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The inconvenient truth about foreign aid: The aid system colludes in redistributing wealth from poorer to richer. Under an aura of beneficence, aid is harnessed to self-interest. February 9, 2017

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Odaa OromooOromianEconomist

The inconvenient truth about foreign aid

For recipients aid has been a very mixed blessing, but for donors it’s been a bonanza.

Credit: Flickr/DFID. Some rights reserved.

It’s astonishing when you think about it. Why should an old and poorly-performing industry carry on, burdened with even more tasks, and provided with yet more money? I’m talking about foreign aid, whose mixed results have been reconfirmed countless times in the last 70 years.

For aid’s backers, such skepticism is unfair or at best premature. Successes, from combating diseases to promoting the ‘green revolution,’ are held as self-evident. With new, smarter policy formulas and management focused on results, failure is soon going to be minimized. Across most of the Left-Right spectrum, aid still enjoys political backing. Western spending continues largely upward. New aid donors from Turkey to Thailand are joining in. And tasks are expanding.To achieve the 169 targets of the world’s 17 Sustainable Development Goals by the year 2030, global leaders concur that foreign aid is vital.

For aid’s critics, however, ‘mixed results’ is a euphemism for badly designed, poorly-managed efforts guided by donor hobbies and flip-flopping policies that ignores the graveyards of failed programmes, the histories of waste, and the sometimes toxic outcomes of aid born of coercion and incoherence. China and Vietnam reduced poverty significantly with almost no Western aid, while aid-dependent countries like Malawi and Timor-Leste have fared badly—in which case why does the aid industry keep on prospering?

To answer that question we have to look at the drivers and navigation systems at work upstream in the system where the captains of the aid industry confer. These drivers get little serious probing, but the knowledge we do have points to an inconvenient truth: the main systems of development aid chiefly serve the donors. The aid system colludes in redistributing wealth from poorer to richer. Under an aura of beneficence, aid is harnessed to self-interest.

Here’s how.

To buy goodwill from others or coerce them, aid provides a classic tool of statecraft. For the biggest donors it can buy votes at the United Nations, keep client regimes ‘onside’, punish troublemakers and open doors to powerful people. As a former senior US aid official put it, “Foreign aid … is like political campaign contributions:  it can facilitate the access of those providing it to those receiving it.” Giving aid helps governments to look good in diplomatic forums while encouraging taxpayers to feel good about their generosity.

In addition, ‘our security’ is at stake. Since 9/11 development and humanitarian aid has increasingly been subordinated to hard power aims—that is ‘securitized.’ European aid, for example, is now supposed to help curb irregular migration from Africa.  Meanwhile, military doctrine and operations have become ‘developmentalized,’ complementing older practices in which aid lubricates access to strategic assets as in Kyrgyzstan, where western aid was exchanged for use of an airbase serving NATO operations in Central Asia.

Boosting exports and investments are major objectives of aid providers. A scholarly consensus, backed by many studies, holds that the mercantile interests of aid givers usually enjoy priority over the interests of aid recipients. For donors the pay-offs are many. For example, for every €10 the Dutch provide in bilateral aid to an average recipient country, Dutch exports to that country increase in the short run by €7 to €9. In the longer run, as goodwill and force of habit take hold, aid-induced sales then become even more lucrative. In the period 1988-2004, each dollar in Western bilateral aid yielded 2.15 dollars in additional exports of goods and services by Western businesses.

Donors use aid to gain footholds for their industries, like Japanese fishing fleets in the South Pacific, French uranium mining in Niger and oil and gas companies in emerging producers of hydrocarbons. Aid providers work assiduously to lower costs and risks for their business investors using subsidies like low-cost loans, insurance and market advice. In recipient countries they add to physical infrastructure and occasionally skilled-up workforces. But the aid system’s most powerful contributions involve the transmission and enforcement of ‘sound policy’, meaning policy that is suitable for investors.The formulas are well-rehearsed: sell-offs of public property; weaker protection of labour rights and environmental safeguards; and taxes shifted from foreign flows to domestic sources.

Under the World Bank’s ‘competitive cities’ approach, municipalities are pushed to compete for outside investment by offering tax ‘sweeteners’, land and other subsidies. With the rise of financial sector power, donors have facilitated the growth of stock markets and hot money flows. Key to these investor-friendly climates has been austerity—driving down public spending in recipient countries.

Acting almost as bailiffs, donors also help to extract payments to big pharmaceutical and software firms who own patents, copyrights and other kinds of ‘intellectual property.’ In the years 2012-2015, sub-Saharan African countries together paid about $10 billion to these private interests, up from about $8.7 billion in the years 2007-2010. But because rich country tax laws allow firms to hide profits, these World Bank data may actually understate the true scale of extraction.

