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Internationalist Communist Forum
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#92 - How capitalism under-develops the world
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Feb 2012
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Aid for trade as long as they buy the guns
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After the Structural Adjustment Programmes of the 1980s and 1990s imposed conditions like privatisation of all the limited
utilities and state-run enterprises in exchange for loans at extortionate interest, the 2000s have seen a new form of screwing
blood out of a stone in the poor countries. This is "aid for trade" under the auspices of so-called development assistance. In
Britain the Department for International Development, administers this along with all other forms of aid - the budget being
£8.4bn in 2010, up from £7.2bn in 2009. Which may seem a lot. But it is more than compensated for by what comes back - for
the benefit of British companies.
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A Brooks World Poverty Institute paper, published last December, said it far better than we could " the Aid for Trade agenda
emerges as a fig leaf, a cheap gift from the powerful to obtain the compliance of the marginalised whilst distracting attention
from the wider economic and political structures that perpetuate their marginalisation, all dressed in the discourse of
development."
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In fact this study give hundreds of examples of mainly EU and British development aid and "aid for trade", which have nothing to
do with tackling the poverty of the populations in poor countries and everything to do with shoring up capitalist - some local,
but mostly foreign - operations and developing infrastructure purely for their benefit.
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For instance in Kenya, EU-financed road building concentrated in those areas connecting large scale agriculture to the ports -
thus securing around £500m worth of food imports from Kenya to Europe every year! Or there is so-called boomerang aid -
whereby European money for road building in Uganda just helped to subsidise European firms. This even led the corrupt president
Museveni to complain of the "third world" building standards of European firms when it came to the Kampala bypass. This project
had involved the French company BCEOM, Italian Salini Constructori Spat and British TRL. It was meant to open in 2006 and
eventually did so in 2009, but cracks had already appeared! The road funds allocated by multilateral agencies were over
£1.3bn, mostly ending up in the pockets of the aforementioned companies in Europe!
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The European Investment Bank has funded mining operations in both Zambia and in the DRC - where the conditions for workers and
villagers are appalling. EIB loans (around £100m) to private sector companies to start extracting minerals at Tenke Fungurume
mine in DRC caused people to be displaced to tent camps until they were forced to leave the area. For mineworkers, wages were
low, overtime not paid and only token renovation of some schools and wells was done.
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Similarly, when assistance is meant to be given to encourage enterprise - as in Haiti's export processing zone (EPZ), the
situation for workers "couldn't have been worse". For instance says the study, "One garment worker reported that she makes
125 gourdes (£2.50) a day, which is the Haitian minimum wage for piece-rate workers. After tax, her take-home is approximately
£10 a week. With a day’s pay she can buy a cupful of rice, transport via group taxi, and pay down debt on her now-destroyed
apartment [destroyed during the recent Haitian earthquake]."
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As for what comes back to the donors, it is well documented that the poor countries are forced to become dependent on imports,
even of basic foodstuffs, which they used to grow themselves to the point of self-sufficiency!
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But worse is the fact that countries are blackmailed and bribed to buy western arms, which, if their value is added up, more
than compensates for any supposed altruistic aid "just given" to the same countries. Overall, says the Stockholm International
Peace Research Institute, the world's top 100 arms-producing companies managed to increase their sales in 2009, despite the
crisis - to $401bn, an 8% increase in real terms. Of these 100 companies, 78 are based in the US and Western Europe and
generated $368bn (92%!!) of these total sales. A figure which should be compared to the foreign "aid" distributed in 2008 - a
grand total of $119.8bn. One can only wonder just how much of this foreign "aid" is used by the regimes of the poor countries
to buy yet more weapons from donor countries in order to line the pockets of these death merchants and their shareholders!
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