By Suzie Capelli, Posted Dec 05, 2006
Sections: Development Intro Aid Not Trade Moral Dilemmas Aid Workers Handout Mentality Whites, the Forgotten Tribe NGO's and the Politically Correct False Advertising The Church & HIV Donor Disorganisation Humanitarian Aid - A Necessary Evil
Mini-guide by Suzie Capelli
One of the more interesting characters I have met in my time in Rwanda was an American called Nick. When we met he told me he was travelling in Africa working for an American think-tank which promoted free market ideology. When I suggested that his organisation would be better served promoting such ideals in Europe and US, he knew he had found a kindred spirit. He ended up staying with me in Kigali for some time and we had many fruitful discussions.
Have you ever wondered why, with their cost of labour being so cheap, that we in the developed world don’t see more commodities from developing countries in our supermarkets?
Most of Africa and indeed many developing countries worldwide are still heavily agriculture dependant. The process of development encompasses a move towards secondary (or manufacturing) and tertiary (or service) industries. In order for agricultural economies to gain capital to spend on development they must be able to sell their goods (raw and processed) on an open market.
Institutions like the World Bank and the IMF (International Monetary Fund) make having an open market, free of import tariffs, a pre-condition of receiving aid. However the West only believes in the kind of “free market” which allows it to exploit poorer nations.
In order to protect its own farmers (and other primary producers) many developed nations have tariffs and other barriers which disadvantage true free trade.
e.g A developed country might allow the importation of raw goods, such has coffee beans, but would place an import tariff on ground coffee which makes it uncompetitive. Result: the processing of raw materials, along with the jobs and value add, takes place in the rich country. The IMF then forces poor countries to remove their import tariffs so that their own processed products are more expensive than the mass produced western ones. Hence why many Mexicans drink Nescafe.
Contrary to some liberal left wing thought, true globalisation stands to benefit poor countries by giving them access to real open markets. The problem is that the globalisation in practice at the moment is a highly exploitative one.
So now that we cannot, for the sake of our farmers, actually afford to trade with developing countries, we aid them instead. And we often aid them in ways which benefit ourselves…
I once read somewhere that no one buys African grain, not even Bob Geldof. The money raised by Band Aid in the 80’s was spent on maize meal from elsewhere; some of it came from US and European food stocks. This helps the farmers of the developing world by providing a dumping ground for surplus produce which cannot be released on the market without causing a price crash.
The Band Aid money could so easily have been used to purchase produce from somewhere like Zambia – that way the region could have got a two-fold benefit from the trade as well as the aid.
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