Under vigorous donor pressure, poorer countries have poured trillions of dollarsinto Western banks under a rationale of self-insurance. As the economist C. P. Chandrasekhar has pointed out “This reverse flow of capital essentially means that excess savings in emerging markets are being ‘recycled’ in ways that put the responsibility of allocating that capital in the hands of a few financial decision makers … sitting at the apex of a concentrated global financial system.”

Consistent with their promotion of rent-seeking from ‘intellectual property’, donors show almost no interest in curbing cartels and other anti-competitive practices by transnational firms. Research is scarce, but it points to massive losses for poorer countries. One study estimates that annual losses are equivalent to at least 50 percent, and could equal as much as 300 percent of aid disbursed.

Donors have also invested in knowledge, but gains can flow back disproportionately to themselves. Aid for the ‘Green Revolution’, for example, helped boost crop yields in poor countries, but major beneficiaries have been western agribusinesses. Up to the early 1990s, estimated returns to such firms were forty times the amount of aid paid out originally by the US for research and development of the ‘Revolution’s’ higher-yield technologies.

Contrary to the belief that aid-financed programmes target diseases that mainly affect people in the tropics, research shows that “development aid is intended to alleviate the threats to populations within the donor state.” And since the 1960s, foreign aid has brought hundreds of thousands of students from poorer countries to study at universities in Europe and North America. Today, student fees and expenses annually absorb more than $3 billion in aid—virtually all of it spent in donor countries.  Where the longer-term benefits from aid-funded scholarship programmes go isn’t known with much precision, but there is some evidence that former scholarship holders from Africa tend to stay in richer countries, or to work abroad in Western firms and other organisations.

In sum, poorer countries routinely put more resources at the disposal of donor country interests than they receive in foreign aid, yet it isn’t easy to demonstrate this inconvenient truth conclusively. Estimating the extent of the aid system’s collusion in ‘perverse’ aid is often guesswork because the system’s upper reaches lack transparency. Laws, rules, political agreements and sheer inattention shield many counter-flows from public view. Every year, thousands of evaluations of aid’s ‘downstream’ activities take place but I know of no formal evaluation of aid mechanisms ‘upstream’ that would indicate with precision who benefits and by how much.

Does it have to be this way?

In 1943, at a time of enormous human suffering, one of the 20th century’s greatest activist-philosophers, Simone Weil, wrote about the characteristics of practical compassion for others.  She insisted that help must be concrete and authentic: “All human beings are bound by identical obligations, although these are performed in different ways according to the circumstances…. The obligation is only performed if… expressed in a real, not a fictitious, way.” Today, in framing debates about obligations across borders, that plea has lost none of its relevance.  It calls for lucidity, and hence the rejection of pseudo-solutions promoted through the foreign aid system.

Activists, academics, journalists and NGOs in a number of fields are already focusing on counter-flows and the legal gimmicks and non-transparency that promote them.  Although based outside the mainstream aid system, these initiatives are getting respectful attention from some donors, notably in Norwaybut also in a few knowledge centres of the United Nations. A prime example is the movement for tax justice.These combined efforts have begun to pay off as better tax enforcement and new rules yield more revenues for public purposes. Meanwhile a bloc of non-Western governments at the United Nations led by Ecuador is pressing to create a global tax body.

A system of global taxation won’t be with us soon, but as this idea gains traction it may open up a pathway towards an authentic system of redistribution across national borders. In so doing it could help to replace today’s machinery of upward redistribution, re-build decent social contracts, and ultimately sideline foreign aid as we know it.

Aid to Africa Projected to Fall During Trump’s Presidency December 17, 2016

Posted by OromianEconomist in Aid to Africa.
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Odaa OromooOromianEconomist


Aid to Africa projected to fall during Trump’s presidency

Report by chartered accountants says US likely to cut spending by reining in development aid.

The report by the Institute of Chartered Accountants in England and Wales (ICAEW) says the Trump presidency raises the risk of the US rolling back development aid, thus affecting dependent countries such as Kenya, Tanzania, Ethiopia, Nigeria and the Democratic Republic of Congo.

The accountancy and finance body said that signs of an expansionary fiscal stance under the Trump administration, coupled with spending cuts to build dollar reserves for infrastructure development, are likely to lead to a decrease in aid to African countries.

“Aid is probably the main channel through which a change in US policy under a new president could impact Africa,” states the fourth quarter (2016) report commissioned by ICAEW and produced by partner and forecaster Oxford Economics.

“Policymakers and businesses across the continent will be keen to see President-elect Trump’s plans for development policies once he takes office,” the report adds.

Donald Trump is expected to be formally inaugurated as the country’s 45th president on January 20, 2017.

