Foreign Aid, Moral Dilemma

Feed the people, or starve the régime?

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On a recent visit to North Korea, I visited an EU project — a seed processing plant.  Frankly I wondered why it was worth a two-hour journey on bad roads, dodging potholes, and two spine-jarring miles down a rutted lane that scarcely deserved the name, in order to see a seed plant at Unsan.  But it proved to be interesting.

This plant is in the business of producing hybrid maize, which in the NK context enhances crop yields by around 15%.  The seeds are widely used across NK, and have the potential to deliver total yield increases on a scale which is comparable to inward shipments of food aid.  The project could go some way towards making NK self-sufficient in grains.  Apparently to create the hybrid, it is necessary to grow two varieties of maize in the same field — one row male, three rows female, if you need to know — and to do various clever things to ensure that they hybridise appropriately.  The resultant seeds are then dried and shipped across the country (after negotiating that non-road — my good friend and colleague Anna Rosbach of Denmark worried repeatedly over the lack of infrastructure and the barrier it created to food distribution).

The hybrid seeds do not reproduce as hybrids, but as a mix of the two original varieties, so it is necessary to repeat the process year after year.  Interesting to reflect that when the EU funds a project like this, requiring farmers to source seeds from this plant every year, we all applaud.  But if Monsanto produces seeds that also require annual purchases from a single source, people write to their MEPs complaining about the wickedness of American capitalists.

But the project got me thinking about the underlying principles of foreign aid, which deserve scrutiny, especially when, reputedly, DFID, the government’s department for overseas aid, has such generous funding that it struggles to spend it all.

The first line of argument against foreign aid is that much of it is unaccounted for, and large sums end up used for arms purchases, or in the Swiss bank accounts of leading local politicians.  OK, say the proponents of aid.  Let’s not give the money to governments.  Spend it directly on projects that benefit the people — medical clinics, or agricultural projects like that at Unsan.

This is, if you like, “hypothecated aid”, by analogy with hypothecated tax.  But such hypothecation rests on the dodgy assumption that you know what would have happened otherwise.  If you hypothecate a tax for, say, cancer research, you cannot be sure that a cynical government will not simply cut back on what they would otherwise have spent in that area.  Similarly, if you spend money in NK on food aid, or health care, or agriculture, you can assume that to a considerable extent you relieve the government of the necessity to spend in that area, leaving them more resources for nuclear weapons and missiles.  In the case of food aid, you can bet that much of it fills the stomachs of NK’s million-plus soldiers.

No one wants anyone to starve.  But therein lies the dilemma.  In taking action — even rather direct action — on food or health-care, for the very best humanitarian reasons, are you in danger of unintended consequences and perverse incentives?  Do you make it easier for a bad government to do bad things?  More generally, are you actually helping to sustain a brutal and oppressive régime that denies fundamental freedoms, maintains vicious concentration camps, and undermines regional stability with nuclear weapons, posing a threat to its neighbours?  It is a genuine moral dilemma.  But given the parlous state of our own economy, I’d say “If in doubt, don’t”.

By the way I was very interested to see the bold red and gold sign outside the factory — no doubt also funded by EU money.  Did it say “Funded by the EU”?  Did it say “Unsan Seed processing factory”?  I caused enquiries to be made, and found it translated as “We will follow our leader to the end”.  I fear they will.  And the end will be poverty and isolation.

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12 Responses to Foreign Aid, Moral Dilemma

  1. Eric Worrall says:

    I haven’t contributed a penny to foreign aid since I read the following interview with a leading African economist in Der Spiegel:-

    http://www.spiegel.de/international/spiegel/spiegel-interview-with-african-economics-expert-for-god-s-sake-please-stop-the-aid-a-363663.html

    As with any other government programme, first ask what damage it causes.

    In the case of the seed plant, my guess is it removes any need to train local North Korean biochemists, and deprives any who have somehow acquired such training of jobs. It certainly helps stabilise Dear Leader’s regime (see – this time we actually delivered a larger harvest), and ensures he has more money to spend on nuclear weapons, money harvested from the slightly reduced internal security budget.

    • I agree with your sentiments, Eric. But if you’re a tax-payer, then I’m afraid you do contribute rather lot to foreign aid.

    • catalanbrian says:

      An excellent article which really does sum up what is wrong headed about aid. That is not to say that international development – a bit of pump priming here and there – is a bad thing. Additionally the best aid is that of trade. We should be purchasing more things from the “developing world” and investing in income producing projects rather than throwing good money after bad on wrong headed infrastructure schemes where most of the money disappears down the throats of local politicians and businessmen. I will never forget the comment made by a friend of mine who was running a water pan construction project in northern Kenya. The project, funded by the Canadian government had been provided with diggers and bulldozers, graders and endless equipment and these machines and the wages of the numerous workers had been put under the overall control of the local Ministry of Water Development. After a period of about a year of little action because the machinery was constantly being used on the MInister’s or his mates’ own pet projects my friend, when asked how the project was going responded with the immortal comment “Well if they had given me a pick and a shovel I could have achieved more on my own than this whole fucking shebang has thus far”! And, sadly, that is the story of just so many aid projects. And I would comment that I spent many years dealing with the continent of Africa and I have dozens of similar tales to tell.

  2. Me_Again says:

    Excellent article Roger.
    Definitely food for thought.

  3. limogerry says:

    I suspect “glorious leader” was the real translation!

  4. David says:

    Was there the eussr flag on display Roger, as all members have to do when receiving our money back from the commizars, if not will the barroso fine them for not flying flag and having the damm thing on letterheads, should NK use such things.
    I agree, the more aid we give, not just to NK, but to any, gives them a get out from looking after their own people, whilst here in the UK I read yesterday the English taxpayer is now likely to have to fund immigrant mortgages, another winner from the eussr folks.

  5. cosmic says:

    People aren’t hungry in North Korea because of lack of knowledge, it’s because the government sees other priorities.

    I can see no point in this meddling.

  6. I don’t often laugh when I read blogs – but this one was a rare exception! I loved the translation!

    I wonder myself whether we might not really be better off in a perfect world leaving charity to the experts – by which I mean the Churches. But then I really do not know how much money is needed to bribe our enemies/friends into compliance.

    • Of course foreign aid is insignificant compared to two other vital revenue streams for poor countries: (A) Trade; (B) Remittances from their citizens overseas. Let’s concentrate on those and cut the aid budget.

  7. Pingback: Foreign aid: Are we helping the poor, or subsidising despotism? | Roger Helmer MEP

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