Thursday, October 14, 2010

Foreign aid

Several articles on foreign aid to Africa, not necessarily about Zimbabwe.

Al Jezeerah reports that some UK banks cooperated with Nigerian corruption:

High street banks in the United Kingdom could have helped fuel corruption in Nigeria by accepting millions of dollars in deposits from dubious politicians in the west African nation, an international corruption watchdog said.

In a 40 page report released on Sunday, Global Witness said that five leading banks have failed to adequately investigate the source of tens of millions of dollars taken from two Nigerian governors accused of corruption.

"Banks are quick to penalise ordinary customers for minor infractions but seem to be less concerned about dirty money passing through their accounts," Robert Palmer, a campaigner at Global Witness, wrote on the group's website.

"Large scale corruption is simply not possible without a bank willing to process payments from dodgy sources, or hold accounts for corrupt politicians."

Global Witness acknowledged that in accepting the money, Barclays, NatWest, Royal Bank of Scotland (RBS) and HSBC, as well as Switzerland's UBS, might not have broken the law, but noted that the Financial Services Authority (FSA) must do more to prevent money laundering through British banks.

In a related article in Medical News Today that summarizes several stores:


U.S. Should Purchase Food Aid From Local Farmers In Africa

In a Richmond County Daily Journal opinion piece, Yifat Susskind, the policy and communications director of MADRE: Demanding Rights, Resources and Results for Women Worldwide, argues that "the U.S. should buy food aid crops directly from local farmers in Africa."

no problem, except of course that this disrupts the ordinary food distribution system already in place, and distorts the price of rice for those who aren't in the famine area or refugee camps.

It was, after all, the cause of the Bengali famine during World War II, where the British bought up all local crops (so that if the Japanese invaded they would starve) and as a result the price of food in that area became so high that a quarter million starved.

In the Irish potato famine, a similar exacerbation was caused by local farmers exporting grain (to feed the poor in the UK) while importing only a small amount of maize (which is hard for malnourished intestines to digest) for locals.

They also cite another article that aid should be given in grants rather than loans:

In a Boston Globe opinion piece, Robert Rotberg of Harvard's Kennedy School of Government, ...

Rotberg argues that the U.S. government should "stop lending to recipient countries" and "switch its foreign assistance to making grants." According to Rotberg, conditions that allowed "deserving countries to borrow on generous terms to improve their prospects for growth ... added to a poor nation's debt burden." A better approach "would be to make only grants and condition their renewal on accomplishing the goals of the grant."

and of course, grants would allow local politicians to steal the aid easier than if the lending banks were watching them.

An example of the problem can be found in our local Inquirer, where this article discusses a grant of direct aid to poor families.

Even Mr. Aquino’s cousin-in-law has cast doubt on the CCT program.

Pangasinan Rep. Kimi Cojuangco, wife of Mr. Aquino’s cousin Mark Cojuangco, said that when she was mayor, she found that certain officers of the DSWD had been giving the cash assistance to their relatives and other individuals who were not among the poorest of the poor.

Cojuangco said the families that received the money tended to spend it on alcohol and betting on the illegal numbers racket “jueteng.”

During the deliberations on the DSWD budget, she also said the CCT had been a source of conflict between neighbors, who get jealous of those selected to receive the monthly stipend.

and the Inquirer includes this editorial:

MANILA, Philippines—Several lawmakers continue to cast doubt on the conditional cash transfer (CCT) program of the Aquino government, with one of them even saying that the end beneficiary of the program’s huge budget would be the jueteng lords.

Pangasinan Representative Kimi Cojuangco said that stringent measures should be in place to guarantee that the money will trickle down to the poorest families in the country.

“Coming from the province of Pangasinan, the first thing the mother will do when she gets the money is to buy shoes and groceries, then the husband will go out and buy some gin, and whatever is left of the money is for betting, he would probably go and play jueteng,” said Cojuangco, former mayor of Sison town in the province.

that is, of course, assuming that the poor families actually get the money after all the politicians take their cut of the pot.

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