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The Dark Side Of Development Aid

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'Public money is like holy water: everyone helps himself to it' – Italian proverb.

The stereotyped image of a western aid worker is part of media folklore: a white woman dressed in pale blue frock, tired but pretty, measuring the circumference of black children’s arms or distributing biscuits to listless children with distended bellies. She is also seen on the scene of appalling epidemics directing workers to dig pit latrines. This powerful image is reinforced by the electronic media making the aid worker a potent symbol of the fundamental decency and rightness of international aid.

The emotional appeal of mass suffering is strong and direct. The Pavlovian reflex is to reach for the chequebook and make contributions to voluntary charitable organizations such as Oxfam, World Vision, CARE Incorporated and Medecins Sans Frontieres. Voluntary agencies rake in huge funds estimated to be in the region of $2.4 billion a year to finance humanitarian aid work in poor countries.[1] The media attention on the Ethiopian famine raised the contributions to $ 4 billion in 1985. Total aid in 1987 was just over $50 billion. In the nineties it rose to $60 billion and today it is still growing.

Hancock’s book, The Lords of Poverty is a passionate denunciation of the freewheeling lifestyles, prestige and corruption of the multibillion-dollar aid business. He points out that the charitable impulse is often exploited with appropriate media hype to make refugee crisis, earthquakes, floods and other catastrophes into money-spinners. The impulse, argues the author, is a double-edged sword as it on one hand raises huge money and on the other it stifles questions about the use of the money.

The author is at his polemical best when he demolishes the myths of aid agencies. For instance, the Hunger Project received donations totaling $6,981,005 in 1985. Out of which a sum of $210,775 was passed on as grants to organizations involved in relief work. But the rest a staggering sum of around $6,770,000 was spent on enrollment services, committee activities, and fund raising and phone bills.[2] In 1984 The Hunger Project’s British office raised British pounds 192,658 from the public of which a paltry sum of pounds 7,048 went to the third world.[3]

In 1985, International Christian Aid (ICA), a large US voluntary organization, failed to send a single cent to Ethiopia out of the $16 million raised for famine relief.[4] A close analysis of ICA’s 1983 expenditure showed that just 41% of its income went towards its humanitarian objectives. A similar example is that of Dallas based relief organization, Priority One International, which spent 18 cents out of every dollar it received for charity.[5]

Disillusioned with his own experience as aid worker in Ethiopia during the famine in 1984-85, Hancock wryly observes that contrary to media reports that play up the relief workers as hard pressed saints, recipients of charity have expressed doubts about those who come to help. As one African refugee cheekily asked, ‘Why is it that every US dollar comes with twenty Americans attached to it?’[6] The truth of the matter is that in many third world disasters, considerable amount of money is spent on the expertise provided by the Americans and Europeans.

According to a detailed report on refugee relief in South-East Asia most of the Red Cross staff enjoyed the food imported from Europe while the refugees starved. In Thailand the Swiss went in air-conditioned cars and spend their weekends on the beach.6 At the height of the drought in Sudan in 1985, the Hilton Hotel in Khartoum (room rent of $150) was full with aid workers to assess the tragedy.[7]

‘The folly, irrelevance- and sometimes dangerous idiocy of much that passes as humanitarian assistance’ writes Hancock ‘are not publicized by the agencies.’[8] Hancock cites documented proof of relief work in Somalia where refrigerators flown in from US proved useless as they operated on 110 volts while in Africa they had to operate on 220 volts. Laxatives and anti-indigestion remedies were other favorites among aid agencies that were required to provide relief to the hungry. A Public Health Official in Nicaragua exasperatedly said, ‘whenever anybody donates a medicine, there just seems to be an overdose of milk of magnesia. We said we could use it to whitewash the building.’[9] Other useless items shipped to hot African countries were electric blankets and frostbite medicines from USA. Huge consignments of Go-slim soup and chocolate flavored drinks for diet conscious consumers were sent to starving Somalians.[10] Flimsy shoes were sent as emergency aid to Mozambique where woman have to walk several miles to fetch water.

More controversially, the author asks a question which is central to the economies of the developing world, is aid helping the poor countries? Or is it creating dependency, which is exploited by the West? Hancock addresses the issue with a bluntness that is both honest and refreshing. According to him if all financial flows from North (Rich nations) to South (Poor nations) and from South to North are totaled an interesting fact emerges: since the early 1980’s as a result of decline of new lending by private banks coupled with repayments of high interest rates on old loans, the wealthy countries have been net recipients of funds from third world and not net donors to it even when Overseas Development assistance is taken into account. The amounts paid towards debt servicing by the poorer countries to rich countries between 1980 and 2001 came to $4,500 billion.[11] Thus the notion that the Rich countries aid or help third world countries is highly suspect on the basis of the negative transfers alone.

