Debt forgiveness and positive change

Tom Knapp posts some very good criticisms of the current foreign aid regime, in light of recent announcements of $40 billion in debt forgiveness for African nations. The fundamental point about foreign aid going to oligarchs in the borrowing countries is an important one:

First of all, the idea that the money was lent to “countries” is pure fiction. It was lent to politicians — politicians who, for the most part, were exceptionally evil even by the standards of, well, politicians. Why should a dirt farmer in sub-Saharan Africa consider himself on the hook just because some dimwit in Washington DC (or Brussels, or London) gets off on subsidizing Lifestyles of the Rich and Brutal? And why does said dimwit deserve that money back anyway? Remember, he stole it from us before he sent it to some Idi Amin clone to blow on fast cars, cheap women, expensive booze and well-armed palace guards. Hell, these “loans” have been, to at least some degree, instrumental in keeping those dirtbags in power. And we want their victims to fork over? Idi sure as hell isn’t going to.

Having worked in relief and development for a time (1999 in Albania and Kosovo), I agree with his sentiments. There was a highway from the main airport outside Tirana to the city. However, the highway, built with international development money, only spanned about half the distance. Why? Because half the budget was siphoned off by graft and corruption.

If you want to do something positive along with rightly criticizing traditional foreign aid models, you can do what I did this weekend while paying bills: give a donation to FINCA to support micro-lending to individual entrepreneurs in developing countries rather than giving to their corrupt leaders. “Small Loans, Big Changes,” baby.

For those interested in the subject, Lord Peter Bauer did some pioneering work on the effects of foreign aid, specifically on the inefficacy of traditional aid. See the May 2, 2002 Economist article on him (not free, unfortunately). Lord Bauer was the winner of the 2002 Milton Friedman Prize for Advancing Liberty.

Yours truly,
Mr. X

…make a difference…

UPDATE: Scott brought to my attention Heifer International, an organization that doess similar sustainable aid, though with livestock instead of dollars. Check out their ‘gift catalog‘ or their interactive map of projects. Change the world, people.