Civitas

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January 05, 2005

Don't make it worse than it is

The response of the public to the terrible tragedy in South East Asia has been almost as difficult to take in as the disaster itself. The stupendous generosity shown by people in this country, and in many other countries, shows that there is no shortage of compassion for the victims of one of the worst natural disasters anyone can remember.

However, some people in political circles are trying to turn this into something more than humanitarian aid. There have been calls for a programme of large-scale, long-lasting aid – i.e. transfers of capital from Western governments and Western-funded multi-national organisations to the governments of affected countries.

This is a very different thing, and could have serious negative consequences. Foreign aid, although well-intentioned, creates welfare dependency on an international scale. People become accustomed to thinking that they do not have to pull their own weight: someone else will always be there with a handout. The effects on the recipient nations are the same as those on long-term welfare support in our own country: industry and initiative are suppressed, sloth, self-pity and mendacity are encouraged.

Giving people money doesn’t make them rich. No rich country in the world today became rich because of free or subsidised transfers of capital from other countries. Wealth is the product of hard work, inspired by entrepreneurial vision. Getting a handout just puts off the day when you realise you have to roll your sleeves up and get down to it. There is a direct correlation between the amount of aid nations have received and their poverty and backwardness. Most foreign aid has gone to sub-Saharan Africa, and the results are there for all to see. Do we really wish to inflict this on the peoples of South East Asia, where a number of countries already have flourishing economies? Indeed, it is not unusual to hear people calling for trade barriers to protect our home-grown producers from the ‘unfair competition’ of Asian suppliers! The irony is that those calling for protectionist measures are often the same people who demand more foreign aid.

Gordon Brown and others have been speaking of a new Marshall Plan. This is misleading, since the Marshall Plan, which was a great success, had a clearly-defined and time-limited goal: to rebuild the devastated infrastructure of Europe after the Second World War. In fact, Europe got back to work so quickly that the Plan was curtailed earlier than had been estimated. It was never intended to be a permanent stream of funding, which is what the foreign aid lobbyists now demand.

Gordon Brown’s dream of managing the affairs of developing countries from the West, at a cost of hundreds of billions of dollars, is not only completely politically unfeasible: it would actually leave the people of the ‘beneficiary’ countries worse off.

Posted by at January 5, 2005 06:16 PM

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