Aid, governance and exploitation

Issue: 107

Charlie Kimber

In the era where there is unlimited money for the war against Iraq, there is not enough money to save millions of lives in the Third World. The richer the rulers of most powerful countries have become, the less they have given in aid. Tony Blair and Gordon Brown’s promise to seek a doubling of aid – even if it happens – comes after decades of decline. The G8 countries give half as much, as a proportion of the incomes, as they did in the 1960s. From 0.48 percent of their combined national incomes of the richest countries in 1960-65, aid had fallen to just 0.34 percent in 1980-85 and 0.24 percent in 2003 (see Charts 1 and 2).1

This has to be set against the target of 0.7 percent of gross national income (GNI) that all these countries signed up to when they adopted the Pearson Report and passed United Nations resolution 1522 in 1970. Having failed to achieve that, these same countries again voted at the Rio UN conference on the environment in 1992 to achieve 0.7 percent ‘as soon as possible’. Ten years later the Monterrey conference reiterated the call for countries to ‘make concrete efforts towards the target of 0.7 percent’.

The history of failed aid initiatives reads very much like the history of failed debt plans. And equally the reason has never been a lack of finance but a lack of political will. Today none of the G7 countries reach the 0.7 percent target. The US is the least generous in terms of aid, contributing just 0.14 percent of its GNI. Bush has already spent three times as much on the war in Iraq as it would cost to increase the aid budget to 0.7 percent. Britain, despite the rhetoric from Tony Blair and Gordon Brown, is only about half way to the 0.7 percent target. New Labour has pledged that the target will finally be reached by 2013 – but next year’s planned expenditure is £700 million short of what was needed to move towards that target.2 Most countries, including the US, Japan, Germany and Canada, have not even set a date.

An Action Aid survey in May 2005 suggested that declared aid figures are bogus. It found that 61 percent of aid flows were phantom, and that Britain, the US, Germany, Italy, France, Canada and Japan spend 0.07 percent of GNI on genuine aid.3 The failure to meet declared aid targets means, according to Oxfam, that 45 million more children will die between now and 2015, and nearly 250 million more people in sub-Saharan Africa will be living on less than $1 a day.

Instead of massive inputs of resources and people – the sort of mobilisation that would be hurled into a war – the G8 leaders come up with ever more tortuous plans. One – the only one mentioned in the Commission for Africa’s book for schools4 – is a voluntary tax on air travel. Then there is Gordon Brown’s International Finance Facility (IFF). He claims this will allow vast new funds to be released for crucial projects. In truth, much like the Private Finance Initiative (PFI) and other projects, it is a sleight of hand which will be disastrous in the longer term and it will undermine the pressure on the G8 to reach the 0.7 percent target and see aid levels plummet after 2015.5 British Treasury figures show that the IFF will result in a net reduction of aid to poorer countries of $108bn over the lifespan of the scheme. There will be some extra money up front, but only by cutting back severely on aid in the future.

Meanwhile, ‘World military spending in 2003 increased by about 11 percent in real terms. This is a remarkable rate of increase, even more so given that it was preceded by an increase of 6.5 percent in 2002. Over two years world military spending increased by 18 percent in real terms, to reach $956 billion (in current dollars) in 2003’.6

h2. Aid and the medicine that kills

The basic lack of funding for aid is only the beginning of the debate, since aid does not mean the rich handing over the wealth they have looted for use as the people of the poorer countries democratically decide. It has always been used by the world’s great powers as a political weapon, a method of rewarding useful allies and of punishing those who dare to question the global order. It has been, and still is, linked to the interests of the donors.

It is limited in two ways. First by being tied to purchases from the donor country’s firms. Almost a third of aid from the G7 countries is tied, it includes an obligation on the recipients to buy goods or services from the donor countries. The declared proportions range from the extraordinary 92 percent of Italian aid in 2004 to virtually nil for Britain – at least officially. The reality is much worse. An Action Aid study demonstrated that the top ten recipients of British technical assistance contracts offered to poorer countries were all British, US or Canadian multinationals.7 Given that ‘consultancy spending’ now accounts for nearly 40 percent of aid expenditure, this is an increasingly significant factor. The World Bank has now admitted that $20 billion of the $50 billion global aid budget goes to ‘consultants’.8 Aid lines the pockets of private firms and is used to impose disastrous neo-liberal policies on poor countries.

