Socialist Worker

The Politics of aid

Socialists should demand more than simply "give more" when it comes to disaster relief

Issue No. 2216

Few events expose the moral bankruptcy of capitalism more starkly than the response of our leaders to “natural disasters”. This summer the people of Pakistan have suffered floods that have destroyed whole villages and towns, leaving millions of the world’s poorest prey to hunger and disease.

But even as the scale of the disaster became clear, governments across the world failed to act quickly. When they did, they offered a pitiful amount of humanitarian aid.

The US, however, tried to mark itself out as different.

Last week Richard Holbrooke, the US special representative for Afghanistan and Pakistan, said, “The people of Pakistan will see that when crisis hits, it’s not the Chinese, it’s not the Iranians, it’s not the EU, it’s the US that always leads.”

Anxious to show that the US is a friend of the Pakistani people, he said the government would grant $87 million in aid and offer 19 helicopters to ferry supplies to those who have been cut off. But Holbrooke’s motivations are strategic, not humanitarian.

Pakistan is on the frontline of the “war on terror”. US aid is being used to buy friends and influence people.

Aid will continue to flow as long as Pakistan’s rulers allow the US to site its bombers on its airbases, drop drone bombs on its villagers, and use the Pakistani military to make war on its own citizens who have the misfortune to live near the border with Afghanistan.

Agenda

The link between aid and a wider imperialist agenda can be traced across the globe.

A report by the London School of Economics into Western aid for Afghanistan shows that an estimated $2.3 billion dollars a year pours into the country.

But according to Professor Jude Howell, “Much of this aid is being used to tackle the increasingly violent insurgency in southern Afghanistan, rather than being targeted at areas where humanitarian needs are most acute.”

The report notes that by helping the West administer funds and projects, charities and non-governmental organisations (NGOs) are increasingly being drawn into the conflict as participants, making themselves targets.

Particularly in the era of the “war on terror” the key question over where and how much aid is delivered often comes down to the readiness of governments to back US military adventures.

Egypt and Ethiopia, for example, have been rewarded for playing a central role in US strategy.

Aid has always been a weapon in the hands of rich nations that want to impose their will on the rest of the world. It is a method of rewarding allies and punishing those who dare to question the global order.

Aid can be limiting in two ways. First, by being “tied” to purchases from the donor country’s firms, and second, when it is made “conditional” on certain economic or political behaviour.

According to a 2006 report by the OECD, a body representing many of the world’s leading economic powers, about 58 percent of overseas aid includes an obligation to buy goods or services from the donor countries.

This can raise the cost of development projects by as much as 30 percent.

Much of the “gifted” money ends up in the hands of consultants from Western firms, who “advise”

governments on how to spend the money. Unsurprisingly, their suggestions tend to favour companies from their native countries.

In recent years there have been moves to end the most obvious means by which donations are tied into trade, but conditionality remains.

One example is donor countries insisting upon the privatisation of state assets, like water and electricity, coupled with the liberalisation of markets—opening the door to Western exporters.

Influence

This approach, advanced by the World Bank and the International Monetary Fund (IMF), was supposed to be the route out of poverty for countries that accepted the doctrine.

But they have failed spectacularly.

The developing countries that liberalised their economies the most have been hit hardest by the domino effects of the food, fuel, climate and financial crises they played no part in creating.

Ghana is just one of many examples. At the beginning of the last decade it was praised by donor countries for its democracy and the openness of its economy.

As a result it was expected that the country would soon graduate from “poor” to “middle income status”.

But Ghana was hit hard by the recent global financial crisis, and was forced to seek aid. In 2009, the World Bank stepped in to help with loans totalling $535 million.

But, according to the European Network on Debt and Development, many of these lines of credit were only granted after Ghana’s government accepted tough conditions.

These included stipulations on how oil giants drilling the country’s new Jubilee oil field would be taxed, and guarantees that multinationals could profit from the electricity market.

The World Bank wanted the government to cut subsidies to state energy firms—despite the impact on prices and Ghana’s poor—enforce redundancies and slash public spending.

The result, according to the report, has been to throw Ghana still further into recession, creating misery for millions.

Conditionality remains, but there has been a shift in the ideology over the last 20 years.

Poor countries are less likely to be lectured that private is good, and public is bad—instead they are instructed on the need for “good government” and “rooting out corruption”.

That the countries that have given us the banking and political scandals of recent years should lecture anyone on governance beggars belief, and completely ignores the way the West has encouraged a culture of corruption.

During the decades of the Cold War, the West was anxious to prop up dictators who looted their countries in the hope of keeping them out of the influence of the Soviet Union.

In those countries which did not align themselves with Washington, corruption was seen as an act of defiance by private interests against the overweening strength of the state and its regulation.

Today, the practice continues, with leaders being offered support so long as they allow multinational firms to subvert laws, evade tax and fix prices.

These practices rake in far more cash than a dictator has ever stashed away in a Swiss bank account.

With these facts in mind, it is clear that socialists cannot simply demand more aid.

After all, our governments may link their offerings of assistance to demands for more neoliberal “reform”, or make it conditional on being a continuing part of the “war on terror”.

But does this mean that we should, as some radical writers have urged, denounce the whole concept of aid as imperialist?

Pressure

To do so would be a mistake.

Aid is a political weapon in the hands of the ruling class, but it remains true that the imperialist nations do owe the nations they plundered and should pay for the disasters they have caused.

Continued pressure can push the IMF and World Bank to grant still further concessions, and each victory is a blow against our rulers and a benefit for the poor in developing nations.

Millions of people around the world watching the crisis unfold in Pakistan will want to know why the US has handed over billions of dollars in military aid, but can only find a fraction of that for vital humanitarian aid.

And many thousands of workers will reach into their own pockets to show their solidarity with the Pakistani people.

As socialists we demand more than just the reform of aid packages. The danger with aid is that it assumes a superior and humiliating attitude towards those who receive it.

We demand aid without strings, and we demand more aid.

But our model is not charitable aid but solidarity between workers across the world.

In Britain we face different immediate problems to Pakistani workers.

But we are exploited by the same system, and need to fight it together across the globe.


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Features
Tue 24 Aug 2010, 17:30 BST
Issue No. 2216
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