According to the report, and drawing on insights from the Organisation for Economic Co-operation and Development (OECD), the US is sub-Saharan Africa’s major donor in bilateral official aid, with over $9 billion distributed to the region to date.

It is followed by the United Kingdom, with just under $4 billion distributed, and France with just over $2 billion.

In terms of official development aid receipts in East Africa, Ethiopia received the largest amount at over $3.5 billion, followed by Kenya and Tanzania with over $2.5 billion each, and Uganda with over $1.5 billion.

Doing business

According to the report, the change in the US administration will also affect Africa’s trade and investment prospects. It states that steady progress is being made in the continent’s business environment, with Mauritius ranked 49th out of 190 countries globally in terms of the ease of doing business.

The World Bank’s Doing Business 2017 report ranked Rwanda at position 56h, Morocco 68th, Botswana 71st and South Africa 74th. Oil giants Nigeria and Angola were ranked 169 and 182 respectively. According to the report, foreign direct investment inflows into Africa fell by 7 per cent to $54 billion in 2015, with decreasing flows to SSA offsetting larger inflows into North Africa.

Large inflows into Angola saw investment into the Southern African region increase by 2 per cent.

East Africa received $7.8 billion in FDI during 2015, a two per cent decrease from 2014; Central African receipts decreased by 36 per cent and West Africa by 18 per cent.

Increase in FDI

The region is expected to see an increase in net FDI in the coming years, with a 10 per cent rise expected in 2017. Tanzania is expected to attract considerable investor interest in the country’s natural gas sector.

Click here to Read more at The EastAfrican

When Aid Goes Wrong January 17, 2016

Posted by OromianEconomist in Uncategorized.
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Odaa OromooDounle digit Ethiopia


The World Bank accepted a rap on the knuckles for the massive flaws in the PBS programme but did not cancel it. DfID re-routed funds to other programmes in Ethiopia, the aid flowed to the authoritarian regime as before. In late 2015 and early 2016, famine threatened. No one asked the obvious question: how much has Ethiopia’s brutal, donor funded, economic experiment contributed to the collapse in livelihoods?


Of all the academic economists working on Ethiopia, I could not find one who was willing to speak on the record for this article. Much of the professional field of development studies is dependent on DfID research grants, with many academics serving on multimillion-pound study teams.

“If you challenge the consensus and make headlines, it is going to make your life harder,” said one economist at a London university, speaking on condition of anonymity.


Evaluations of PBS relied on figures supplied by the Ethiopian government; there were huge, unexamined risks of corruption in funnelling the money through the Ethiopian treasury, and the metrics used to measure success were simply the things purchased by the programme, such as schools built, wells dug, pupils enrolled or teachers hired. The donors had, in fact, no way of measuring whether those things actually benefitted the populations concerned.




ETHIOPIA-TRANSPORT-RAILWA-009 Development in Ethiopia’s capital city. But at what cost?

Most more economically developed countries give aid to those that are less developed and this is almost always seen as a positive thing. However there have been cases when the aid provided has done more harm than good.

This article looks at the situation in Ethiopia. This country has been a major recipient of western aid since the 1980s and much of it seems to have been successful in helping the country to develop and to fend off the worst of the famines that ravaged the country in the past. Currently though the development drive in Ethiopia has been implicated in forcing people off their land and in to less fertile areas.

It is a long read but full of information that could really develop your essay writing.

Consider the following points.

  1. Why are people being moved from their ancestral…

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Foreign aid largely helps the wealthy, not the poor November 1, 2015

Posted by OromianEconomist in Uncategorized.
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Rich Men in London Still Deciding Africa’s Future March 29, 2015

Posted by OromianEconomist in Africa, Africa and debt, Africa Rising, African Poor, Agriculture, Aid to Africa, Corruption, Corruption in Africa, Development.
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Director of the Global Justice Now Nick Dearden said:

“It’s scandalous that UK aid money is being used to carve up Africa in the interests of big business. This is the exact opposite of what is needed, which is support to small-scale farmers and fairer distribution of land and resources to give African countries more control over their food systems. Africa can produce enough food to feed its people. The problem is that our food system is geared to the luxury tastes of the richest, not the needs of ordinary people. Here the British government is using aid money to make the problem even worse.”

Ethiopia, Ghana, Tanzania, Burkina Faso, Côte d’Ivoire, Mozambique, Nigeria, Benin, Malawi and Senegal are all involved in the New Alliance.

In a January 2015 piece in The Guardian, Dearden continued by saying that development was once regarded as a process of breaking with colonial exploitation and transferring power over resources from the ‘first’ to the ‘third world’, involving a revolutionary struggle over the world’s resources. However, the current paradigm is based on the assumption that developing countries need to adopt neo-liberal policies and that public money in the guise of aid should facilitate this. The notion of ‘development’ has become hijacked by rich corporations and the concept of poverty depoliticised and separated from structurally embedded power relations.