‘In these closing years of the twentieth century’, concludes the author, ‘the time has come for the lords of poverty to depart. Perhaps when the middlemen of the aid industry have been shut out it will become possible for people to rediscover ways to help one another directly according to their needs and aspirations as they themselves define them.’[12] Only then we shall repudiate the false claims of the lords of poverty and discover the true meaning of economic empowerment.

[1] Aid for Development: The Key Issues, World Bank, Washington, DC, 1986.
[2] National Charities Information Bureau, New York, 29 April 1986.
[3] Sunday Times, London, 7 December 1986
[4] Daily Mail, London, 14 January 1985.
[5] Lords of Poverty, Graham Hancock, page 6.
[6] Lords of Poverty, Graham Hancock, page 7.
[6] Quality of Mercy, William Shawcross.
[7] Lords of Poverty, Graham Hancock, page 8.
[8] Lords of Poverty, Graham Hancock, page 12.
[9] Plain dealer, quoted in Lords of Poverty, page 13.
[10] Help Yourself: The Politics of Aid, Third World first Links Magazine no 20, Oxford, September 1984.
[11] Who owes who, global Issues, page 83.
[12] Lords of Poverty, Graham Hancock, page193.

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About Socrates

  • The thing about aid programs is that they aren’t often designed with the recipients in mind – they are often driven by internal motivations – social, religious and political, – that can easily skew the purpose of the aid program.

    The one that springs to mind is the endless use of food aid programs as a solution to farm product surpluses which results in excess food products being “dumped” on stricken nations in order to shore up the produce prices at home. This was a common practice throughout the 60s, 70s and 80s. it kept the western farmers happy, made the government happy as they were seen as contributing yet did realtively little to change the systemic problems in the recipient state, often making matters worse by causing the prices for local subsistence farming to drop, resulting in fewer local agricultural opportunities.

    I think the most effective model is one such as the Grameen Bank has demonstrated – making the resources, the opportunity and the capital available for people to pull themselves out of poverty.

  • I agree with all of what you have pointed to in the international aid situation and have seen these things first hand as the director of an ngo working in Costa Rica and the US.
    Regarding the last comment, I struggle a bit with the idea that putting clear, fair opportunity in front of the impoverished is the greatest answer. I think this comment and point of view may be ethnocentric. In truth, poverty is not about people with all of our skill sets who have just not had the cash in their pocket to do what we do. Poverty and poverty that has passed from generation to generation has significant effects on people including their inability to receive education, effects on their identity that some times take years to even generations to work out and more.
    In other words, if you just level the playing field and create development opportunities so that the poor can get to them, you haven’t done much at all. Who will train them to read so that they can read the announcement of these opportunities? Who will train them in regards to how to handle the finances they receive and how to make something out of it? Who will help them overcome the lack of self-esteem that comes with ignorance even after the ignorance has been displaced through education/
    Development work has to involve getting dirty. We can’t just give from the sidelines. We have to walk in and walk with those who need help walking out of poverty.

  • Ethnocentric? Last time I looked the Grameen Bank was a project that came out of India by Muhammad Yunus – not a Western-based aid organization, and microloans are not a program established on capitalist banking standards.

    I’ll also note that I suggested the model was a good one, not that it be used in exclusivity or in isolation, without either education or training programs.

  • Re: Comments Editor-

    Please be advised that for some reason the system is catching the word “micro -dash- loans” as a banned word….not quite sure why.

    Maybe it’s being ethnocentric.

  • Rufus Brown

    This is all part of a well orchestrated plot to keep African Americans around the world in poverty. This way they won’t have the means to come to America. Meanwhile, the government is endorsing drug sales to African American youths in America, so that they remain in poverty, and eventually die. Its all being run by the white men in ties.

  • Rufus Brown

    Maybe it’s being ethnocentric.

    What’s that suppossed to mean?

  • Baronius

    Rufus – say “black” when you mean black. Your comments don’t make any sense if read literally. Who are the African Americans in Africa?

  • Rufus Brown

    Cause i don’t wish to give white people the wrong idea. Calling a black man “black” is racist, unless you are black.

