Balance the Budget, Prune Development Aid

The Dutch Leftist flagship newspaper De Volkskrant recently published a series of proposals by writers considered experts in their fields, how to balance the budget. Here's development aid specialist Arend Jan Boekestijn's contribution (original article).

"Cutting Back on Development Aid"

Stop exporting good governance and nation building, and start supporting private enterprise!

It hurts having to make cut backs. Yet there are policy areas in which millions of people could benefit from it. Development aid is an example. Imagine these programs did not yet exist. As these aid programs really hurt poor countries, surely we wouldn't set them up like they are today. There are five problem areas.

- Caption: theme of Ending Poverty and Inequality - 

Aid addiction
First, there's aid addiction. If security is outsourced to the UN, and donor countries take care of education and health care, what do African governments have left to do for themselves? An average developing country is receiving hundreds of delegations each and every year offering money, and each making different demands in return.

How can recipient countries learn to accomplish anything by themselves? This problem can only be solved by extensive cut backs on development aid expenditure. The Netherlands, the Scandinavian countries and Luxembourg together spend twice the EU average. If we truly want to promote self reliance we shall have to make cut backs.

Secondly, donor money has the effect of appreciating the local currency; as a consequence it undercuts exports and trade - the last thing these countries need.

Negative
In the third place development aid has a negative effect on democratization. Third world countries are suffering from a Boston Tea Party in reverse. In 18th Century America the maxim was "no taxation without representation". Recipient countries get so much donor money that there's no incentive to raise taxes. As a consequence there's also no trigger for representation. Only if we make cut backs democracy stands a chance.

In the fourth place, there's an unclear corrolation between aid and development. Aid per se doesn't lead to growth. That's a very good reason to rethink how we organize these programs.

Good governance
Also we have not been able to establish good governance. Most third world countries are closed societies. According to Nobel Laureate Douglass North these governments are primarily occupied with violence control, not with their country's development (read also by this author "How To Put Development Aid to Work"). North posits that features of open societies, such as democracy, the rule of law and civic society cannot be exported one on one to closed societies.

Even worse, enforcing these elements may even be counter productive. For example, if elections are being held in Afghanistan, a country without strong institutions, this leads to vote rigging. Good governance just cannot be exported.

The present Dutch policy, as well as the EU's and the World Bank's, do not take these considerations into account. Budget assistance consolidates evil regimes and fosters aid addiction. Good governance fails. And the ballot box grows corruption.

So should we abolish development aid, as Dambisa Moyo proposes? No, it's an illusion to think that third world countries will be able to procure loans for their investments on the regular capital market. So what can we do?

The only way to foster growth is to concentrate on private enterprise. No one ever got rich off of charity. Stop funneling aid to dubious regimes, but invest in private citizens with knowledge and expertise so as to empower them to earn a living. Also in the field of agriculture much can be done. So let's  reorganize the Ministry. Stop exporting good governance and stop nation building - concentrate on private enterprise.

Market access
Reforming EU agricultural policy by bringing it back to the level of member countries will open up European markets. NGOs are often led by people with very little notion of private enterprise. Audits and evaluations are being side-stepped. So  force them to work more efficiently by dismantling the present edifice of subsidies. Fund some twenty procent on a case by case basis and let them fend for themselves in the charity market.

Enforce independent policy evaluation on all activities. See to it that climate change policies do not lead to a fresh multi billion dollar stream to developing countries they cannot absorb. Recognize that the top-down approach of the Millennium Development Goals project is bankrupt. Replace it with bottom-up, independently evaluated projects.

Be critical of plans such as Paul Collier's to militarize aid. From our own history we know that conflict constitutes nations. Nation building is precisely what Africa needs.

In short, private enterprise will foster sustainable growth which will eventually produce a middle class that will demand good governance.

Related:

- Arend Jan Boekestijn's page
- "How To Put Development Aid to Work"

How to Put Development Aid to Work

"The Price of a Bad Conscience"

by Arend Jan Boekestijn (original post in Dutch)

A comedy of errors. Time: one Saturday in the year 2009. Setting: the palace of President Kagame of Rwanda. Characters: President Kagame of Rwanda and Dutch Minister for Development Cooperation Bert Koenders. Subject: Koenders' wish to save the development cooperation with Rwanda and Kagame's wish to severe all ties with the Netherlands.