One example of such spending was the privatisation of electricity in Andhra Pradesh in India. In 1995 the Indian government decided to reform the state electricity board (APSEB). Britain’s Department for International Development (DFID) united with the World Bank to propose handing over the entire operation to the private sector, totally eliminating subsidies to farmers, and with annual price rises of some 15 percent. New Labour continued pushing this scheme through with, for example, £1.5 million given to consultants to advise the Indian government on privatisation and then over £100 million in grants and other transfers to smooth the way to sell-off. The plan eventually came into effect in 1999 – and it almost immediately detonated a series of protests and strikes as farmers fought back against the huge price rises. Soaring power costs were one of the factors that indebted farmers and helped to turn Andhra Pradesh into fields of despair, a place where thousands of farmers have killed themselves because of the agricultural crisis.9 The British government followed this up by supplying a grant of £1.65 million for a body called the Implementation Secretariat. Its task was to assess the state’s assets, decide which were worth keeping, and either sell, close down or restructure the rest. The DFID did not operate this body itself, but gave the contract to what Christian Aid describes as ‘the right wing, free market fundamentalists from the British-based Adam Smith Institute’.10 By the end of their orgy of privatisation, the Adam Smith Institute advisers had helped sell-off, restructure or close 43 state bodies, with the loss of 45,000 jobs.

If this is aid, the poor should be grateful that the G8 countries are failing to meet their targets!

Such consultancy companies are part of a new industry – advising on privatisation – in which Britain is a world leader. Expertise gained from domestic privatisations and PFIs is now being put to work on the international stage. For example, in August 2003 the Government of Tanzania awarded the contract to run the water supply to Dar es Salaam (population 3.5 million) to City Water, a joint venture of Britain’s Biwater International, Germany’s Gauff Ingenieure and a local investor, Superdoll Trailer Manufacturers Limited. Privatisation of Dar es Salaam’s water was a condition of the IMF’s Enhanced Structural Adjustment Facility 1996 to 1999 and its Poverty Reduction and Growth Facility from 2000 to 2003, while continued restructuring and privatisation of public utilities was part of Tanazania’s conditions for getting debt relief under the Heavily Indebted Poor Countries initiative. The British taxpayer, through the DFID, funded the pro-privatisation advertising campaign. A hostile Tanzanian public was subjected to a media campaign promoting the sell off at a cost of £430,000. The British gift to Tanzania’s people, channelled through the Adam Smith Institute, included backing for a pop song whose lyrics included the words, ‘Young plants need rain, businesses need investment. Our old industries are like dry crops and privatisation brings the rain.’

In fact, privatisation increased water prices and made poor populations more vulnerable to water-borne diseases like cholera. In May 2005 the Tanzanian government decided to cancel the contract because of the poor performance of City Water. As this article was written, the company was considering whether to take the Tanzanian government to court.

But aid is restricted, in a more general sense, even when it is not tied to particular deals. It is made conditional on certain economic or political behaviour.11 It is instructive to look at who received aid from the G8 countries in 2004. The three biggest recipients of US aid were Egypt, Russia and Israel. The French government’s favoured trio were Ivory Coast, French Polynesia and New Caledonia. Japan’s money went to China, India and Thailand. Clearly such priorities were not about channelling cash to the poorest. The aim was to buttress strategic or trade interests.

Aid is used to shape the countries which receive it. In 1980 the World Bank began ‘adjustment lending’ – loans with strings. ‘From that moment the Bank and the IMF cracked the whip. With adjustment lending came the stark choice: transform your economy or there will be no more foreign aid. It was a threat the poorest countries found hard to resist’.12 Conditionality, as adjustment lending became known, grew rapidly. Between 1980 and 1998 the IMF and World Bank made 958 adjustment loans. Much has been written on the disaster caused by the neo-liberal policies demanded as the price of aid. The indictment is so overwhelming that I will not repeat it here. But again, don’t believe that the great powers have learnt any lessons. Or rather, don’t think they give a damn if, in order to maintain their system, millions are hurled into poverty, famine and ignorance or sentenced to agonising deaths. Aid is at least as ideological today as it was 20 years ago.

The World Development Movement has done a great service in exposing the way that British aid money goes to smooth the path of privatisation across the world:

bq. The UK Government is ploughing millions of pounds of international aid money into: expensive advice on water restructuring with a massive bias towards privatisation as the only solution; public relations offensives designed to convince objecting communities that privatisation is in their best interests; funding for privatisation, either by subsidising private water suppliers and the privatisation process, or by tying aid payments to privatisation, so the only way becomes the private way. As part of this hijacked aid, the government’s Department for International Development has paid enormous sums of aid money to wealthy consultancy companies, like Pricewaterhouse Coopers, Halcrow and Adam Smith International. These ‘privatisation consultants’ offer a comprehensive pro-privatisation service: from producing ‘master plans’ on how privatisation can be achieved, to running public relations campaigns showing sceptical communities that privatisation is what they want, even if they didn’t think so. With these companies on the scene the outcome is guaranteed – ambitious programmes to involve the private sector with no consideration of alternatives or discussion of what is best on the ground. And when the dust settles and people start protesting about the failure of those programmes, the privatisation consultants are long gone. But their bills are being paid with money supposedly earmarked to fight poverty.13

