NCPA - National Center for Policy Analysis

How Welfare to Foreign Countries Harms Them

August 1, 2001

Foreign aid not only does nothing to actually help those who receive it, it often harms them. This is becoming increasingly clear to aid recipients, some of whom now actually refuse aid.

Consider these examples from a recent report in the London Daily Telegraph:

  • When impoverished Malawi got its annual aid grant of 52 million pounds from Britain recently the government's first act was to spend 1.7 million pounds to buy 39 brand new S-class Mercedes automobiles for cabinet ministers.
  • Canadian aid recently paid to build a new international airport in remote El Dorat, Kenya; but apparently, the only plane that uses it is that of President Arap Moi, whose home town is nearby.
  • British aid to the Palestinians was supposed to build housing for the poor -- instead, it built luxury apartments for friends of Yasser Arafat.

Where the aid is not stolen, it often does more harm than good. The Washington Post and Wall Street Journal reported last year that World Bank aid destroyed the Mozambique cashew and sugar industries. Now, even some aid recipients are asking for an end to aid.

  • In a February New York Times Magazine interview, Yousif Kowa, leader of a poor tribe living in the Nuba Mountains of Sudan, rejected foreign aid for his people because he said it would destroy their self-reliance, based on cases he had seen where productive farms were destroyed by food aid.
  • In May, the Atlantic Monthly reported that Mogadishu, Somalia, has boomed since 1995, when aid was cut off due to the breakdown of civil government.

Foreign aid is like welfare, and reforming it may be the best thing for its recipients.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, August 1, 2001.


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