How the Rich Profit off the Poor

Article excerpt

After many years in which developed countries were more part of the problem than the solution, the United Nations Conference on Population and Development, held in Cairo in 1994, established some goals to begin reversing this pattern. Unfortunately, although the developed nations paid lip service to this reversal, they've done little to bring it about.

In truth, what action there has been has weakened accomplishments at Cairo. For example, within only a few months, the United States agreed to pay some of its back dues to the UN in a so-called compromise that inhibits the ability of family-planning groups around the world to provide reproductive health services.

More recently, Vice-President Al Gore told delegates at the first UN Security Council session on a global health issue that "the number of people who will die of AIDS in the first decade of the twenty-first century will rival the number that died in all the wars in all the decades of the twentieth century." Calling this--reasonably enough--a "threat of the greatest magnitude," he added proudly that the United States hoped to increase its overseas spending on AIDS by $150 million.

Ironically, however, according to testimony before a congressional subcommittee by Dr. Peter Lurie of Public Citizen's Health Research Group, the United States could increase poor nations' access to critical medications "without spending a penny." Mechanisms called compulsory licensing and parallel import--perfectly legal even under World Trade Organization rules--could substantially lower the price of needed life-saving drugs. Instead, the U.S. government has pressured developing countries not to implement these mechanisms, placing, said Lurie, "the profit motive of multinational drug companies over the public health needs of desperately ill patients."

In fact, the aid programs of foreign elites have often benefited donors more than the needy for whom the programs were designated. The 1954 bill establishing the Food for Peace program--the main avenue of U.S. food aid--was designed to "improve the foreign relations of the United States" and "to provide the economic stability of American agriculture and the national welfare." It wasn't until 1961 that "to control hunger and malnutrition and to encourage economic development in developing countries" was added to the statement of purpose, although Food for Peace continued as a political rather than humanitarian instrument. Finally, in 1975, Democratic Senator Hubert Humphrey introduced legislation to make disaster relief the first priority of the program.

Aid programs are also frequently tied to the construction of unwieldy, even useless projects. What analysts call "aid monstrosities" rely on complex technology and costly expertise that mostly benefit those companies that design and construct the projects. There is the mango canning plant in Ghana that has never run anywhere near capacity because its capacity is greater than the entire world trade in mangos. There is the milk bottling plant in Sudan that has never produced a bottle of milk because the Sudanese like to drink it fresh from the animal. And there are the giant grain storage silos in Senegal that have remained empty because they're built in places where Senegalese peasants never go. Even when such aid monstrosities are benign instead of pure self-interest, this path of development often debases local living conditions, aggravating rather than relieving poverty.

Worse yet, ruling local elites, often kept in power by industrial nations--the names Marcos, Mobutu, and Suharto immediately come to mind --have copied this style of development, taking out huge loans to build showcase projects or to buy tanks and fighter planes. The result is a developing-world debt crisis that's been growing bigger every year for decades.

The price imposed for relief from this backbreaking debt is "structural adjustment": cuts in wages and in public spending, currency devaluation, and in some cases swapping debt for shares in profitable developing-world companies. …