h2. The governance agenda

There has been a shift in the ideology of conditionality in the last 15 years. Poor countries are somewhat less likely to be told simply that ‘private is good, public bad’. Instead they will be lectured about the need for ‘good governance’, and the requirement to ‘root out corruption’. This has been used as an excuse to explain the failure of neo-liberal policies, and as a stick with which to impose further neo-liberal measures.

New Labour’s thinking has shifted in this direction, as reflected in the Africa Commission. The DFID released a policy paper in February this year, stating, ‘We will not make our aid conditional on specific policy decisions by partner governments, or attempt to impose policy choices on them (including sensitive areas such as privatisation or trade liberalisation). The Africa Commission’s report says that liberalisation should not be forced on African countries’.14 But the question of ‘governance’ is at the top of its agenda. And the aim of ‘change in governance’ is ‘to make the investment climate stronger’.15

The British government still bases many of its aid decisions on whether or not a country has received a positive assessment from the World Bank and the IMF. These assessments are dependent on neo-liberal ‘reform’. The rulers of many poor countries are so desperate for aid and debt relief that they are prepared to take the measures necessary to get this money. They know, for instance, that unless they present a full menu of liberalising and privatising policies, no donor will visit the table. The IMF acts as final arbitrator for creditors: what it says – and believes – is what goes.

Poor countries have been so well schooled in the language of liberalisation that they can safely be left on their own to repeat the old Washington Consensus catechisms that they know are expected of them.16

As Kavaljit Singh writes:

bq. The good governance agenda is deeply rooted in the neo-liberal Washington consensus. Instead of accepting the failure of neo-liberal policies, the international financial institutions shifted the blame on the tardy application of policies in the borrowing countriesÉ The governance agenda reinforces the Washington consensus through institutional and political conditionalities. Governance reforms, as promoted by these institutions, are actually oriented towards strengthening market reforms instead of genuine democratisation and human rights. Consequently, promotion of good governance has become an integral part of the emergent global economic order.17

From the early 1990s donors such as the US government increasingly stressed ‘corruption’ as a key impediment to Third World development. It was not zeroing in on the way that capitalism breeds a culture of profits by any means necessary. It was seeking to define corruption as a function of the power of state control and an inevitable result of the ‘stifling’ presence of government regulation. As the World Bank’s 1997 Development Report put it:

bq. The state’s monopoly on coercion, which gives it the power to intervene effectively in economic activity, also gives it the power to intervene arbitrarily. This power, coupled with access to information not available to the general public, creates opportunities for public officials to promote their own interests at the expense of the general interest.18

Such an approach fitted well with the unleashing of the wrecking ball of market mechanisms across the globe. It meant, ‘Economic liberalisation and multi-party democracy were presented (by donors to African elites and by elites to voters) as the most effective means of combating corruption’.19

So long as the Cold War raged, the White House was quite happy with the undemocratic practices of such useful butchers as Joseph Mobutu in Zaire. Samuel Huntington (later to write the hymn of the neo-cons, The Clash of Civilizations) wrote in 1968 that corruption was sometimes a symbol of modernisation, of ‘efforts made by enterprising strata to circumvent the stultifying deadweight of oppressive states, to cut “red tape”.’20 Other theorists in the 1960s suggested that if elites reinvested the proceeds of their corruption then they might generate beneficial private investment or ‘open up’ the state to previously excluded groups – such as businessmen and the local agents of multinational capital. Corruption was seen as an act of defiance by private interests against the overweening strength of collective regulation. Only later was corruption regarded as rooted in the state itself and therefore the ‘war against corruption’ could usefully be emblazoned on the banners of the privatisers and the pro-market militias.

Today governance-related conditionalities are central to aid packages. They made up 72 percent of the measures demanded from African countries during 1997-99, 58 percent for Asian countries and 53 percent in Latin America and the Caribbean. Demands for good governance have greatly increased the hoops through which countries must now jump to get their aid money. The average number of criteria has risen from six in the 1970s and ten in the 1980s to 26 in the late 1990s.

