Help Not Wanted
March 5th, 2007
Wow.
Who would have ever thought that the poor and developing countries of the world would have the option of turning down the IMF, World Bank, Asian Development Bank, African Development Bank, etc. for financing?
Well, per this NY Times article [subscription may be required], “Help Not Wanted,” that day has arrived. See also related NY Times Op-Ed piece, “Patron of African Misgovernment.”
The author of the article points out that countries such as China, Saudi Arabia, Venezuela, etc., are pushing the “good guy” foreign aid programs out of the market through their own activist aid programs with no bids, no conditions and no need to reform attached. The article strongly criticizes these countries as “rogue states” for doing this, and predicts that their alternative development model will “create a world that is more corrupt, chaotic and authoritarian.”
Perhaps, but geeeezzz, the IMF, World Bank and the like are certainly no saints in this regard. See, e.g., this recent Wall Street Journal article on the African Development Bank, Continental Divide: U.S. Stirs Debate Over Africa Bank. See also/read, Confessions of an Economic Hit Man by John Perkins and/or just about anything written by the academic adversaries of economist Jeff Sachs at Columbia University.
I read this NY Times article three times to try to get my arms around it. Each time I finished something just did not feel right, and my gut and brain still tell me that the jury is still out on this issue. For example, it seems to me that many of the African countries have tied their wagons to the West and its instituions for the past three centuries and have little to show for it. The author ignores this point and that makes me a tad suspicuous of why the article and its author are so quick to come to the defense of the foreign aid agencies that many contend have done a crappy job helping poor countries improve over the years.
So, why not give the Chinese and others their shot, even IF their intentions are money, international politics and access to raw materials?
Your thoughts? Where is “truth” in this mess? These are less than clear questions and issues for those of us from the legal world.
Entry Filed under: Pre-Departure, China, Misc.
4 Comments Add your own
1. Joe Callinan | March 6th, 2007 at 12:59 pm
If anyone is interested in this post or topic, I suggest reading Confessions of an Economic Hit Man. In this book the author, John Perkins, describes how his job was to go to developing countries and produce bogus economic reports for the World Bank and other large multinational companies purposely trying to take advantage of the country and bring it into financial ruins.
I agree with Carr, these countries are not refusing aid without a reason. They have been taken advantage of too many times by these banks and other countries.
2. Peter Thelen | March 6th, 2007 at 5:51 pm
I have to second Joe’s recommendation of Confessions of an Economic Hit Man for anyone who is wondering how all this IMF/World Bank stuff works. It’s very accessible and an engaging read.
I agree with both Joe and Prof. Carr that there is no valid reason Chinese foreign aid programs should not have a chance to show that they can do just as much, if not more, to help with the plight of developing countries. Let’s face it, the foreign aid market is just that, a market. And right now, Chinese foreign aid programs are showcasing more appealing programs to developing nations. I realize the IMF and World Bank are not used to such competition, but they must adjust if they intend to stay relevant.
And if the author of that article thinks the US, by way of the World Bank and IMF, no longer exploits indebted countries for raw materials and to further national interests, he is sadly mistaken. At least China is honest and unabashed in presenting its motives.
3. Jared Samarin | March 7th, 2007 at 10:11 pm
I have no experience with Confessions of an Economic Hitman, but I would certainly agree that if China would like to try their hand at economic support programs why stop them. It seems entirely reasonable that they have something to offer developing and least developed countries climbing the economic ladder. This is not to say that governments should not perform their due diligence when accepting aid from China the same way that they should when accepting aid from anyone. Nor is it to say that developed countries should not be leary of the motivation of China.
I did find in my reading of Travels of a T-Shirt find that what historically has been more effective than foreign aid is foreign investment and market opportunities. A key example is Tanzania and the market for used clothing. This market evolved naturally from the consumer culture of the United States and now provides an entrepreneurial opportunity for the people of Tanzania. These clothes don’t represent the same hand out as foreign aid and it comes with no strings attached just opportunity and risk. This occured after foreign aid did little to assist the country.
I’ll also agree with Peter that foreign aid is a market just like anything else and the established players will need to learn how to compete with the upstart.
4. James Towers | March 22nd, 2007 at 11:53 pm
So the message of Confessions of an Economic Hitman seems to have been lost. If you have read that book, how can you be in favor of letting China or any nationalist affiliated organization give out loans? They are doing the same thing the US has been doing (ie- making countries so indebted to us that they cannot say no when we ask them for favors). Essentially, these countries would be saying, “Hey this crook is robbing us, we should find another crook who might not steal as much from us.” Shouldn’t some other solution be reached? The forgiveness of third world debt is a start. At least the IMF and World Bank make some sort of attempt to be nationally independent, even if they dont always do the greatest job of it. So great now there will be a market for robbing people. Shouldn’t reform and not the perpetuation of a corrupt business practice be the goal?
Leave a Comment
Some HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
Subscribe to the comments via RSS Feed