Foreign aid worsens the situation faced by victims of natural disasters, perpetuates misery and suffering for years afterward, and provides governments with additional tools of oppression. The current Tsunami crisis makes it critical to review Murray Rothbard’s “Doing God’s Work in Somalia,” a detailed account of how foreign aid caused further death, destruction, and ultimately a botched military intervention in a poor African nation.Rothbard explains how the racket works. The US government starts to deliver large quantities of food and supplies to the affected refugees and disaster victims. Quickly, the local government and its cronies/thugs recognize an opportunity. They assert control over aid distribution and/or steal large portions of the aid. In areas of religious or ethnic strife, the food aid is used to exert power over minority groups or dissidents opposed to the existing regime. Food and medical equipment may be deliberately withheld in order to starve and kill disfavored populations, while it is used to reward allied groups and factions. In order to maintain their political hegemony, local government actors have every incentive to perpetuate crisis conditions.
In Somalia, explains Rothbard, “the food ‘crisis’ has been deliberately created by the Somalian government – by [Siad] Barre and his successors – in order to exert control over the Somali population, to tell them when and who shall or shall not eat.”
It should be noted that Aceh, the hardest hit region of Indonesia, is home to a secessionist movement that has long been brutally suppressed by the Indonesian military. The people of this region are acutely vulnerable to the foreign aid syndrome that has been repeated over and over again in Africa.
In Somalia, foreign aid created massive economic distortions that prevented the people from recovering from the initial disaster. Rothbard cites ex-relief worker Michael Maren, who witnessed first hand the role of food aid in Somalia:
“The crucial point, Maren concludes, is that ‘reckless use of food aid causes famine. It depresses local market prices and provides disincentive for farmers to grow crops.’ All this makes the food shortage worse, and causes greater calls for food relief; and so the well-meaning foreign intervention grows and cumulates, fueled by agency venality, and causes the spiral of famine-aid-famine to get worse and worse. Until finally the marines land to try to solve the problem.”
Even private relief agencies, after initially contributing necessary short term humanitarian assistance to refugees and famine victims, eventually became part of the problem of unintended consequences in Somalia.
“[T]he real objective of these agencies, Maren has concluded, is to raise money. These outfits are essentially rackets. Even though sending food hasn’t really helped, what these agencies can do best is to raise money. ‘Aid,’ Maren declares, ‘is a business. It is a business in which people make careers, earn a good living, get to see interesting places, and have great stories to tell when they get stateside. It’s a business that has to earn money to pay its executives, pay for retreats and for officials to attend conferences in Rome, buy four-wheel drive vehicles, buy advertising time on television. It’s a business that makes money by attracting clients, i.e., starving, needy people.’”
Honorable humanitarian groups like Doctors Without Borders have informed donors that they already have sufficent resources to cope with the immediate needs of the Tsunami victims. Be wary of any governments (i.e., the U.S.) or relief organizations that continue to take advantage of the latest disaster.
For further info, see Michael Maren’s book, The Road to Hell:The Ravaging Effects of Foreign Aid and International Charity.
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As you point out, the Somalia crisis was far more man-made than natural disaster, and so hardly similar. Are you really willing to suggest halting all aid to tsunami victims based on the slanted anecdotes of one disaffected Peace Corps volunteer in a different part of the world suffering from a very different tragedy ten years ago?
I’m ready and willing to eliminate all government aid, yes. All if it, of any kind. Right now.
What individuals choose to contribute is up to them, not me.
I am most willing to halt government-to-government “aid” programs that waste scarce resources and cause death and suffering — as difficult as that may be to comprehend. The highly credible Maren, who had extensive experience with the Agency for International Development as well as the Peace Corps, is not the only basis for opposing foreign aid. There is voluminous documentation of the fact that government aid agencies are unaccountable and ineffective. Moreover, there are scores of reports on the failure of foreign aid programs all over the world, not only in Somalia. These failures occurred in famines, political refugee situations/wars, and natural disasters. We can ignore these failures and accept the government’s slanted denials of guilt. Or, we can take action to hold the aid establishment accountable for its incompetence and try to prevent it from inflicting any further harm on the innocent, the hungry, and the oppressed.