Business in Ghana

By Colin Todhunter, Global Research

Some £600 million in UK aid money courtesy of the taxpayer is helping big business increase its profits in Africa via the New Alliance for Food Security and Nutrition. In return for receiving aid money and corporate investment, African countries have to change their laws, making it easier for corporations to acquire farmland, control seed supplies and export produce.

Last year, Director of the Global Justice Now Nick Dearden said:

“It’s scandalous that UK aid money is being used to carve up Africa in the interests of big business. This is the exact opposite of what is needed, which is support to small-scale farmers and fairer distribution of land and resources to give African countries more control over their food systems. Africa can produce enough food to feed its people. The problem is that our food system is geared to the luxury tastes of the…

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Foul Sides of Development Aid Business March 29, 2015

Posted by OromianEconomist in Africa, Africa Rising, African Poor, Aid to Africa.
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Tarig Anter on Protect & Reinvent Democracy

Celtel advertising in rural Uganda Celtel advertising in rural Uganda

Here are two different perceptions of the development aid business that is targeting developing countries. One is from Forbes.com; while the other is from Euro-correspondent.com. interestingly, both of these opposing understandings are admitting the controversy of excessive profits made by those rich funding agencies and their middlemen who are paid to invest on their governments’ behalf.

Looking at these contrasting perceptions, they both confirm that it is totally unacceptable to create hundreds of billions of dollars for European agencies and European citizens in just few years out of the poverty of Africa, Asia and Latin America under the covers of development aid and business. Such practices shed lights on the undisclosed objectives of development aid and business.

Claiming that the fast huge wealth made by middlemen, such as Mo Ibrahim and Celtel, from the British aid agencies backing is justified because they made mobile phone revolution…

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Aid to #Africa: Millions of pounds of aid money is at risk of falling into criminal hands, warn MPs January 30, 2015

Posted by OromianEconomist in Africa, Africa and debt, Aid to Africa, Corruption in Africa, Illicit financial outflows from Ethiopia, UK Aid Should Respect Rights.
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 Odaily telegraph

Millions of pounds of aid money is at risk of falling into criminal hands, warn MPs

Department for International Development’s oversight of foreign aid group was ‘unacceptably poor’, warn MPs

Holly Watt,  The Telegraph


Companies allegedly linked to African criminals, fraudsters and money launderers have been given tens of millions of pounds of taxpayers’ money, a report has found, as the full scale of the UK’s foreign aid folly emerged.

A further £27m was left in a bank account which had an interest rate of 0.016 per cent a year, according to the Public Accounts Committee.

The Private Infrastructure Development Group, an aid group set up by the Department for International Development which invests in projects in developing countries, also spent thousands of pounds on business class flights.

The report will raise further questions about the Government’s overseas aid budget, which has grown in recent years as ministers try to meet a commitment in the Coalition agreement to spend 0.7 per cent of the GDP on developing countries from 2013.

The UK government will have given PIDG £700million over the three years leading up to this March, meaning Britain has given around 70 per cent of the group’s income since it was set up.

However the report by the influential committee of MPs criticised the department’s management of the agency, saying DFID’s oversight of the group has been “unacceptably poor”.

In one case, PIDG’s Emerging Africa Infrastructure Fund invested almost £20million in a project designed to support the gas processing and distribution activities of Seven Energy, a Nigerian energy company.

“Seven Energy was named by the former Governor of the Central Bank of Nigeria in a 2014 investigation he conducted into the allegations of looting of Nigerian oil revenues,” noted the MPs.

PIDG’s Emerging Africa Infrastructure Fund also put almost £19 million into a power plant in the Ivory Coast, where a fellow investor was allegedly a notorious fraudster called James Ibori.

Ibori was jailed in 2012 for 13 years after admitting fraud of nearly £50million. The judge in his case said that the £50million figure could be “ludicrously low”, and that the amount pocketed by the former governor of Nigeria’s Delta state was “unquantified”.

Margaret Hodge, the chair of the Committee of Public Accounts, said that DFID’s oversight of the group had left it open to questions about the integrity of PIDG’s investments and some of the companies it partnered.

“Concerns were raised with us about the complex corporate structures that PIDG’s partners have sometimes established, making it difficult to be certain about the ownership of companies and creating a risk that those involved may have criminal connections,” she said.

PIDG operates around the world, in countries including Ivory Coast, the Democratic of Congo and Sierra Leone. Mrs Hodge said MPs accepted that these countries could be “challenging”, but that PIDG needed “much tougher scrutiny” from the department, which is headed by Justine Greening.

