Editorial
Land Aid for Africa
by Fred E. Foldvary, Senior Editor
Looted, squandered, wasted!
by Fred E. Foldvary, Senior Editor
This is what has happened to much of the aid to Africa, and this is what most African governments have done with the rich resources of Africa. Those who support the Live8 movement want to throw even more aid to Africa. But without governmental reform, it’s like having a huge tarantula spider in your house, which bites you and eats up your food. The solution is to get rid of it, not to keep feeding it in the hope that it stops biting. It won’t stop, because it thinks biting you will make you feed it!
The human, natural, and produced resources of Africa have been looted by corrupt African tyrantulas, who siphon the wealth to their palaces, to foreign banks, and to arms to keep themselves in power. Aid and resources have been squandered in constant civil wars and cross-country wars, including mass killings in the former Belgian Congo, in the Sudan, and in Rwanda. And the vast potential rent from African land has been wasted as the governments have imposed a deadweight loss via price controls, taxes, trade restrictions, and land takeovers.
There is now a mass movement to forgive the debts owed by African governments. It has been widely publicized that many Africans suffer from hunger and AIDS and other diseases. Clearly, funds which are now spent on interest on their debts could benefit Africans if the funds were spent for medicine, food, and development, as the Live8 leaders seek. But this debt is the outcome of many billions of dollars loaned for just such purposes by the World Bank, foreign governments, and private lenders, loans which were looted, squandered, and wasted.
If the policies of the African tyrants do not change, the funds that are now paying interest will instead again be looted, squandered, and wasted, and African folks will not gain at all. Paying interest on the debt actually helps Africans if the funds would otherwise be used to buy more weapons of oppression. That is why the G8 governments seek to tie the debt cancellation to a change in the policies of the governments. The nations of Africa need governmental reform more than aid or the cancellation of their debts. The African country Botswana has enjoyed rapid growth with relatively little aid, due to its excellent economic policies. Other countries could do likewise.
On July 2, over two billion people around the world saw and heard on TV, radio, and the Internet the Live8 concerts that took place in London, Paris, Berlin, Moscow, Rome, Philadelphia, Tokyo, Johannesburg and Toronto. The aim of the music marathon is wonderful: to make poverty history in Africa. They seek to influence the Group of Eight government chiefs who were to hold a summit in Scotland. Its precedent was the Live Aid concerts 20 years ago, which were to benefit the starving Ethiopians. But unfortunately, much of that aid was squandered by the Ethiopian government, much of it going to its military, a lesson that seems to have been forgotten.
To truly make poverty history, what is needed mot of all is true free trade, not aid. The Live8 leaders recognize that “trade justice” is needed. The G8 chiefs first of all need to change their economic policies, and drop all trade barriers on imports from Africa and other developing economies. The U.S. and Europe also need to stop dumping subsidized food into developing economies, where it devastates local farmers.
The Live8 leaders recognize that much previous aid was not well used in the past, and they seek “better” aid. But better aid requires better governmental policies. The G8 and other chiefs of state should cease aid so long as the African tyrants continue their looting, squandering, and wasting of African resources. Otherwise, aid is counterproductive. Otherwise, aid feeds the biting tyrantulas.
The looting of Africa goes back centuries to the slave trades by the Europeans, Arabs, and Africans themselves. After looting human bodies, colonial powers looted the resources of Africa. But most of the looting, squandering, and wasting has taken place since the 1960s, after independence from the colonial powers. The forests have been chopped down, much of the wildlife has been poached and slaughtered, and minerals extracted without benefitting the poor.
Africans in the old Belgian Congo were much better off than after independence, when the tyrant dictator looted its rich mineral resources, animals, and rain forests. The chiefs of the state of Katanga, where much of the minerals lie, wanted to secede from the Congo, but the U.N. intervened to stop the secession. To what outcome? To dictatorship and an international war that has killed millions, to loot the resources of the Congo. The Congolese would have been better off without this futile UN intervention.
Of course the colonial powers -- the British, the French, the Belgians, the Portuguese, and the U.S. in Liberia, failed to establish lasting democracies prior to independence. They created artificial country boundaries and destroyed the native cultures and governing structures, and so left the rich resources ripe for plundering by tyrants.
Now there is a movement towards democracy and market economies, but the land issue is not being confronted. African land is rich. There is still much richness in minerals, animals, oil, fertile soil, and city sites. African governments could get sufficient revenue for public benefits by tapping the economic rent of the land. African economies could develop rapidly by eliminating punitive taxes on goods and labor, and removing restrictions on trade. Foreign investment would then pour in. If they did that, then yes, cancel the debts. But if market-friendly policies are not implemented, then debt cancellation will be futile.
What Africa needs is more than foreign aid or debt forgiveness is land aid. Africans need to harness the rent of their rich land, and use land rent to end poverty. If the organizers of Live8 were to understand the importance of free trade and land rent, and hold concerts for Land Aid, then we would really be on the road to Make Poverty History in Africa!
Copyright 2005 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
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