Monday, January 03, 2005

Let's just throw money at the problem!

There is an essay by Jeffrey Sachs in Time Magazine dealing with the fact that those in poor countries suffer much greater from natural disasters than those in wealthy ones. His solution: more development dollars. He blames the developed world for not providing sufficient funding to impoverished nations. This is an obscenely simplistic argument. He makes the same point that I would expect to see in a first year undergraduate political science essay: "Currently, [U.S.] military spending outpaces our development aid by roughly 30 to 1. " Evil Americans, they sure are evil.

In 2002, the United States spend 3.4% of its GDP on military spending. That's a lot of money. Keep in mind, however, that the U.S. has by far the largest military in the world and is fighting the war on terror and helps to maintain peace in large parts of the world. How do other countries stack up? Countries, say, that receive development funding? Angola spends 3.7% of it's budget on military spending, Sri Lanka (to whom we are sending all that aid) 3.1%, India (again with the Tsunami aid) 2.3% (nukes cost $$) Pakistan 4.7% (ditto on the nukes), Ethiopia 5.2%, Yemen 7.1%, Burundi 7.6%, and Eritrea a whopping 23.5%!!! (all figures to SIPRI). Given the role of the U.S. military in the world, it is not a reasonable point of comparison. How do other nations spend? Canada spends 1.2% of GDP on the military, Australia, 1.9%, Germany 1.5%, and the relatively militaristic (by modern European standards) France 2.5% and England 2.4%... and they can afford it.

I happen to be sympathetic to the idea that wealthy countries should be spending more on development aid, but it needs to go to countries that aren't already wasting money on vast military budgets. And, ultimately, development aid is not the answer. No amount of aid could have prepared these countries to protect their citizens against the kind of devastation caused by the tsunami. For that, these nations need to turn their economies around so that they are equipped to respond to the needs of their citizens. This requires political, as well as economic, reforms.

Sachs mentions the fact that millions die unnecessarily each year due to malaria, a fact that can be remedied in part with the use of mosquito nets. What he failed to mention is that a number of African countries continue to impose high tariffs on bed nets, thus making them unaffordable to the average citizen. While some have committed to getting rid of these tariffs as part of the Roll Back Malaria project, the fact that they exist in the first place says a lot about the governments in those countries.

Keeping large parts of Africa and Asia on welfare is not the solution. We need to help these countries to build their ecomomies through trade, not just toss more money at them year after year. We have been doing that since independence and it hasn't solved anything. Nations, like people, need to become self-reliant if they want any hope of a decent future. There are definitely things that wealthy countries could do: encourage freer trade, get rid of agricultural subsidies that have helped to destroy agrarian economies -- especially in Africa, and reward countries that show a real commitment to improving the lives of their citizens. But if we want real change, poor countries are going to have to do a lot of work themselves. It is easy to fall into the mindset that they are so poor and we are so rich, so it is all our fault. Besides not being true, it doesn't solve anything.

1 comment:

ciclouseau said...

All the western countries are bending over backwards to outspend each other for the relief efforts. So much that President Bush has urged citizens to donate privately, now that the government is "only" in second place in the relief efforts after Japan dropped its $500 million.

Let's see how fast we can throw money at the problem! It's a competition!!

Meanwhile, India is turning down aid.