PIDG also left an average of £27million in a bank account for almost two years – earning interest of 0.016 per cent a year. The MPS said that the loss was likely to have been between £200,000 and £2million and said that the bank in question, SG Hambros, was likely to have made a financial return from the “idle” funds.

“We questioned how it had been possible for the Department, PIDG, and [SG Hambros] not to have been aware of this matter for 18 months,” stated the report.

DFID has been ordered to write to SG Hambros and demand a donation to charity working against Ebola in west Africa in return for the lost interest.

The foreign-aid quango also continued to allow staff to book fully flexible business class flights for two years after DFID ordered the group to “tighten up” its travel policy.

The National Audit Office found that between January 2011 and July 2014, PIDG employees booked 15 flights which cost more than £5,000 each, at a total cost in excess of £75,000.

“It is essential for public confidence in spending on overseas aid that the Department for International Development is able to demonstrate that UK taxpayers’ money is being used for its intended purpose – of helping the world’s poorest people – and not ending up in the wrong hands,” said Mrs Hodge.

“Every pound that is lost to fraud and corruption is a pound that could have been spent on educating a child, improving health systems or supporting economic development.”

Mary Creagh MP, Labour’s Shadow Development Secretary, attacked the government’s management of the agency.

“David Cameron promised value for money on aid but this report shows he has failed to deliver. The NAO and now the Public Accounts Committee have exposed that the Tory-led Government has been pouring hundreds of millions of pounds of taxpayers’ money into projects without checking where it went,” said Ms Creagh.

“Ministers have sat on their hands while Britain’s aid efforts have been undermined. If the Tories and Lib Dems don’t know where aid money is going then how can they measure if it is working?”

A DFID spokesman denied that PIDG had links to known criminals.

He said: “Britain’s investment in the Private Infrastructure Development Group (PIDG) has helped to create 200,000 jobs and driven £6.8billion of private investment into some of the world’s poorest countries, developing their economies and making them less dependent on aid.

“This PAC report suggests that UK funds are at risk of ending up in the wrong hands, citing alleged links between a convicted fraudster and a PIDG-backed company.

“These have been investigated thoroughly by the National Audit Office, as well as DFID and PIDG, and absolutely no evidence has been found to substantiate them.

“We already have strong oversight of PIDG’s activities and have recently clamped down on excessive travel rates. An independent review of their operations, backed by Britain, will ensure they continue to kick start growth in the developing world.”

DFID spending has attracted criticism over the years. Last year, the Independent Commission for Aid Impact so found that some British aid money was funding corruption abroad.

One development project in Nepal encouraged people to forge documents to gain grants while police stations in Nigeria linked to British aid were increasingly demanding bribes, the report discovered.

It also emerged that civil servants went on a £1billion spending spree in just eight weeks to hit the 0.7 per cent spending target.


The Rich gets richer through aid: Gates foundation spends bulk of agriculture grants in rich countries. #Africa November 5, 2014

Posted by OromianEconomist in African Poor, Aid to Africa, Gets Foundation.
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Gates foundation spends bulk of agriculture grants in rich countries

The Guardian, by John Vidal, 3rd November 2014




The Guardian reports that African NGOs received just 4% of Bill Gates’ money for agriculture work, with 75% for US organisations.

MDG : Agriculture in Africa : Farmers break cocoa pods in Ghana

MDG : Agriculture in Africa : Farmers break cocoa pods in Ghana

Most of the $3bn (£1.8bn) that the Bill & Melinda Gates Foundation has given to benefit hungry people in the world’s poorest countries has been spent in the US, Britain and other rich countries, with only around 10% spent in Africa, new research suggests.

Analysis of grants made by the foundation shows that nearly half the money awarded over the past decade went to global agriculture research networks, as well as organisations including the World Bank and UN agencies, and groups that work in Africa to promote hi-tech farming.

The other $1.5bn went to hundreds of research and development organisations across the world, according to Grain, a research group based in Barcelona. “Here, over 80% of the grants were given to organisations in the US and Europe, and only 10% to groups in Africa. By far the main recipient country is the US, followed by the UK, Germany and the Netherlands,” it says in a report published on Tuesday.

Of the $678m given to universities and national research centres, 79% went to the US and Europe, and only 12% to Africa.

“The north-south divide is most shocking, however, when we look at the $669m given to non-government groups for agriculture work. Africa-based groups received just 4%. Over 75% went to organisations based in the US,” says the report.

“When we examined the foundation’s grants database, we were amazed that they seem to want to fight hunger in the south by giving money to organisations in the north. The bulk of its grants for agriculture are given to organisations in the US and Europe,” said agronomist Henk Hobbelink, a co-founder of Grain.

