the country against a $7.5-billion aid package, known as the Kerry-Lugar bill.

Corruption and Bribery as a Way of Life in Africa

(October 26, 2009) Corruption happens at many different levels of bureaucracy, and has become a way of life. According to Transparency International, in Africa, the informal sector amounts to more than 40 per cent of the economy in many countries, reaching well over 50 percent in Nigeria and Tanzania. The lack of legal protection and the desire to dodge regulations makes the informal sector easy prey for extortion and the solicitation of bribes by corrupt officials.

UK taxpayers foot the bill for PR campaigns by foreign aid groups, says UK economic development think-tank

(October 20, 2009) Stimulus packages aside, the so-called “Great Recession” is forcing government leaders across the world to look for ways to cut back on the cost of public services. No sector, or service, will be spared they say. But Carl Mortishead, writing in The Times, reports there is one government office in the UK that—far from being forced to trim costs—will be given a larger budget: The Department for International Development (DfID), the British government’s foreign aid flagship.

Breaking the myth of aid. Dambisa Moyo’s remedies

(September 30, 2009) Aid, argues Dambisa Moyo, does not eradicate some of Africa’s first rank scourges such as civil wars and corruption. Quite the reverse: development aid encourages corruption and allows some regimes to stay in place artificially. Because of the significant amounts that aid invests, it triggers envy and can stir up ethnic tensions, which sometimes lead to civil wars.