It’s a well-known fact that Africa and countries such as Haiti and Nepal are extremely poor. We’ve all seem the tear-jerking adverts, with the sick and malnourished children. Such viewing may cause many to wonder why the Governments of wealthy countries don’t put an end to the suffering but this voice is often quelled by reports of giant charitable donations.
Back in 2012 Prime Minister David Cameron criticised other nations for their failure to match the UK’s £200million donation to east Africa in the aftermath of the famine which has left thousands literally starving to death.
America provide half of the worlds food aid and averaged $2bn in food aid over the past decade feeding 75million people a year in the process.
However behind the seemingly good deeds of the west, particularly America lies a hidden and cynical agenda that has played a hugely under rated role in the on going poverty of millions.
Following the end of the Second World War, the US found itself in a position of great surplus. The war had severely damaged every major economy except for the United States who had profited hugely by producing and selling weaponry and machinery to both sides during the war. As a result America’s economy became consumer driven and since the economies of its biggest consumers were severely damaged, the US was desperate to find buyers in order to keep up their high levels of exportation.
This is where the so-called Third World came into the picture. America loaned developing countries large amounts of money at high interest rates as a means of allowing these countries to purchase American goods. Following the 1970’s oil crisis, the profiting nations flooded American banks with their money which was in turn reinvested into Africa in the form of more high interest loans. Consequently, the debts of Third world countries began to skyrocket to the point of which several nations were almost bankrupt and unable to pay their debts.
With the banks facing financial ruin, The World Bank & the IMF (International Monetary Fund) stepped in and offered to supply these countries with the loans/lower interest rates necessary in order to service their debt on the condition that they agreed to a structural adjustment programme.
The aim of a Structural adjustment programmes according to the World Bank is “poverty reduction” but the conditionalities attached show that in reality this is rarely if ever the case. These programmes commonly call for the nation in question to sell off state industries for examples the health care or water supply industry to private owners who in many cases use it to exploit the people.
For example in 1997, Bolivia was forced to sell their water industry to Multinational Corporation Suez in order to qualify for a loan from the World Bank. However the company failed to deliver water to 200,000 people and charged $445 as a connection fee even though many people were working at the $60 a month minimum wage.
In terms of the on-going food crisis, the trade liberation demands inherent in Structural adjustment programmes play a significant role. Often, countries will be forced to open their markets to richer nations who are able to provide food at a far cheaper price which in turn hurts the national farmers & producers who simply cannot compete.
Haiti is a perfect example.
In the 1980’s Haiti produced nearly all of the rice it needed to sustain itself but in 1986 after the expulsion of Jean Claude Duvalier (who reportedly stole from the treas- ury) the country was in desperate need of money. The IMF loaned Haiti the money on the condition that they relax their trade laws and open up their markets to competition from foreign coun- tries. However this destroyed the countries rice industry; Doctor Paul Farmer was in Haiti at the time and witnessed the effects;
“Within less than two years, it became impossible for Haitian farmers to compete with what they called ‘Miami rice.’ The whole local rice market in Haiti fell apart as cheap, U.S. subsi- dized rice, some of it in the form of ‘food aid,’ flooded the market. There was violence, ‘rice wars,’ and lives were lost.”
Sadly, in 1994 Haiti were forced to open up their markets even further in exchange for another loan from the IMF and became dependant on US food aid. This has happened all over the African continent as well and as a result African countries are being forced to import large amounts of foods they could be using to be producing for themselves.
In Ghana rice imports increased from 250,000 tonnes in 1998 to 415,150 tonnes in 2003. Domestic rice, which had accounted for 43% of the domestic market in 2000, was just 29% three years later. In all, 66% of rice producers recorded negative returns, leading to loss of employment.
In Cameroon, poultry imports increased nearly 300% between 1999 and 2004. Approximately 92% of poultry farmers were forced to quit.
A massive 110,000 rural jobs were lost each year from 1994 to 2003. In Cote d’Ivoire, poultry imports increased 650% between 2001 and 2003, causing domestic production to fall by 23%. As a result prices dropped and 1,500 producers were forced to cease production causing the loss of 15,000 jobs.
Through food aid, loans and the accompanying Structural Adjustment programmes the poor coun- tries of the world are being exploited for profit. Each year, Africa spends more on debt repayments than it receives in financial aid. Countries such as Zambia and Uganda spend over four times more money on debt repayments than on health care despite rising mortality rates.
An Oxfam report released earlier this year condemned America for using food aid for its own economic benefit. The report explains that while the vast majority of countries donate food aid as a grant, America utilises a monetary food aid system.
75% of all food aid donated by the United States is purchased from American farmers at market price and then packaged and shipped by American companies. In addition to taking as much as four weeks to reach its destination, almost half of the US food aid budget is allocated to US shipping companies for transporting it. The US have also been criticised for using food aid as means of dumping genetically modified food at a profit while also advertising their products such as cereals in foreign markets.
In 2007, Venezuelan Hugo Chavez announced that his country no longer wished to be member of the World bank or the IMF stating that both organisations where “tools of the empire” that ultimately serves “the interests of the north”.
So as America and the western powers donate on one hand, they continue to rob poor countries of their ability to do for self.While America are at forefront of the operation, the UK, Japan, France and other major Governments and Banks are involved in the plan to ensure that the “Third World” remains just so in order to secure their own economic prosperity, Regardless of the millions who will suffer in the process.