“It also appeared that they’re not listening to farmers, despite their claims. The overwhelming majority of its funding goes to hi-tech scientific outfits, not to supporting the solutions that the farmers themselves are developing on the ground. Africa’s farmers are cast as recipients, mere consumers of knowledge and technology from others.”

The private foundation – one of the world’s largest with an endowment of more than $38bn from Bill Gates, and which supports the Guardian’s Global development website – has emerged in under a decade as one of the major donors to agricultural research and development and the largest single funder of research into genetic engineering. In 2006-07, it spent $500m on agricultural projects and it has maintained funding at around this level since. The vast majority of the foundation’s grants focus on Africa.

It aims to enhance healthcare and reduce extreme poverty but its agriculture work has been criticised for being fixated on the work of scientists in centralised labs and ignoring the knowledge and biodiversity that Africa’s smallholder farmers have developed over generations.

The single biggest recipient of Gates foundation agricultural grants is the CGIAR consortium of 15 international agricultural research centres.

“In the 1960s and 70s, these centres were responsible for the development and spread of a controversial ‘green revolution’ model of agriculture in parts of Asia and Latin America which focused on the mass distribution of a few varieties of seeds that could produce high yields – with the generous application of chemical fertilisers and pesticides,” says the report.

“Efforts to implement the same model in Africa failed and, globally, CGIAR lost relevance as corporations like Syngenta and Monsanto have taken control over seed markets. Money from the Gates foundation is now providing CGIAR and its green revolution model with a new lease of life, this time in direct partnership with seed and pesticide companies.”

The centres have received more than $720m from Gates since 2003. During the same period, another $678m went to universities and national research centres – more than three-quarters of them in the US and Europe – for research and development of specific technologies, such as crop varieties and breeding techniques.

Britain has been the Gates foundation’s second largest recipient, receiving 25 grants worth $156m since 2003. In the US, where universities and research groups have been awarded $880m, Cornell University has received $90m – more than all other countries except the US, UK and Germany.

“We could find no evidence of any support from the Gates foundation for programmes of research or technology development carried out by farmers or based on farmers’ knowledge, despite the multitude of such initiatives that exist across the continent and the fact that African farmers continue to supply an estimated 90% of the seed used on the continent,” says the report. “The foundation has elected consistently to put its money into top-down structures of knowledge generation and flow, where farmers are mere recipients of the technologies developed in labs and sold to them by companies.”

Grain suggests that the foundation uses its money to indirectly impose a policy agenda on African governments. “The Gates foundation set up the Alliance for a Green Revolution in Africa (Agra) in 2006 and has supported it with $414m since then. It holds two seats on the alliance’s board and describes it as the African face and voice for our work,” it says.


Read more @  http://www.theguardian.com/global-development/2014/nov/04/bill-melinda-gates-foundation-grants-usa-uk-africa

Aid to Africa:A smokescreen to hide the “sustained looting” of the continent July 20, 2014

Posted by OromianEconomist in Africa, Africa Rising, Aid to Africa, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Afar, Ogaden, Sidama, Southern Ethiopia and the Omo Valley, Free development vs authoritarian model, Human Rights Watch on Human Rights Violations Against Oromo People by TPLF Ethiopia, Jen & Josh (Ijoollee Amboo), Land and Water Grabs in Oromia, UK Aid Should Respect Rights, Uncategorized.
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OThe Guardian home

Although sub-Saharan Africa receives $134bn each year in loans, foreign investment and development aid, $192bn leaves the region, leaving a $58bn shortfall. See @ http://www.theguardian.com/global-development/2014/jul/15/aid-africa-west-looting-continent?CMP=fb_ot



Mark Anderson writes for the Guardian:

Western countries are using aid to Africa as a smokescreen to hide the “sustained looting” of the continent as it loses nearly $60bn a year through tax evasion, climate change mitigation, and the flight of profits earned by foreign multinational companies, a group of NGOs has claimed.

Although sub-Saharan Africa receives $134bn each year in loans, foreign investment and development aid, research released on Tuesday by a group of UK and Africa-based NGOs suggests that $192bn leaves the region, leaving a $58bn shortfall.

It says aid sent in the form of loans serves only to contribute to the continent’s debt crisis, and recommends that donors should use transparent contracts to ensure development assistance grants can be properly scrutinised by the recipient country’s parliament.

“The common understanding is that the UK ‘helps’ Africa through aid, but in reality this serves as a smokescreen for the billions taken out,” said Martin Drewry, director of Health Poverty Action, one of the NGOs behind the report. “Let’s use more accurate language. It’s sustained looting – the opposite of generous giving – and we should recognise that the City of London is at the heart of the global financial system that facilitates this.”