One of the earliest forays was the British government’s imposition of an Anti-Corruption Commission in Zambia in 1991 as the price of continuing aid programmes. This was followed up by a call from a meeting of the Paris Club (where donors review the progress of those who owe them money and recommend future action) for the removal of three members of the government accused of drug trafficking. They may have been guilty, but there was deep resentment in Zambia that equally corrupt ministers, who happened to be friends of the West, were never investigated, still less removed and barred from office at the command of foreign powers. Anti-corruption measures were supposed to strengthen the democratic hold of the population over their politicians. In this case the Paris Club had further subverted the democratic process. And this was in a country where internal pressures had achieved significant democratic change, entirely without support from the West.

As Morris Szeftel points out, it is not surprising, ‘given low salaries and rapid inflation, that petty corruption is widespread among rank and file civil servants, a problem worsened by continuing economic crisis’.21 He gives the example of Zambia in 1997 where the monthly cost of food for a family of six (excluding rent, transport, clothes, etc) was more than the top of the General Professional Scale salary in the civil service. ‘In such circumstances low level corruption should surprise no one, and whether there is a multi-party or a single-party state, a market or command economy, is not likely to make the slightest difference.’

It is true there are many repressive and unaccountable governments in poor countries although, for example, sub-Saharan Africa has seen multi-party elections in 44 out of 50 countries in the last decade. It is true that many elections are, at least to some extent, rigged. But this is not some African peculiarity. What would we think of a country where son follows father into power on the basis of a fixed vote, a brother controls the key state where the fixing took place, the executive power has a thousand golden links with big business, money desperately needed for health and education is channelled into arms spending, elections are won only by candidates able to raise vast wads of money, people of one ethnic background are systematically discriminated against in the voting process, and hardly half of the population votes anyway? This of course, is the US, the country that is holding high the torch of freedom and prepared for global war in order to spread ‘democracy’. And that great apostle of governance, Tony Blair, holds office after failing to win the votes of 78 percent of the total electorate.

Corruption is being raised by the very powers that have encouraged and supported tyranny in the past, and who continue to defend unconditionally the rights of business to act with no democratic regulation or control. As Szeftel also writes:

bq. The resilience of corruption owes something to the disruptive nature of the reforms being imposed on African countries. More importantly structural adjustment, liberalisation and even democratic reforms have played a significant part in weakening the regulatory capacity of the state.22

A state honeycombed with private consultants and in thrall to the power of the multinationals is less likely to root out corruption than one which has to at least make some concessions to public interest. And who is calling for an accountability audit of Shell or General Motors or Citicorp? In the contemporary world the revenues of the biggest multinational corporations far exceed the GDP of many countries. The multinationals often form trade cartels and indulge in manipulative pricing causing substantial loss of tax revenue to the poor. Corporate governance has never been on the agenda of international financial institutions, powerful states and corporate entities.23

Corruption, as defined by Washington or the World Bank, ignores the central role of companies in subverting laws, evading tax and fixing prices, as exemplified in scandals such as Enron, WorldCom, Xerox, Global Crossing and Tyco International. The scale of the theft involved dwarfed the greed of even the most rapacious Third World minister, and exceeded the revenues of many governments. Corruption is not simply a feature of the state in poor countries. It is very much a hallmark of the private sector in the richest parts of the world as well.

Some of the worst cases of corruption have occurred where the private sector and the state interact. The growth in corruption in the 1990s was accelerated by the close relationship between government and political leaders on the one hand and businessmen who engage in corruption on the other.24

h2. A history of shattering states

Totally missing from the Commission for Africa discussion on governance is what happened to the continent in the 17th, 18th, 19th and most of the 20th centuries. Africa, for so long in the vanguard of civilisation, was hurled backwards by the capitalism that arose in western Europe and North America.25

Egypt, in Africa, was one of the foremost early civilisations. The great pyramid of Gizeh was built over 4,000 years ago. Aksum, in the highlands of northern Ethiopia, was a developed civilisation in Roman times. The Zanj culture on the east coast of Africa south of the ‘horn’ of Somalia developed in the 7th century. Beginning in the area around Mogadishu, a linked set of city states stretched as far south as Mozambique within 100 years. A developed culture grew up from early times in the Katanga area of what is now the Democratic Republic of Congo.

In 1510 Leo Africanus, an exiled Moor from Granada, travelled to Timbuktu (in modern Mali) and wrote:

bq. Here are many shops and merchants, especially such as weave linen and cotton cloth. Corn, cattle, milk and butter this region yieldeth in great abundance. The rich king keeps a magnificent and well furnished court. Here are great stores of doctors, judges, priests and other learned men.

