Thursday, October 18, 2007

Slush Funds for Thugs

Last night's discussion at my book club focused on "The Bottom Billion" by Paul Collier. This book was focused on the "billion poorest people in the world who live in the failed nation-states and foreign aid.........." (my paraphrasing summation). It was coincidental time that I finished this book was traveling back from Brussels, Belgium this week since I had the chance to read an op-ed in the International Herald Tribune entitled, "Take it Private - Rethinking Foreign Aid" by Justin Muzinich and Eric Werker.

Muzinich and Werker note that the USA currently spends $23 billion on development aid to foreign countries which Democratic presidential candidate, Barack Obama, has called for nearly doubling to $50 billion annually. Muzinich and Werker go on to argue that instead of simply providing foreign aid the US government should provide tax credits to American companies who invest in the countries who are current foreign aid recipients. Put another way these authors argue that building a factory in a country like Kenya via a US tax credit system for corporations is far better than a direct grant/forgivable loan that usually end up embezzled by corrupt local politicians and/or sent to the recipient country's military.

Now this is very fresh thinking on foreign aid -- MUCH more creative than Obama's "let's just spend more and hope for better results in these countries." Given the difficulty of implementing a tax credit system like the one the authors advocate let me offer my own version of foreign aid reform based on a model that has already been used by the US Congress.

Welfare Reform

Yes the US Congress via the leadership of former Speaker of the House Newt Gingrich boxed then President Bill Clinton into a corner forcing him to sign the welfare reform into law. Essentially Congress converted the perpetual welfare train formerly known as "Aid to Families with Dependent Children" (AFDC) into the TEMPORARY assistance program known as "Temporary Assistance to Needy Families" (TANF) which imposes a five year maximum benefit for welfare assistance per individual thus giving all of us to get our lives right and to help our fellow citizens when they need a little assistance.

So I call on the US Congress, United Nations, International Monetary Fund, World Bank, etc. to reform all of their current foreign aid programs into a completely new mindset/policy to be called -- "TANNS" -- Temporary Assistance to Needy Nation States. How long do you think a complete thug/dictator/sadist like President Robert Mugabe of Zimbabwe would remain in power if all foreign aid were to be cut off at a date certain? He is starving his people today despite the food aid we send to his government (the government officials call it "fasting" -- I kid you not!!) so cutting off foreign aid to his country would not add to the harm being done today.

Trade not aid,


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