Research by Global Financial Integrity shows Africa’s illicit outflows were nearly 50% higher than the average for the global south from 2002-11.The UK-based NGO ActionAid issued a report last year (pdf) that claimed half of large corporate investment in the global south transited through a tax haven.

Supporting regulatory reforms would empower African governments “to control the operations of investing foreign companies”, the report says, adding: “Countries must support efforts under way in the United Nations to draw up a binding international agreement on transnational corporations to protect human rights.”

But NGOs must also change, according to Drewry: “We need to move beyond our focus on aid levels and communicate the bigger truth – exposing the real relationship between rich and poor, and holding leaders to account.”

The report was authored by 13 UK and Africa-based NGOs, including:Health Poverty ActionJubilee Debt CampaignWorld Development MovementAfrican Forum and Network on Debt and Development,Friends of the Earth AfricaTax Justice NetworkPeople’s Health Movement Kenya, Zimbabwe and UKWar on WantCommunity Working Group on Health ZimbabweMedactHealthworkers4AllFriends of the Earth South AfricaJA!Justiça Ambiental/Friends of the Earth Mozambique.

Sarah-Jayne Clifton, director of Jubilee Debt Campaign, said: “Tackling inequality between Africa and the rest of the world means tackling the root causes of its debt dependency, its loss of government revenue by tax dodging, and the other ways the continent is being plundered. Here in the UK we can start with our role as a major global financial centre and network of tax havens, complicit in siphoning money out of Africa.”

A UK government spokesman said: “The UK put tax and transparency at the heart of our G8 presidency last year and we are actively working with the Organisation for Economic Co-operation and Development to ensure companies are paying the tax they should and helping developing countries collect the tax they are owed.” Read  @http://www.theguardian.com/global-development/2014/jul/15/aid-africa-west-looting-continent?CMP=fb_ot


WHy The Aid To Africa Has Failed? December 1, 2013

Posted by OromianEconomist in Africa, Aid to Africa, Corruption, Development, Dictatorship, Economics, Economics: Development Theory and Policy applications, Oromia, Oromiyaa, Oromo, Oromo Culture, Oromo Identity, The Colonizing Structure & The Development Problems of Oromia, Uncategorized.
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“Never mind that Africa receives roughly $50 billion in aid annually from foreign governments, and perhaps $13 billion more from private philanthropic institutions, according to Penta’s estimate. Never mind that Angola’s oil revenues are around $72 billion, and Nigeria’s $95 billion; that Africa boasts at least 55 verified and somewhat detached billionaires. I can testify that Africa is much worse off than when I first went there 50 years ago to teach English: poorer, sicker, less educated, and more badly governed. It seems that much of the aid has made things worse.” 

Here is in the following the renowned author  Paul Theroux  discusses why Africa’s aid industry is in a mess. For the details and original source please refer to:


‘In its naked reality, Africa, the greenest continent, is still the most beautiful, the least developed, the wildest on earth. Vast plains, big animals, hospitable people, who have been enslaved, sidelined, colonized, and converted willy-nilly either to Christianity or Islam. This receptive amphitheater of goodwill and big game, inspires megalomania among its foreign visitors who strut upon it — it has always done so, for those who seek the singularity of a little excitement and glory. I sometimes think that if the poorer counties of America’s Deep South had rhinos and elephants, instead of raccoons and possums, the philanthropists might direct their attentions to those parts, too.A rich white donor in black Africa is a study in high contrast that puts one in mind of the gallery of role models: Tarzan, Mr. Kurtz, King Leopold, Cecil Rhodes, Livingstone, Mrs. Jellyby, Albert Schweitzer, Hemingway, Henderson the Rain King: the overlords, the opportunists, the exploiters, the visionaries, the hunters, the care-givers, the baptizers, the saviors, all of them preaching the gospel of reform and seeking a kingdom of their own, if not an empire.Henry David Thoreau, the 19th-century American author, believed that all such outgoing people had something discreditable in their past that through giving they aimed to expiate. And all are characterized by the rather touching innocence of a billionaire faced with the brutal truth that the relative simplicity of acquiring wealth is nothing compared to the extreme difficulty of giving money away, for the common good.’

