MONEY WILL NOT CURE GLOBAL POVERTY
July 14, 2008
Leaders of several underdeveloped African nations came to the Group of Eight summit in Japan last week and requested more financial aid from G8 countries, says Erin Wildermuth, a Koch Journalism Fellow at the American Spectator.
Thus far, only $3.9 billion of the promised $26.1 billion in aid to Africa has been dispersed, according to a report put together by the nonprofit ONE campaign.
But when countries receive more aid, the effectiveness of this money is heavily disputed, says Wildermuth:
- Since the 1980s Africa has received over $450 billion in development assistance.
- In comparison, the Marshall Plan only designated $13 billion (about $110 billion to $140 billion adjusted for inflation) to rebuild a large percentage of Europe after World War II.
While aid to Africa may not be useless, it certainly hasn't had the lasting, monumental effect everyone is hoping for, says Wildermuth. How could it when many developed nations are taking as much or more money from developing countries as they are handing out?
- Burkina Faso received $10 million in development aid in 2002, according to the National Center for Policy Analysis.
- Burkina Faso lost $13.7 million in export earnings because of depressed cotton prices.
- Togo received $4 million in aid and lost $7.4 million, once again because of export earnings.
The depressed prices and export losses are the fault of agricultural subsidy programs in first world nations, including the United States. Wildermuth proposes two solutions that will guarantee monumental accomplishments in Africa: fixing our current system to make it fairer and changing structures to encourage private aid from individuals and corporations to Africa.
Source: Erin Wildermuth, "Money Won't Cure Global Poverty," American Spectator, July 10, 2008.
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