Canadian Politics from Canada's Centre

Monday, February 26, 2007

ReThinking Foreign Aid

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Blogroll partner Xavier Dube of Keep Right has an interesting post up called Three Strikes for Foreign Aid. While Xavier makes a good critique of foreign aid's (FA) problems - mainly that most FA dollars don't work to alleviate poverty and instead go to enrich dictators and despots - I have to disagree with his conclusions. I was writing a comment and decided instead that it would make for interesting reading for Centrerion readers. Here's my reply to Keep Right's author.

Ironically, Xavier, you oppose the "blanket solution" of foreign aid yet support a blanket solution of capitalism and globalization. While you're right that those two forces have worked in some places, they've been miserable failures elsewhere.

Consider the case of Bolivia, where the water system was privatized with disastrous consequences. That's part of what got an extremist coca grower like Evo Morales elected. Capitalism with little government intervention.

Craig Kielburger, founder of Save the Children recently spoke at a conference I was attending. He cited this story of a Kenyan village where this child had to walk miles to fetch water, then carry it back in heavy containers - a real burden if ever there was one. Yet his village had a well! Some western company had made a deal with the government that they'd have exclusive access to the water in the region so they could grow flowers (for export to the West). So the government capped the well. Here you have investment and jobs created for kenyans. But it was clearly not a conscionable solution - une solution equitable, as we say in French.

So while I agree with you that lots of aid dollars do get wasted on despots, and I also agree that we should focus on economic development rather than charity, I draw a different conclusion from you. We shouldn't just "end" foreign aid.

Foreign aid needs to be carried out in a smarter manner, with a focus on encouraging local entrepreneurship and SMEs/PMEs. Making the businesses responsible to the communities in which they exist and to their employees (employee stock ownership plans might be particularly useful) will help not only the founders escape from poverty, but will also help the community. "Let me help you help yourself," in other words. Note: I can't claim the idea as my own, it really comes from a book I just finished called Small Giants, about financially succesful companies that are also helping their communities prosper.

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