In 1600 a Dutch trader entering the city of Benin in west Africa wrote,

bq. The city looks very big when you go into it. The houses in the town stand in good order as our Dutch houses are. These people are in no way inferior to the Dutch in cleanliness. They wash and scrub their houses so well that these are as polished as a looking glass.

But at the beginning of the 18th century Africa was devastated by the slave trade and colonialism. Between 9 million and 13 million slaves were shipped across the Atlantic between 1451 and 1870. As capitalism developed in Western Europe, it shovelled more enslaved human beings into the plantations of America and the Caribbean to provide the wealth to ignite industrial growth. The historian Patrick Manning has calculated that the removal of 9 million slaves across the Atlantic required the capture of 21 million Africans. Millions of others fled their villages and went into hiding. This all occurred when the population of the entire continent was only around 50 million. The population of Africa south of the Sahara did not grow at all between 1750 and 1850. This was catastrophic for societies which were short of enough people to develop further. The slave trade also transformed African political life. It meant the development of militaristic regimes which could either hold out against the slavers or which would capture their neighbours and sell them. In the first great phase of the arms trade British traders alone shipped an average of 330,000 firearms a year to West Africa between 1750 and 1807.

As the slave trade began to wane, colonial invasion exploded. Before 1880 nearly all of Africa was ruled by Africans. Within a few years five European powers (and the king of the Belgians) had divided almost the entire continent between them. Previously Africans had fought Western invasions and often won – a sign that they were not ‘primitive’ societies. But by the 1880s the West had a significant lead in certain weapons, especially accurate rifles and efficient machine guns. These were used to destroy African states and rob their wealth. At the Congress of Berlin in 1884-85 the Great Powers carved up the African continent. Not a single African was invited to attend.

Once European powers seized these territories they were squeezed for profit, regardless of the cost in human suffering or economic devastation. One particularly well documented example is Congo, taken virtually as personal property by King Leopold II of the Belgians. In 1875 he caught the mood of other European powers and wrote, ‘We must obtain a slice of the magnificent African cake.’ Within ten years he had international rights to 2.5 million square kilometres of the Congo basin, with a wealth of natural resources and a population of up to 20 million. Leopold had posed as a great supporter of human rights, even sponsoring an anti-slavery conference. But in Congo there was soon clear evidence of a carnival of massacres behind the veneer of the king’s civilising crusade. Leopold’s companies used ruthless methods to force people to harvest rubber. Each district was assigned a quota of rubber to produce. Those who failed were beaten, whipped or butchered. The Belgian authorities sent out punitive expeditions to terrorise those who resisted. The killers would hack limbs off the dead, or sometimes off the living. A Baptist missionary described how the soldiers cut off the hands of people they had shot and took them to the authorities: ‘These hands – the hands of men, woman and children – were placed in rows. This rubber traffic is steeped in blood.’ Before the arrival of the rubber companies Congo’s population was around 20 million. An official census taken in 1911 revealed only 8.5 million. Entire regions were wastelands.

Even where colonialism was not so instantly murderous, it pauperised Africa. Half of all the profits on the minerals of the Gold Coast (Ghana) made between 1920 and the end of colonialism were sent out of the country, mostly to Britain. There are those, Gordon Brown among them, who would now like to whitewash the reality of what happened under colonialism. He declared on a recent tour of Africa, ‘The days of Britain having to apologise for its colonial history are over… We should be proud…of the empire’.26

It would be interesting to hear how Brown balances such grotesque claims with the latest research on the huge scale of atrocities committed by British forces during the Mau Mau rebellion in colonial Kenya in the 1950s: the 320,000 Kikuyu held in concentration camps, the 1,090 hangings, the terrorisation of villages, electric shocks, beatings and mass rape documented in Caroline Elkins’s book Britain’s Gulag – and well over 100,000 deaths. This was a time when British soldiers were paid five shillings (equal to $9 in today’s money) for each Kikuyu male they killed, when they nailed the limbs of African guerrillas to crossroads posts. And when they were photographed holding severed heads of Malayan communist ‘terrorists’ in another war that cost over 10,000 lives.

The sense of continuity with today’s Iraq could not be clearer.