‘The real helpers are not the schemers and grandstanders of the eponymous family foundations or charities; they are nameless ill-paid volunteers who spend years in the bush, learning the language and helping in small-scale manageable projects, digging wells, training mid-wives, teaching villagers that unprotected sex spreads HIV; and among these stalwarts are the long-serving teachers who have liberated Africans by simply teaching them English, and are still doing so, even as they make the local governments lazier. The so-called White Fathers (the Society of Missionaries of Africa) I met in Malawi who ran upcountry clinics used to say, “I guess I’ll be buried here.” No one ever says that now, and significantly none of the people I spoke with for this piece ever expressed a wish to spend any serious length of time in Africa. None speaks an African language. To the detriment of their aims, they are on better terms with the African politicians than the common ruck of African people. Years living simply on the ground in Africa convinced me that there was more for me to learn from Africans than to teach. I saw there were many satisfactions in the lives of people who were apparently poor; many deficits in the lives of the very wealthy. I saw that African families were large and complex and interdependent; that old age was revered, that Africa’s link to the distant past — to the dawn of the world — was something marvelous and still intact in many places. Most of all, I was impressed by the self-sufficiency of ordinary people. Without much in the way of outside help, the people in the countries I knew managed to endure, usually through the simplest traditional means, and finally to prevail. Africa has the schools, the money and the resources to fix its own problems; it’s appalling to think of donors telling them otherwise, of the whole continent terminally indebted and living on handouts.’

‘Never mind that Africa receives roughly $50 billion in aid annually from foreign governments, and perhaps $13 billion more from private philanthropic institutions, according to Penta’s estimate. Never mind that Angola’s oil revenues are around $72 billion, and Nigeria’s $95 billion; that Africa boasts at least 55 verified and somewhat detached billionaires. I can testify that Africa is much worse off than when I first went there 50 years ago to teach English: poorer, sicker, less educated, and more badly governed. It seems that much of the aid has made things worse.   I am not alone observing this fact. In his new book, The Great Escape: Health, Wealth, and the Origins of Inequality, economist Angus Deaton questions the usefulness of all aid, and describes how the greater proportion of the world’s poor are found not in Africa but in the booming, yet radically unequal, economies of China and India. Zambian-born economist Dambisa Moyo calls aid a “debilitating drug,” arguing that “real per-capita income [in Africa] today is lower than it was in the 1970s, and more than 50% of the population — over 350 million people — live on less than a dollar a day, a figure that has nearly doubled in two decades.” The Kenyan economist James Shikwati takes this same line on aid, famously telling the German magazine Der Spiegel, “For God’s sake, please stop.” There have, of course, been a few successes. For all his faults, Bill Clinton’s strong-arming of pharmaceutical companies to lower the price of one-a-day AIDS medications, to less than a dollar per pill, has delivered real relief to Africa’s most vulnerable. But we also need to be honest about such grandiose ambitions: Most fail. (For lessons on what to avoid and what to do in order to execute effective philanthropy in Africa, see the box at end of story.) The most recent example of a Westerner running amok in Africa appears to be the celebrity-economist Jeffrey Sachs and his $120 million effort to end extreme poverty there. Nina Munk documents in her book The Idealist (see Penta Sept. 12) how, among other things, Sachs’ Millennium Villages Project poured $2.5 million over three years into a sparsely populated community of nomadic camel herders in Dertu, Kenya, and trumpeted its success. In actual fact, the charity’s paid-for latrines became clogged and overflowing, the dormitories it erected quickly fell into disrepair, and the livestock market it built ignored local nomadic customs and was closed within a few months. An incensed Dertu citizen filed a 15-point written complaint against Sachs’s operation, claiming it “created dependence” and that “the project is supposed to be bottom top approached but it is visa [sic] versa.” ‘

African Philanthropy Done Right

Foundation Source is the philanthropic advisor and partner to over 1,100 family foundations. Penta asked the organization’s chief philanthropic officer, Page Snow, to provide some basic guidelines on how to successfully execute philanthropic projects in Africa. Her advice:

“Beware the panacea. Millions of dollars are wasted on overly ambitious projects claiming to be a ‘killer app.” Projects that employ tried-and-true interventions, narrower in scope, usually have far greater impact. Demand responsible management. Ask tough questions if money is flowing into a charity, but isn’t flowing out to charitable causes. Avoid duplication. Be aware of other efforts already on the ground and make sure that your program isn’t a wasteful repeat but, preferably, leverages off what’s there. Support local, sustainable solutions. Avoid short term fixes by always seeking input from locals; plan for them to run the project on their own in the long-run. Beware of poor infrastructure projects. Make sure wells are dug where they’re actually needed, that the bridges and roads are integrated into existing plans by government or other NGOs.Use technology intelligently. Over 90% of households across sub-Saharan Africa don’t have access to electricity for their everyday needs, let alone power for laptops. Make sure locals have the skills, resources, and necessary tools to keep tech-dependent elements of your philanthropic project running. Be prepared to face corruption. Even when a project has been granted governmental approvals, there’s no guarantee of official cooperation; corruption and regional conflicts pose considerable challenges. Be culturally appropriate. Put on your anthropologist’s hat. Africans have their own process for dealing with grief and loss; Western-style grief counselors following a natural disaster or war aren’t appropriate.”


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