The Problem with Foreign Aid

In the summer of 2014 I visited Malawi, a small country in the bottom-center of Africa, to help with the construction of two classrooms, a teacher house and a girl’s changing room. It was a really special experience, I learned a lot from it. During my stay in Malawi, I also visited a village where other people from the same organisation had built a school two years ago. The citizens of that village where still really happy with what the organisation had done for them, they said their school was an example for other villages.

However..

During my Global Political Economy and Construction of the Third World classes, they say that foreign aid is not as good as many people think. Therefore, I planned on doing some research. Former economist, Dambisa Moyo states: “A constant stream of “free” money is a perfect way to keep an inefficient or simply bad government in power”. He argues that western organizations, in an attempt to help, often abandon local initiatives. For instance, shipping over American food to Africa, leaves a lot of local farmers with no business. In addition, when there is a lot of aid money coming in, the prices of products in a country rise, that make the export prices go up. Moyo says that in order for a country to work there should be a well-organized civil service and a transparent and responsible government, together with jobs and people’s faith in their countries future. However, when they get all the aid they want for free, there is no motivation to create more transparent  ways. A lot of aid money, also in Malawi, ends up in the pockets of the most influential people. But even though the money flow does not stop (2009).

But does this mean we, as in the more developed western world, should not help out less developed countries with problems? And was my time in Malawi then a waste? I think not. A lot of developing countries are nowadays dependent on foreign aid (Burnell, 2008; 98). Therefore, stopping with foreign aid would have disastrous effects. I agree with Moyo that aid should be given in return for something else. For instance, in 2014, 40 percent of the foreign aid in Malawi was withdrawn because of corruption accusations and consistently plundering of state resources by politicians and government officials. They get the 40 percent back when the government makes sure there is ‘fiscal discipline’(The Guardian, Kainja). I think this is a good way of stimulating the government to do good for their country and showing that western countries are not giving away money for free.

Regarding my trip to Malawi, I think actually going to the country where you invest money in at least makes sure that your money does not end up in the pockets of the wrong people or abandons local business people. I think it was really valuable to see ‘poverty’ (or what we perceive as poverty) with my own eyes and really talked to the people there. Moreover, I think that the people we visited in Malawi now also have another perspective of people from western countries. Of course, it would be much better if governments started building schools themselves and building a school does not mean the children that go there afterwards will have a job. But I do think talking with people from completely different countries and backgrounds really helps with understanding and cooperating with each other and maybe also causes people to have more faith in their own country.

To make a conclusion out of this all, there are many sides to giving foreign aid. Just giving a lot of money for free will not help the country stand on its own feet. Asking an improvement in the government before giving the aid, might help to make the government more transparent and responsible.   Moreover, talking with the community before providing aid, might help not to disturb any local initiatives.

Reference List:

Burnell, P. (2008): “Foreign aid in a changing world” pp. 503-507 In: Desai V. & Robert B. The comparison to development studies. 2nd ed. Publisher: Hodder Educa tion

Kainja, J. (2014): Malawi tightens budget strings to placate foreign aid donors: theguardian Site:http://www.theguardian.com/global-development/2014/sep/10/malawi-budget-foreign-aid-donors-mutharika [retrieved: 12-12-2015]

Moyo, D. (2009): Why Foreign Aid Is Hurting Africa. In: The Wall Street Journal. Site: http://www.wsj.com/articles/SB123758895999200083  [retrieved: 12-12-2015]

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