Such evidence is a timely corrective to the comfortable British mythology that, in contrast to France and other European colonial powers, Britain decolonised in a peaceful and humane manner. It’s not as if these end-of-empire episodes were isolated blemishes on a glorious record of freedom and good governance, as contemporary imperial torchbearers would have us believe. Britain’s empire was in reality built on genocide, vast ethnic cleansing, slavery, rigorously enforced racial hierarchy and merciless exploitation. As the Cambridge historian Richard Drayton puts it: ‘We hear a lot about the rule of law, incorruptible government and economic progress – the reality was tyranny, oppression, poverty and the unnecessary deaths of countless millions of human beings’.27

Africans fought colonialism, and won independence for most of the continent by 1965. But this did not mean economic freedom or an end to rule by the rich. Local elites replaced the imperialists, and the economies were still often dominated by the multinationals and big banks that had ruled before. Often the new rulers were people who had been trained by the West, such as Bokassa in Central African Republic, who had served in the French army, and Mobutu in Congo who was helped into power by the CIA. Nor was that all.

There were repeated armed interventions to prevent African governments carrying through policies that conflicted with the desires of western governments. These tore apart states and made ‘governance’ reflecting the will of the mass of people impossible.

French troops invaded one or other of their former colonies almost every year. De Gaulle sent in French troops to aid governments in Cameroon in 1960-1961, Mauritania in 1961, Gabon in 1962, Congo in 1960 and 1962, Chad between 1960 and 1963, Niger in 1963, Central African Republic in 1967 and Chad again in 1968.The interventions in the 1970s included Djibouti, Western Sahara, Central African Republic and Zaire. The 1980s saw forces intervene in Chad, Togo, Central African Republic and Ivory Coast. The next decade’s low point was the forces sent to Rwanda – twice – to prop up the government that would encourage genocide in 1994. This century has already seen French troops deployed in Ivory Coast and Democratic Republic of Congo.

Yet in many ways these direct invasions were less deadly than the US support for murderous African forces that were deemed Cold War allies. During Angola’s 27-year civil war, which claimed at least 350,000 lives, the US handed arms and money to Jonas Savimbi’s right wing UNITA organisation. Savimbi – who led a brutal rebellion against the MPLA government, was hailed as a ‘freedom fighter’ by President Reagan and accorded a welcome befitting a head of state. Renamo, the right wing butchers in Mozambique, did not receive quite such overt backing. But there is no doubt that official and unofficial support from the US was crucial to keeping the civil, war going for two decades, with hundreds of thousands of victims. US and British support was also very important in maintaining the monstrous racist regime of apartheid South Africa.

Yet the only references to this barbarous record by the Africa Commission book for schools is to claim that ‘previously the rest of the world has tried to help by intervening once war has broken out’ and ‘sometimes violence is also caused by acts by powerful foreign companies or by foreign policies’.

For it to say more would be to recognise that African state systems are a product of imperialism and the interests of the local rich, and that the G8 leaders are the last people who will genuinely fight corruption.

There is repression, lack of democracy and, yes, corruption in African countries. It is not going to be ended by the G8. What is required is democratic revolt, power to the poor, the tearing down of the one-party states and the rulers who maintain control through fear. And the people to do it are the very people who suffer from the neo-liberal policies associated with all the talk of governance—the workers, peasants and poor. The struggle against repressive states has to be linked to the struggle against neo-liberalism.

Aid and the ‘war on terror’

The pure hypocrisy of the G8 when they say that aid to Africa depends on ‘governance’ is shown by the new form of ‘conditionality’ that goes with much aid today. In a return to the ethos of the 1960s, countries in many parts of the world are judged not so much on whether they hold any sort of democratic elections, or even if they allow markets to flourish, but on whether they are part of the ‘coalition of the willing’. A 2004 report released by Christian Aid28 said donors were now prioritising strategic interests rather than the needs of billions of poor and vulnerable people. An unpublished briefing document by another British agency, Action Aid,29 also warned that development programmes were being subordinated to foreign policy: there was a “rush to draw aid into the foreign policy sphere’. In addition some forms of military training and intelligence gathering were being considered as suitable for funding from aid budgets and some donors had cut spending elsewhere to meet their commitments for Iraq and Afghanistan.

The proposed European constitution sees not only development aid but also humanitarian assistance as subordinated to the overall common foreign and security policy. Within the European Union’s structures themselves the development decisions now fall under the review of foreign ministers rather than of development ministers.