Koenders has had better times. Lumbered with a predecessor's feelings of guilt  - why didn't we stop the genocide? - Koenders finds himself caught up in a relationship with the victims of that tragic event. But regretably they aren't angels either. Kagame and his good, old buddy Museveni of Uganda have effortlessly swapped  the role of victims for the one of perpetrators.  In the war in Eastern Congo five times as many people lost their lives as in the genocides of Rwanda and Darfur combined. Small wonder tax payers and politicians in the Netherlands, the UK and Sweden are questioning the ongoing need to subsidize Kagame.

Couldn't Koenders' predecessors have seen this coming? Not quite. Politicians aren't clairvoyants. Should the victims have been left to fend for themselves?

It's much more interesting to draw lessons from the demise. Why did the Netherlands, the UK and the US believe that they could control Kagame? The answer is astonishingly simple. Our Governments are guilty of an unhistorical approach to the Rwandan question.

For proper comprehension one must study the new approach laid out by Nobel Prize Laureate and Economic Historian Douglass C. North in cooperation J.J. Wallis, S.B. Webb and B.R. Weingast in a World Bank Paper (4359), suitably entitled 'Limited Access Orders in the Developing World: a new approach to the problems of Development'. Development aid workers of all countries, pay attention now: you are on the verge of experiencing a paradigm shift.

North et al. posit that societies will develop various strategies of reducing violence; and how they are coping is of great influence on their potential for growth and development. Elite infighting has negative economic effects on everyone. In primitive societies of hunter gatherers there's a distinct lack of specialization, but an abundance of violence. That's a drag on a man in the long run.

One needs to give it a rest every once in a while; a good night's sleep in indispensable to that effect. This is how 'primitive societies' develop into' limited access societies'; violence is brought under control by violence specialists contracting not to use force against each other.

How do they do this? There's a measure of stability as long as the division of the spoils is reflecting the balance of power; vassals may be thrown a trinket or two. As long as the elite is able to keep up this system there's no reason for conflict. That was the way in Tudor England and Carolingian France, and so it is in African Rwanda.

Kagame is the leader of the Tutsi elite; not only do they consistently exclude Hutus (the odd Kabinet member notwithstanding), they also exclude their own fellow peasant Tutsis. Rwanda is a special kind of limited access society. Half of the Kigali budget consists of foreign aid. That is pleasant for the elite. Besides - enabled by sympathetic local Tutsi populations - the elite is also moonlighting in looting the minerals from the neighboring mines in Eastern Congo. That's not bad either.

At this point representatives of Western, open societies are arriving on the scene in order to pay off their bad consciences with development aid. Open societies are much more pleasant places to live in than societies with limited access. The rule of law enables fair competition for economic and political power. This ensures the production of wealth.

And what do the representatives of open societies tell those they've come to help in limited access societies? Be like us. Concentrate on good governance and democracy, and all will be well.

Limited access elitists can't believe what they're hearing. Democracy? You must be joking! That may well endanger their position and that can never be the natural order of things. No wonder Kagame is tapping phones, has spies everywhere, and is manipulating the elections.

Nevertheless, Rwanda is developing, is building schools, roads, hospitals and does not have more than its fair share of corruption, at least on the national level. But it comes at the price of freedom. There isn't any. It's a dictatorship by a Tutsi elite propped up with our money. It's the result of unhistorical thinking. Rudimentary awareness of our own feudal history might have giving us reason for pause.

Word has it that this unholy concoction of African autocrats, donor money and Congolese incompetence is on the verge of collapse. The English, Swedish and Dutch Parliaments are reconsidering their position. The Rwandese elite is well aware of the critical UN report on Kagame's involvement in atrocities in Eastern Congo and that it is jeopardizing the free flow of donor money.

Kagame hastened to clinch a deal with the Democratic Republic of the Congo (DRC): he would arrest Nkunda, if Kabila would deal with the Hutu perpetrators of the genocide.What a masterly coup. Kagame of course wouldn't dream of extraditing Nkunda to the DRC or the International Criminal Court (ICC); his powerplay in the Eastern Congo would come to light.

