I have written before that the more aid a country receives, the more likely it is to be locked into a cycle of increasing poverty.
So it is interesting that Eritrea has just written to the UN to say it does not want any UN aid, because such aid makes the situation worse.
The reason, given in a January 26 notification letter from the country’s powerful Finance Minister, obtained by Fox News, is that “aid only postpones the basic solutions to crucial development problems by tentatively ameliorating their manifestations without tackling their root causes. The structural, political, economic, etc. damage that it inflicts upon recipient countries is also enormous.” In other words, the government argues, U.N. aid does more harm than good.
Kenyan economist James Shikawati explains why this is so in an interview with Der Spiegel. In essence, providing free food and clothes undermines any local industry, and encourages corruption and a passive expectation of rescue, which then leads to increasing resentment.
SPEIGEL: The industrialized nations of the West want to eliminate hunger and poverty.
Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.
SPIEGEL: Do you have an explanation for this paradox?
Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa’s problems. If the West were to cancel these payments, normal Africans wouldn’t even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.
What works to bring nations out of poverty, as South Korea and Taiwan have demonstrated, is open trade, democratic government, and reward for effort and invention.