The Guardian: As a system, foreign aid is a fraud and does nothing for inequality

he five poorest countries in the world, measured by GDP per capita, are the Democratic Republic of Congo, Mozambique, Uganda, Tajikistan and Haiti.

One might imagine, then, that these countries are among the top recipients of UK aid. Wrong. The main beneficiaries are, in fact, Pakistan, Syria, Ethiopia, Nigeria and Afghanistan. Not one of the five poorest countries is among the top 10 recipients of British aid. [...]

Nor is it any different with multilateral aid (funds channelled through international organisations such as the World Bank rather than directly between donor and recipient). Again, not one of the poorest countries is among the top 10 recipients of multilateral aid. [...]

Half of all international development aid is “tied”, meaning that recipient countries must use it to buy goods and services from the donor nation. As the USAid website used to boast (until the paragraph became too embarrassing and was deleted in 2006): “The principal beneficiary of America’s foreign assistance programmes has always been the United States. Close to 80% of the US Agency for International Development’s contracts and grants go directly to American firms.” Aid has “created new markets for American industrial exports and meant hundreds of thousands of jobs for Americans”. Long before Trump entered the White House, USAid was “putting America first”. [...]

Aid not only boosts the economies of rich countries but also promotes their foreign policy aims. As a 2014 report by the US Congressional Research Service put it, aid “can act as both carrot and stick and is a means of influencing events, solving specific problems and projecting US values”.

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Quartz: Mozambique’s forgotten “East Germans” are still fighting for their communist payday

“We were going to create a society outside capitalism”, Jose, fifteen at independence in 1975, recalls Frelimo’s aim to create a non-tribal, non-racial, non-capitalist Mozambique. And to achieve this, the party sought not only to recreate the country but its citizens too, to fashion the homen novo: a new man, modern, skilled, secular and socialist; free from African backwardness, traditions and superstitions. [...]

But it was also a country to which Mozambique owed a large debt. And here was a more hard-edged reason for Frelimo sending Jose, and 20 000 others, to its communist ally over the 1980s: to help pay off the 200 million marks (approximately US $110 million) owed to an East Germany itself short of labour. And here too the terms of their migration were set: workers would receive 40% of their salary in Germany; the rest would automatically be transferred back to the government in Maputo, to be paid out in Mozambican meticais on their return. [...]

It wasn’t, of course, to last. For amidst all the euphoria around the fall of the Berlin Wall in 1989, there were thousands of Mozambicans in Rostock, Leipzig, Dresden and Berlin itself both fearful for their immediate safety—some remember roving gangs shouting ‘foreigners go home”—and worried over their long-term future. In the end, at their places of work, they were offered a choice. “Each one of us had to decide in that moment”, Jose remembers: they could stay, but would have to leave their jobs and support themselves; or they could return to Mozambique and pick up the 60% of their wages that had always been sent to their government. “We were tied”, he says, ruefully, as the vast majority opted to go home to claim what they were owed.  [...]

Yet for the magermans, history did not end, moving frictionlessly from a failed socialist past to a prosperous capitalist present. Rather, they are stuck in it. Jose is visited every year by Birgit, his enamorada from Dresden; others have half-Mozambican sons and daughters they cannot see for the lack of a visa; and they are all united by the dwindling hope that, one day, they will receive the life-changing amount they are rightfully owed. For now, admirably and without expectation, Jose and the rest will carry on their protest to a government and country that no longer seem to care: “We have nothing else. They take away your rights. You have no job. It’s the only thing you can do.”

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Al Jazeera: Africa is not poor, we are stealing its wealth

But there's also $203bn leaving the continent. Some of this is direct, such as $68bn in mainly dodged taxes. Essentially multinational corporations "steal" much of this - legally - by pretending they are really generating their wealth in tax havens. These so-called "illicit financial flows" amount to around 6.1 per cent of the continent's entire gross domestic product (GDP) - or three times what Africa receives in aid.

Then there's the $30bn that these corporations "repatriate" - profits they make in Africa but send back to their home country, or elsewhere, to enjoy their wealth. The City of London is awash with profits extracted from the land and labour of Africa. 

There are also more indirect means by which we pull wealth out of Africa. Today's report estimates that $29bn a year is being stolen from Africa in illegal logging, fishing and trade in wildlife. $36bn is owed to Africa as a result of the damage that climate change will cause to their societies and economies as they are unable to use fossil fuels to develop in the way that Europe did. Our climate crisis was not caused by Africa, but Africans will feel the effect more than most others. Needless to say, the funds are not currently forthcoming. [...]

If African countries are to benefit from foreign investment, they must be allowed to - even helped to - legally regulate that investment and the corporations that often bring it. And they might want to think about not putting their faith in the extractives sector. With few exceptions, countries with abundant mineral wealth experience poorer democracy, weaker economic growth, and worse development. To prevent tax dodging, governments must stop prevaricating on action to address tax havens. No country should tolerate companies with subsidiaries based in tax havens operating in their country.

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