Don’t private donations from foreigners count as “foreign aid?”
btw: “AdamSmithee” appears to be a brilliant username. Is this a formal indication of protest against the low-quality economic “production” within which we are all trapped?
I’m with Curt Howland. If our governments regularly screw up everything they touch right here at home, how can they possibly improve the condition of people who are 10,000 miles away?
And as the article points out, most “non governmental” aid agencies are in fact heavily funded by governments, so I would not even encourage NGOs to get involved.
Consider the situation in southeast Asia: the houses were all built out of local materials by local builders. As high as the death toll was, it was only a tiny fraction of the population of these countries – so the local construction industry will be able to do all of the rebuilding. Highrise hotels would have been built with a lot of private engineering and financing from offshore, so these foreign experts will come back whenever and wherever required (and I would be amazed if these modern resorts had no insurance – the investors wouldn’t have allowed it). The cleanup will require mostly lots of labour, something which the survivors will have plenty of, along with plenty of motivation to get it done quickly. The food production of the affected countries was not affected very much on the whole, so each country should be able to keep people fed on its own. Thanks to subsidized western agriculture industries, staples are as cheap as you could ask for, so it will be easy for local entrepreneurs and perhaps some local charity to buy more food on the open market. Specialists such as electricians, plumbers, boatbuilders, etc. will converge on the affected areas from nearby, the same way they converged on Florida after the last hurricane season. Some will get paid and some will donate their time. Extra medical care will be required for some time, but private foreign doctors groups (as well as freelance medical volunteers) are probably already working there in droves.
Think globally but act locally, as the eco-warriors say.
I live in Taiwan and noticed how Taiwan’s government uses this tsunami as an opportunity to dump (donate) 1,000 ton of excess rice it is obligated to import because of its accession to the WTO. Taiwanese rice can’t compete with imported rice and government didn’t know what to do with all the imports it bought. The solution: give it to the victims (and ruin the local farmers there!)
Tellingly, Thailand doesn’t want aid, but tourists. And we have heard no voices in the west to outsource some factories to Sri Lanka or Indonesia in order to give them work. So, the real good deeds would be plan a holiday in a 5 Asian resort and buy more goods coming from these hard hit countries.
Vanmind –thanks, you’re the first to get it. Apparently there is limited overlap between readers of econ blogs and film buffs. Sigh.
As to the voluminous documentation about the ineffectiveness of aid, there are many times it has failed, indeed. But laissez-faire in crises doesn’t have all that strong of a track record either. Think about the Irish potato famine.
“Think about the Irish potato famine.”
Sorry, AdamSmithee, but the famine had LITTLE to do, if at all, with laissez-faire economics and more to do with politics. Please read:
http://mises.org/freemarket_detail.aspx?control=88
Some commentators questioned the relevance of the Rothbard Somalia example, a “man made disaster” to the Aceh siutation, a “natural disaster”.
The distinction between the two types may be irrelevant as far as the influence on conflict downstream. There is even a ‘local’ (at least nearby) precedent.
There is a real possibility that this disaster may lead to a revival of Aceh separatist and other secessionist and indeed Islamist forces within Indonesia. This has happened before. Check out Simon Winchester’s Krakatoa, reviewed here.
‘The great blast also sounded the death knell for colonial rule in Indonesia. Radical mullahs preached that the eruption was the revenge of Allah against the archipelago’s infidel rulers and those who served them. They declared jihad in 1888, and there followed an orgy of killing directed at European men, women and children. Though the rebellion was soon crushed, Winchester notes that today it “is regarded very much as a way-station on the route to eventual Indonesian independence”.’
In this story – Paper Money Can’t Save Billions From Poverty
The writer thinks that too much foreign aid is wasted and in the end it will not do what was intended.
The U.N. recently announced that the world population will grow by 40 percent in the next half century.
The U.N. believes that wealthy nations must dramatically increase foreign aid to underdeveloped countries in order to stave off a humanitarian disaster that could result from this third-world population explosion.
Foreign aid brings mostly corruption, while exacerbating the underlying problems. The United States and other wealthy nations should shun the billion-dollar publicity-stunts and instead commit to developing democratic institutions that foster free markets.
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