  • Grameen Bank and Mohammed Yunus are from Bangladesh, not India, and to not know that despite the Nobel, and the attendant publicity displays a certain ethnocentrism itself – don’t take this personally, of course:)

  • Baronius

    Rufus, I think you missed my point. There are no “African Americans” around the world. They’re African Russians, African Indians, African Africans…

  • Sorry Aaman, you are absolutely correct and I actually know that.. .I have no idea why I had a slight brain spasm and typed India rather than Bangladesh.

    Rufus, my comment “Maybe it’s being ethnocentric” was a joke about the comment system disallowing an innocuous word in my previous comment, as the earlier commenter (#2) was acccusing me of being ethnocentric in my first comment, a fact that makes me think he doesn’t quite understand the definition of the word…

  • While I agree with many of CR Sridhar’s comments on traditional development aid, the information about The Hunger Project is highly misleading. Back in 1985, The Hunger Project was NOT an aid organization and did not raise money for aid. At that time, it was much more like the One Campaign – raising money for education and advocacy – and received high marks from watch dog agencies for how it used it. After 1991 – witnessing the failure of traditional approaches – it re-invented itself to take direct development action, but based always on principles of self-reliance. We deeply regret that a 21-year-old misunderstanding has been republished, and hope that it will soon be corrected.

  • Rufus Brown

    You guys are right. I just see racism everyday, so i get wary of it.

  • socrates

    Dear John,
    The documentary evidence against The Hunger Project is provided by the US National Charities Bureau (29-04-1986) and to my knowledge the basic accusation against the Hunger Project has not been retracted by the Bureau. Also the figures given by the bureau and quoted in the article have not been a subject matter of any controversy. Your reference is invited to page 6 of Hancock’s book Lords of Poverty.

  • socrates

    Dear Jamie,

    Your comment’putting clear, fair opportunity in front of the impoverished is the greatest answer.’offers the key to economic empowerment of the poorer nations.It is the terms of unequal trade between rich country and poor country reflected in rigged commodity prices(cheap raw materials) and cheap labour wages that the wealth of the poorer nations are siphoned off to rich countries.If fair wages and fair prices for raw materials are paid then there would be no need for doles to be handed out to poor countries.

  • socrates

    Dear Deano,
    While it is true that the micro credit has been successsful in Bangladesh it would be a mistake to view it as a development panacea.Micro credit should be a part of a broader process of development such as working towards reducing asset inequalities,better and more egalitarian access to health and educational services and generating more jobs for the poor.Moreover, the money distributed through micro credit is so small and the periods for repayment so short that they cannot lead to asset creation.Some economists have suggested that micro credit is at best a consumption stabilizer reducing the adverse effects in the wake of natural disasters.
    Even today,in Bangaladesh the micro credit scheme is difficult as a viable commercial proposition on account of high costs of transaction and monitoring.Hence it has to depend on subsidies.(reference Jayati Ghosh- Frontline 3-11-2006)
    These comments merely highlight the dangers inherent in micro credit policy as a whole and does not detract the splendid achievements of Mohd Yunus and Grameen Bank.

  • “Cause i don’t wish to give white people the wrong idea. Calling a black man “black” is racist, unless you are black.”


    The Jews who came home from Ethiopia to escape Christian oppression there prefer to be called Etiópim (Ethiopians) or shHorím (blacks). I’ll follow the preferences of my fellow Jews, the shHorím over yours, thank you.

    “Africa” is a place. “Black” is a skin color.

    Shabbat Shalom,

  • socrates

    clarification on Hunger Project-
    Critics like Hancock have pointed out that THP was long on hype and short on action as the money collected by it rarely goes towards feeding the hungry.

    Though THP in 1985 was not an aid agency, it was formed with the intention of eradicating hunger and donations were collected for this purpose. Critics have complained that when this is so the donors expected that a great portion of the contributions should go towards feeding the poor and not on motivational seminars and administration expenses.

    The piece The Dark side of development aid written by me relates to the early years of THP with the information culled from The Lords of Poverty by Hancock who in turn relied on National Charities Information Bureau, New York,(29-04-1986). Even today THP has invited public criticism for adopting flawed strategy in combating hunger. Mr. Coonrod has not provided any information or material where Mr. Hancock has retracted his comments on THP. Recently, THP has been accused of stifling freedom of expression on the net by adopting strong-arm legal tactics.

  • You must always ask yourself isn’t it better to do something than not to do something. Of course the implementation of something right is never free from the corruption of reality. But it’s good that we try regardless and of course we should strive to limit the negative influences such as corruption, personal gain and so forth. But that should not keep us from giving.