(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.
(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.
(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.
(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?
Many countries are going backwards. This is not surprising. The UN and British government—egged on by NGOs and activists—has bet the house on the daft idea that if western governments transfer enough money to governments in poor countries, health systems will magically improve and medicines will get to sick kids. As far as strategies go, this is a turkey.
(November 16, 2009) The Canadian International Development Agency is effectively dysfunctional, lacking the ability to effectively and strategically deliver its $3-billion foreign aid budget, says a recent report by Canada’s auditor general, Sheila Fraser.
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.
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.
(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.
(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.
(September 25, 2009) In the wake of recent financial crisis, the World Bank called on the developed world to drastically increase lending to developing nations. Robert Zoellick and company say that countries in Africa and other parts of the developing world need this money to combat rising levels of poverty and an economic collapse.
Internal auditors in Kenya’s Ministry of Finance have discovered losses of about 131 million shillings ($1.8 million) from what the country’s Finance Minister Uhuru Kenyatta says “appears to be fraud and corruption” in two World Bank-funded programs.
(Aug. 24, 2009) Sweden’s Minister for International Development Cooperation, Gunilla Carlsson, has called for an open debate over the role of development aid in the wake of a corruption scandal in Zambia.
World Bank President Robert Zoellick is urging the Democratic Republic of Congo to pursue better governance as a way to entice more companies to build dams in the country. In his sights are the rehabilitation of the notoriously dysfunctional Inga 1 and 2 dams. But it’s projects like these that will create more odious debts for the country’s citizens.