The deal gave Nkunda's successors the option of continuing the profitable mineral looting. Rwandan customs statistics indicate the country is exporting tons of minerals of foreign origin. It's a great deal!

Yet the equilibrium has become fragile. Grease is dripping from the political system: mineral prices have plummeted, donor funds may well dry up. Even Kagame's most loyal allies are getting nervous: French and Spanish indictments name Kagame himself as having shot down the Presidential airplane that led to the genocide. The elite's privileges are no longer reflecting the shifting balance of power.

Kagame's recent sneer that he doesn't need the Dutch aid, and that it never led to anything positive, is baloney. In reality Kagame needs Koenders as much as he needs Louis Michel, Lord Malloch-Brown and Obama. The question is, why would tax payers want to subsidize an African dictator? To what moral avail? Let's hope Koenders will remember that at dinner in Kagame's spy-bug ridden Presidential palace.

When the entire power edifice comes crashing down to earth and new atrocities ensue, will somebody recognize that unhistorical, Western makeability illusions aren't always a blessing? And will we, like in 1994, look the other way?

Also by this author:

- "De Prijs van een Slecht Geweten", book only available in Dutch (via Van Stockum)
- "Losing the War is Not an Option", part I of a series on "Afghanistan: the Road to Nationhood"

Related:

- "The Perversion of Developent Aid" (dossier)
- Angelina Jolie's journal "Ripples of Genocide" (site)

Afghanistan: the Road to Nationhood - Part II

"On Development Aid, Stability and Unification"


by Dr Sam Holliday


The visit of US Defense Secretary Robert Gates to Afghanistan, on 8 December 2009, unfortunately suggests that US policy will not basically change. Or if there is to be a change toward decentralization of power, it was well hidden.


Gates spoke of continued support for Harmid Karzai and the building, training and retention of the security forces controlled by the central government, Afghan Army and the Afghan "National" Police.


Gates stated that the US was not going to abandon Afghanistan as it did in 1969 and that money for "development" would continue to flow. He mentioned the need to clean up government corruption, without recognizing that money for "development" was one of the causes of corruption.


The visit of Gates suggests more of the same. New visibility and vigor perhaps, but still a failure to address the fundamental problems.

Because of the fragmented nature of Afghanistan any centralized government able to maintain stability would have to be strong, nationalistic, authoritarian, and corruption free; therefore, the foreign-funded government of Hamid Karzai, protected by westerners and promoting Western ideas of politics, economics, diversity, and human rights has been unsuccessful.

To have both stability and democracy would require much greater common identity among the Afghans, something that would take, under the best of circumstances, several decades to develop. Since the US will not support the kind of centralized regime now required, it is necessary to move to a more decentralized structure.

This will make the various levels of governance in Afghanistan more responsive to the people. It might not be government of, by and for the people but it will be a move in that direction from the current ineffective, corrupt centralized structures.

It will be difficult to shift to greater decentralization since the US foreign policy establishment and the United Nations think in terms of a top-down control to achieve economic and political "development". They want a single point of contact; they are accustomed to dealing with state-to-state relationships; they expect the US and Europe to expend blood and treasure to "develop" others.


They see "development" as making others more like themselves.

Decentralization will no doubt consolidate the power of Rashid Dostum, an Uzbek, Mohammad Mohaqeq, a Hazan, Abdul Rasul Sayuyaf, a Pushtun, Abdullah Abdullah, a Tajik, and their likes within the provinces. While many of these leaders have defects in Western eyes, they are capable of providing a security shield against the Muslim extremists within their our provinces—if they think it is in their interests to do so.


Getting local leaders to provide the needed security shield for the people is an essential first step to stability. Then it would be possible to influence the course of events toward a more desirable outcome. Without this first step there is no possibility of long-term stability.