The decisions by the Bush administration on supplemental aid in March 2003 give a glimpse of what its new priorities are:
• For Turkey: $1 billion in economic aid, part of which may be used for up to $8.5 billion in loan guarantees, to be available through fiscal year 2005.
• For Jordan: $700 million in economic aid to ‘help offset the economic dislocation and hardship brought on by a conflict with Iraq’, and $406 million in military aid for border security, fighter aircraft, and airbases. Jordan will also receive part of a $1.4 billion defence department reimbursement to countries cooperating in the war on Iraq and the war on terror.
• For Israel: $1 billion in military aid, which reportedly may only be spent on the costs Israel has incurred preparing to defend itself from Iraqi attacks. Israel will also receive $9 billion in loan guarantees, to be available through fiscal year 2005.
• For Egypt: $300 million in economic aid to ‘help offset the economic dislocation and hardship brought on by a conflict with Iraq’. Egypt may use part of this money for up to $2 billion in loan guarantees. The money will be available through fiscal year 2005.
• In addition, $308.1 million in military aid was directed to 15 countries. They include Bahrain and Oman, which are providing logistical support for the war, but also Poland, Hungary, the Czech Republic, Estonia, Latvia, Lithuania, Bulgaria, Romania, Slovakia, and Slovenia, whose main contribution to the war effort has been diplomatic support for the US (the prime minister of Slovenia later announced that his country had been listed erroneously as a member of the coalition, and said that Slovenia would not receive the $4.5 million in military aid that had been designated for it).
Similar bribery in the form of military aid had gone to ten countries of ‘New Europe’ which lined up behind the US during the crisis at the United Nations over a second resolution on war against Iraq.

There was also money for co-conspirators in the war on terror. This included:
• For Pakistan: $200 million in military and law enforcement aid, for border security and aircraft. A defence department official said that Pakistan wasikely to get ‘in the region of $1 billion’ for costs it had incurred, specifically mentioning the costs of moving troops away from the border with India.
• Djibouti, the Philippines, and Colombia also shared the S308.1 million in military aid with the Gulf and Eastern European nations listed above. All are deemed to be participating in the war on terror.31

Clearly such packages (much ot which conies from the aid budget) have nothing to do with poverty reduction and everything to do with military concerns. This is confirmed by other examples.

In the name of a ‘whole-ot-governmenf approach to global security, some donors are seeking to ‘expand’ the criteria tor official development assistance. In Australia for example. NGOs are concerned about an overt shift to a new agenda that conflates the combating ot terrorism and combating of poverty, as if they were the same thing. Australian aid now includes several initiatives for counter terrorism capaotv building, including bilateral counter-terrorism programmes with Indonesia and the Philippines, a ‘Peace and Security Fund’ for the Pacific Island Countries, and a contribution to an Asia-Pacific Economic Cooperation (APEC) tund for counterterrorism capacity building.11

John Foster of the Canadian North-South Institute has shown that there are in fact two different movements over aid. with two quite different agendas: ‘that devoted to the aggressive exercise ot the power of the imperial superpower and its acolytes, and the rather phenomenal world-wide citizen response for peace and justice’.’2

What is aid for?

The politics of aid require a much more sophisticated approach than simply-saying ‘give more’. Aid may be linked to pressure tor neo-hberal change, it may be part of the ‘war on terror’, it may be part ot a military alliance or a ‘regime change’ strategy. And some writers have argued that we need to look very critically at who gets the aid. Ales de Waal has written persuasively in this area. Looking at the Ethiopian crisis of 1984. he wrote:

It is now no longer seriously disputed that the massive inflow of aid following Band Aid contributed more to the survival of the Ethiopian government, whose army was the main reason tor the famine, than the famine-stricken peasantry. Large amounts ot international food aid were diverted to the government militias. The flow ot aid allowed the army to maintain garrisons that would otherwise have surrendered and kept open roads that enabled the military to resupply its front line. Food aid distributions enticed young men forward who were forcibly conscripted. Perhaps most inside of relief aid into Africa for over a decade has contributed to the institutionalisation ot violence.33

De Waal also showed a clear link between the aid-distributing agencies in Somalia in 1991 and the pressure for US military intervention there:

Somalia was a guinea-pig for post Cold War humanitarianism. It was the first time that the International Committee ot the Red Cross hired armed guards. It was the first time that relief agencies such as the Save the Children Fund took such publicly outspoken positions criticising the absence ot the United Nations. And finally, it was the first time that international agencies successfully called for Western military intervention.'”

The false claim to be ‘saving the starving’ became a pretext for imperialist invasion.

The conditions attached to aid and the way it is structured into imperialism has led some activists, including some in Africa, to say that Africa is better off with no aid. Ghanaian activist Charles Abugre has said:

I’m simply making the point that the whole process ot the aid system has created complete take-over that for me could not be anything other than imperialism. It leads me to the point to say that we are much better off with less aid than more. The only justification tor international aid is that it acts as a compensatory measure tor the net flow that happens from the continent. The resource transfer to outside the country is happening in many ways. Aid acts supposedly as a compensation for that, but it has become much worse— in fact aid is much more dangerous to our structures now.”

