Foreign aid: a transfer from poor people in rich countries to rich people in poor countries
The issues of foreign aid have always involved in corruption and inefficiency since the beginning. However, foreign aid did have a strong impact on the developing states back in the day, contribute its efforts to help these countries become the “Asian tigers” such as Singapore, Hong Kong, and South Korea. Still, the political economy of foreign aid is a controversial topic not just in the US but also in European countries. Recently, the former member of Congress Peter Smith (R-VT) has shared some of his thoughts with us on the aspect of aid in international political economy. Sub-Saharan Africa is the region to receive the most foreign aid from Britain and France. It is also the place where frequent civil wars occur among rebel military forces. This suggests the political instability is inevitable. According to Transparency International, Sub-Saharan African countries happened to have the highest corruption rates with the average of 32/100 CPI score in the region. Indirectly, foreign aid has contributed to the development of political factions here. Terrorists are now adding wings thanks to the aid of international organizations, NGOs or IGO alike. In terms of democratic erosion, experts might argue that foreign aid, especially economic aid for Sub-Saharan Africa has no effect on democratic consolidation.
Foreign aid is a major phenomenon developed after 1945, mainly due to three factors. The first factor is the success of the Marshall Plan that the US supports Europe. Second, the wave of independence of Asian nations in the late 1940s and Africa in the 1960s created a new impetus for development aid for these countries. The third factor is the Cold War when superpowers use aid as a tool to expand influence and help establish “friendly regimes” with recipient countries. Foreign aid implies a relationship between a party that is an aid beneficiary and a party that is a recipient of aid. Although the country is the most important subject in foreign aid relations, international organizations such as the World Bank (WB) and the International Monetary Fund (IMF) also play an important role. However, many of the countries in South Africa did not receive proper foreign aid. 195 countries were being analyzed to prove the relationship between foreign aid and poverty was not effective, despite their economic growth. With the US, foreign aid has been a success after the establishment of the Marshall Plan. However, since 2000, the amount of aid has increased many times and even more when rebuilding European infrastructure after World War II. But aid increased does not mean that it will help change political institutions and build democracy. Due to the weak state authority in management and the emergence of autocratic politicians, plus the weakness of donor control, foreign aid has failed to achieve its goals.
Because African countries are limited in their ability to set aid objectives, in terms of aid reception and use, it depends on the binding conditions of donors. As a result, aid to Africa for the purpose of development is small but primarily serves the donor’s own purpose. In particular, US aid is intended to exert a comprehensive influence in Africa, from politics to economy – society; EU aid to Africa aims to strengthen its role and political influence, promote goods into the continent and limit African migration to Europe; Chinese aid is aimed at bringing people to hamlets to build villages and exploit resources.
Corruption from aid also contributed to curbing the process of building a democratic government. In 2008, Malawi’s President Bingu Mutharika bought a Dassault Falcon 900EX immediately after receiving the latest aid from the EU, while Ugandan President bought a Gulfstream G550 jet and built his lavish mansions with EU aid money while most Ugandan people live in poverty. African countries are known for their rich soil and abundant resources (ex: Lithium). Agricultural production is a major strength of the black continent but the weakness in resource management is adversely affecting the agricultural sector. It is sad to see that the assistance of the international community cannot help the people here get rid of poverty due to corrupt political institutions.
African Agricultural Status Report 2018 said many African countries are investing in large projects to be able to quickly receive “cash on hand” while ignoring small farmers who are contributing to supply. food for the whole country. The report warns that African countries will struggle to develop their economy and reduce poverty unless there is a link between high-level political will and government action to help small-scale farmers. In Kenya, corruption in the agricultural sector under the manifestation of fake fertilizer distribution to imports of contraband food products flooded the market adversely affecting local farmers.
In the struggle for democracy, corruption has become a disease that undermines the equality and freedom of people living in sub-Saharan Africa. Moreover, efforts to repel corruption are not continuous and coordinated among donors and local authorities have slowed the pace of economic development in Africa in general, in which democratic construction process is more fragile than ever.