Therefore, the focus of US and NATO efforts should be shifted to making local leaders, local militia, and local police more effective and efficient. If this is done the cost will be less and the benefits will be greater. XXXXX


Dr Sam Holliday is Director of the Armiger Cromwell Center


All publications copyright © 2008 Armiger Cromwell Center. Permission is granted to forward this article by e-mail to friends or colleagues on a fair use basis. For reprint permission, contact Armiger Cromwell Center at armigercc@comcast.net

Read also part I in this series, "Losing the War is Not an Option", by Arend Jan Boekestijn

Also by Dr Sam Holliday

-  American Diplomacy: "Aghan Federation"
- Armiger Cromwell Center: click "Afghanistan*New

All posts by Sam Holliday on Politeia

Related dossiers:

- "The Afghan Front"

- "Pakistan's Double Bubble"

- "The Finer Points of Warfare"

- "The Propaganda Hirabah"

- "Narco Wars"

COP15: the Vortex of Global Socialism

Image by genetew via Flickr

Yesterday at COP15 (that's eco lingo for the Copenhagen Climate Conclave) European leaders signed off on "7.2 bn Euros* over the next three years to a fund to help developing nations adapt to climate change. Announcing the deal, Swedish Prime Minister Fredrik Reinfeldt said all 27 EU member nations would contribute." (...) >>>

* That's peanuts compared to what is actually being claimed! Estimates range between $100 and $350 bn a year.

To those who labor under the illusion that it's just "government money", just wait till next tax day. Or your energy bills.

Perceptive followers of the news may be aware of a small scandal in the margins of COP15, dubbed "Climategate". It is a confirmation of what many long suspected: that there's a mechanism at work called "confirmation bias", if not - that downright fraud is taking place. Where politics and science meet, corruption ensues.

Others hold that anthropogenic global warming (AGW) can never be proved. It is a given that we will just have to accept as dogma, on the off chance that it's actually true (what was that about a pseudo religion?). It is also true that the universe isn't static: apart from the eternal laws of physics, things are changing all of the time - the climate - meaning: the composite of prevailing weather conditions in a given region (which is why "saving the climate" is such a ridiculous claim) is not exempted.

On this off chance leaders are pledging away billions of tax payers' money in a time of economic crisis and hand it over to developing or stagnant countries in the world, under the radar and as an alternative money stream, now that development aid is no longer an unquestioned form of global welfare.

The BBC is reporting that the G77 bloc of developing nations and China has reacted furiously to the EU offer. Lumumba Stanislaus-Kaw Di-Aping, representing the G77 has accused them of acting like "climate sceptics" (apparently as a replacement term of 'fascist!' now that warmists have claimed that ad hominem as their badge of honor).

He said during a news conference that "they are essentially saying that the problem does not exist. Their pledge does not address financing in its totality. We want to know where the money is coming from. Is it overseas development aid or not?"

Yes, we would also like to know!

"Swedish Prime Minister Fredrik Reinfeldt (...) acknowledged that the pledges were "a combination of new and old resources".

"Almost all of the money is likely to be simply a relabelling of existing aid commitments," said Anne-Catherine Claude, of ActionAid."

"Oxfam EU climate change adviser Tim Gore was also disappointed. "(...) this money is not even new - it's made up of a recycling of past promises, and payments that have already been made," he added."

Arend Jan Boekestijn is a Dutch scholar and a subsciber to Douglass North, Wallis & Weingast's theory "Violence and Social Orders". (His article "Losing the war (in Afghanistan) is not an option" was posted here yesterday.)

Boekestijn's book "De Prijs van een Slecht Geweten" (The Price of a Bad Conscience) (Aspekt) hit the bookstores in the Netherlands just yesterday. He's making the case that development aid in its present form is doing more harm than good. He's doing so on the basis of the following arguments:

1. The moral hazard: the UN sends peace missions, the developed world healthcare and eduction. What's there left to do for a national Government? Sustainability and aid addiction?

2. The cause of poverty is bad governance (autocracies, Socialist experiments, theocracies, etc.) .

3. There's no clear correlation between aid and economic development.

4. Good governance ought to be a condition for debt relief.

5. More aid doesn't lead to better economic growth. There's no lack of capital in Africa, but capital in Africa has a how productivity.

6. Aid harms democratization: why raise taxes when aid keeps poring in? No taxation, no representation. To which we may add: erroneously applied, democracy may actually legitimize tyrants, and pernicious collectivist regimes.

7. Aid leads to a hard local currency at the expense of exports.

8. Aid is supporting evil regimes and oppressors.

It's an interesting study and we'll be back on this issue shortly.

But while the Marxist poverty narrative is proved false, the combined forces of transnational progressivism and climatism are ensuring that a parallel stream of money keeps poring into the vortex of global Socialism.