This is a potent argument. But although the slogan ‘Africa does not need aid’ rightly reflects the pride and self-belief of Africans, and their desire to be seen as fighters for justice rather than cases for charity, it misses out on an important element in the global struggle for change.

If all aid is, and will always be, a bad thing, then we cannot angrily counterpose the US arms budget, or world military spending to the amounts provided for health and education in the poorer countries. If Gordon Brown refuses to increase the aid budget, then it is presumably a bonus. It is much more powerful to demand real distribution from rich to poor on an international and a national scale.

Clearly this would involve greatly increased aid, without strings. I agree with Eric Toussaint and Damien Millet when they write that after debt cancellation (for all developing countries, in full, without conditions) new sources of funding to improve the human condition should include, ‘A tripling of Overseas Development Assistance to 0.7 percent of the GDP of the rich countries and paying it exclusively in the form of donations, as reparation for a historic, human, moral social, ecological and social debt, this time owed to the South’.36 They estimate this would bring in $150 billion a year, enough to make a considerable difference to the lives of hundreds of millions of people—and we could fight for much more.

Make Poverty History calls for ‘More Aid and Better Aid’. If that is to be meaningful it must mean transformed aid, real aid, more aid. It would not be a handout laced with poisonous additions, but a recompense for what capitalism has done to the Third World, and it will be won by a joint struggle of workers and peasants in the Global South and the North.


I: Oxfam. Paying the Price (Oxfam, 2005), p6.
2: According to the The UN Millennium Project report. See Action Aid news release, 17 January 2005.
3: Aid.pdf
4-: Our Common Interest.- What does the Africa Commission Say?, available at www. co mmissionf or schools/schools, html
5: A very good report by the World Development Movement on the IFF is available at http-.//www. news/presrel/ current/iff. htm
6: Sipri report, 2004.
7.Action Aid, Profile and Impact of DF1D Technical Assistance’, unpublished report, 2004..
8: ‘Consultants Pocket $20 billion of Global Aid’, The Observer, 29 May 2005.
9: For the full details see the excellent Christian Aid report, ‘The Damage Done’ (May 2005), pp 12-30.
10: As above, p23.
II: In I991 a US aid shipment to Sudan was turned around a few miles from Port Sudan during a time of famine because the government had refused to back the US in the first Gulf War against Iraq. Not all ‘conditionality’ may be so obviously brutal, but it maybe just as deadly.
12: Christian Aid, as above. p5-
13: World Development Movement. ‘Dirty Aid. Dirty Water’ (2005). summary02.htm is a powerful resource.
I4-: Christian Aid, as above, p9-
15: Executive Summary, Report of the Africa Commission, p!5-
16: Christian Aid, as above, ppIO-11.
17; K Singh, ‘Aid and Good Government’ (January 2003). pp9~I0.
18: The World Bank, World Development Report 1997- The State in a Changing World (Oxford University Press, 1997).
19: M Szeftel, ‘Misunderstanding African Politics: Corruption and the Governance Agenda’, Review of African Political Economyno 76 (1998), p222.
20: Quoted in M Szeftel, as above, p227-
21: As above, p232.
22: As above, pp232-233,
23-. K Singh, as above, p5-
24–. J Warioba, ‘Corruption and the State’, Soundings 7- p!9^-
25= The only references to the European empires in the book for schools on the Africa Commission refers to the impact of the building of railways. Jeffrey Sachs’ book, The End of Poverty (Penguin, 2005). is, in this respect, slightly more honest.
26: Quoted, for instance, by Seamus Milne in Le Monde Diplomatique, May 2005.
27-. S Milne, ‘Britain: Imperial Nostalgia’, Le Monde Diplomatique (English edition), May 2005. 02empire
28: Christian Aid, ‘The Politics of Poverty: Aid in the New Cold War’ (May 2004).
29-. Terror Puts the Freeze on Aid’, The Guardian, 10 May 2OO4. Go to /0,3604,1213622,00.html
30: Federation of American Scientists. ‘Arms, Aid, and the War with Iraq, 2003’, has all these figures.
31: Reality of Aid Report 2004, , political overview,p5
32; J Foster, Crisis Time, Repossessing Democratic Space’ (2OO3). foster_reality_of_aid_paper.pdf
33: A de Waal. Humanitarianism Unbound: The Context of the Call for Military Intervention in Africa . Trocaire Development Review (1995), available at /Hornet/milt_intv.html
34: As above.
35: Globalisation and Sub-Saharan Africa”, international experts’ meeting. European Parliament, Brussels. April 2004:
36: D Millet and E Toussaint, Who Owes Who? (Zed Books, 2005). pp154-155-