Global Policy Forum

The West's Rhetoric About Foreign Aid Conceals a Greedy Self-Interest

By Steve Tibbett

They are all at it these days. George Bush wants to "attack global poverty", Tony Blair is up for "attacking the causes of global poverty" and the remaining G8 leaders are apparently engaged in "the fight against global poverty". Meanwhile, the World Bank is "fighting grinding poverty", the World Trade Organization is "reducing poverty on a worldwide basis", and the International Monetary Fund, bailiff to the developing world, is "actively combating world poverty".

The everyday language of radical campaigners has suddenly become the preserve of global policy-making and politics. And it's not just the patter that appears to be changing. Rich countries are falling over themselves to cough up new money for HIV/AIDS relief, while institutions such as the World Bank and the IMF have undergone some collective soul-searching and the EU has even declared that its recent farm deal is good for poor countries.

But does this new-found interest in poverty really reflect a sea change in the way things are being done? Hardly - you only need to look at falling aid contributions, rising global inequality, and stalled trade negotiations mired in self-interest, to realize the great and the good are not trying too hard. The policies set down by those in charge of development and the global economy are doing the opposite of what they claim - they are not pro-poor, they are pro-poverty. Far from breaking free from the neo-liberal paradigm of the past 25 years, the World Bank, the IMF and the WTO are in fact giving it a facelift. Along with the world's leading donors, they are applying the same pro-inequality, one-size-fits-all development straitjacket sported by a string of the least developed countries the world over.

Behind the re-branding, these people are still working tirelessly to make countries conform to a narrow, dogmatic development model that has consistently failed to lift nations out of poverty. Take, for example, George Bush's multibillion-dollar aid plan, announced in Mexico last year. The Millennium Challenge Account will eventually oversee some £5bn extra in aid spending. The initiative is hailed by some in the administration as evidence of a genuine pro-development stance but the money will come with strings attached. In short, if you don't pursue the requisite "economic freedoms" such as low trade barriers and exchange controls favored by rightwing US think-tanks, you simply won't get the cash.

It is not much better at the IMF or the World Bank. The IMF's hated Structural Adjustment Facility loans of the 90s came with so many conditions that the cure could be more deadly than the disease. Mercifully, the program has been replaced by the nicer-sounding Poverty Reduction and Growth Facility. To access these funds, a country is asked to write its own poverty-reduction strategy.

Now, what is wrong with that? First, the strategy has to be agreed by a joint World Bank-IMF board before any money changes hands. Not surprisingly, the board has very strict guidelines about what constitutes "good development". Second, the two organizations carry out their own country assessments. A poor assessment means far less money, and since other big donors look at these assessments, the stakes are high.

The very latest bit of neo-liberal sleight of hand is a policy called "coherence". The big players (WTO, the World Bank and the IMF) got together in May to make their policies more consistent. Fine in principle, but when the policies they are merging are at best unproven and at worst anti-developmental, opponents find themselves pining for the previous state of "incoherence".

Meanwhile, countless bilateral and regional trade agreements carry even greater demands. The US Africa Growth and Opportunity Act, for example, claims to help African countries get access to North American markets, but its website Q&A kicks off with the question: "How does the act help US firms?" Moreover, it emerged last week that George Bush blocked a reform of the desperately undemocratic World Bank that would have given developing countries a bigger voice.

This surely cannot be tolerated in the name of development. Trade negotiations and the distribution of aid by rich industrialized countries are tools of foreign policy used to further national self-interest. The developed model is the same as before: open your markets, increase your exports, privatize everything, liberalize your financial system and the rest will follow. Such fundamentalism elevates liberalization as an end in itself - the holy grail of economic progress.

So we should not be fooled by the new outer casing - fluffy phrases such as "ownership", "partnership" and "fighting poverty" are merely there to make the same bad medicine go down.