Related dossier:

- "The Perversion of Development Aid"

Red-Green Radicalism Sprouted Wings!

With nefarious bankers and the evil capitalistic system being blamed for the economic melt down without taking into consideration the corrupting influence of governmental legislation (Community Reinvestment Act) that compelled financial private sector players to trade in social security services, Left and Right statists and progressive NGOs are crawling out of the woodwork to pounce upon the crypto Neo Commie windfall that holds the world in its grip.

What have we got? The G7, G8, G20 ... whatever; the Obama Government in the US with its massive socialization operation; the UN and its never ending machinations to grab global governance, redistribute wealth on a world-wide scale while it foists existential carbon debt upon the West; the upcoming Treaty of Copenhagen that makes Kyoto look like the Bill of Rights by comparison. As if that was not enough, we are now haunted by the ghost of Christmas Past in the body of the Club of Rome.

This troglodyte from the prehistory of environmentalism is meeting this week in Amsterdam to see how they can exploit the fortunate constellation of circumstances to its fullest extent. This may well be their last chance for world Socialism! Lord Monckton has recently suggested that those who piled from the Berlin Wall, piled straight into the Green movement. This makes sense, also without Michael Gorbachev, former President of the Soviet Union, founder of the Green Cross International and co-founder of Earth Charter as the unsung hero of the convention.

The dialectic (economic version) was an early part of the Club's philosophy. After its founding in 1968 the historic annals report that: "In 1972 the campaigning of this growing group of like-minded individuals gained a new worldwide reputation with the first report to the Club of Rome: "The Limits to Growth", commissioned by the Club from a group of systems scientists at the Massachusetts Institute of Technology. The Report explored a number of scenarios and stressed the choices open to society to reconcile sustainable progress within environmental constraints."

To the Left everything is a zero sum game! In the end their predictions were proven wildly off the mark, but lo and behold, type "wrong" and Club of Rome" into the Google search engine and the result is 3.640.000 hits, all assuring us that "they were right after all", "rehabilitated", or its tea-leaf reading deemed "with hindsight, spot on". These are the wonders of the Postmodern narrative: absolute truth does not exist, so reality is whatever you want it to be!

More curious news hit the transnationalist front this week: the launch in the Netherlands of a new group that self-identifies as a "development aid organization" meaning, "we are from the developed world and we are here to help". Only this lot thinks the Western Left as embodied in the world's NGOism, has been far too lenient with the world's dictators.

One is inclined to agree with them on this one, until the realization hits you that this group is potentially more radical and revolutionary than can possibly be beneficial. Perhaps they'll clarify their position further shortly, but from what is currently up on the website this may well portent a resurge of the radicalism we have seen in the past. There are harbingers that trend may indeed be the case.

The site is available in Dutch only. Given that their plans are blatantly out of line with the moral standard the Left holds for Western countries, until they've sorted that one, the participants for the moment decline to identify themselves. The About page of the New Involvement Foundation yields this information:

The NIF (New Involvement Foundation) is a new aid organization based in the Netherlands. It is founded by former aid workers who are fed up with the weak approach of Western governments, organizations and NGOs. After decades of programs and billions of dollars wasted the situation in which the world's inhabitants find themselves has hardly improved. After having worked for years for several development organizations the NIF founders were required to answer the question whether to accept the sitation, or to go for a more radical approach. 

The NIF way is very simple and effective and consists in the elimination of government leaders and supporting the imposition of new governments. The ultimate form of intervention, you might say.

How shocking does that sound to you? 

Recently posted:

- "The Transnational Progressivism Virus Goes on Steroids" (includes a link to Lord Monckton's full length lecture in Minnesota)
- "Push Back Day 1: "Not Evil Just Wrong", a parallel climate scam debunking effort


Related posts and articles:

- Global Climate Scam: "Is Obama Poised to Cede US Sovereignty?"
- The B-Cast: "Lord Monckton Warns America"


Related files:

- "Transnational Progressivism"
- "Transnational Bankruptcy"
- "Greenism"
- "The Case for Neo Communism"
- "Economy File"
- "Socialist Utopia Redux"

- "Neo Totalitarianism"
- "The Dialectics"
- "Hegel's Legacy"