Check the Fine Print

20 Feb

A couple of weeks ago, the official American aid giant USAID announced that, at long last, it was going to allow non-US firms to bid on development contracts, potentially opening up its vast reserves of cash to companies actually based in the poor countries these are supposed to help.

This caught my attention, because in two books that explore and criticize the workings of the aid industry — or certainly aspects of it — USAID comes in for a fair share of the flack.

In Travesty in Haiti: a true account of Christian missions, orphanages, fraud, food aid and drug trafficking, anthropologist Tim Schwartz looked at the harmful effects of CARE’s food program in Haiti, part of which consisted of selling American (and Canadian)-grown grain and other foodstuffs on the open market.

Why was a charity engaging in commerce, and competing with poor farmers trying to sell their grains and produce? Well, instead of giving CARE, let’s say, a million dollars to spend on projects, USAID gave it something to sell instead and to earn those million dollars that way. Tim Schwartz — and many others — pointed out the immense harm created by the practice, but it took many years for the charitable organization to finally stop doing this. And according to CARE Haiti’s Yves-Laurent Regis, when it finally did, the resulting reduction in funds saw the firing of over 500 staff members.  (Some of their programs were offloaded to the UN’s World Food Program, and I can only guess from where it is getting its food, but I am assuming most, if not all, of it isn’t locally procured.)

Now I am reading Michael Maren’s The Road to Hell: the ravaging effects of foreign aid and international charity. In it, Maren looks at the play of circumstances unleashed by USAID’s supplying of US-grown food in Somalia in the 1980s. Here too, this influx of grains destabilized and gutted the local agricultural economy, sending peasant farmers into a deepening spiral of penury. How? Working as a food relief monitor, Maren writes, “After checking ledgers at refugee camps, I figured that most of the relief food being sent to the region –probably about two-thirds — was being stolen. Some disappeared from the docks in Mogadishu. Some disappeared from the trucks along the way to the camps. Sometimes entire trucks would leave the port and vanish forever. Most of it, it seemed, disappeared from the camps, sold by camp commanders, who were usually Somali military men, or were taken by … members of the Western Somalia Liberation Front. Along with the food, the WSLF also raided camps for able-bodied young men, unwilling conscripts for their murky guerilla war across the Ethiopian border in the Ogaden desert.”

For Maren, it was all part of complex political strategy on the part of Somalia’s dictator-president Siyaad Barre, to take over the piece of neighbouring Ethiopia inhabited by ethnic Somalis.

Even so, there was so much food being delivered to the camps that the refugees themselves — their numbers hugely inflated so that Siyaad Barre could access ever-larger amounts of it  — were selling the surplus. “We were getting too much food, so we would take it and sell it to buy soap and cloth and kerosene, a refugee named Aden Farah told Maren. “Several refugees opened shops …  and started selling the food. It was cheap, so the people were buying it. And it was cheaper than in Mogadishu, so merchants from the city came to buy the food.”

So the idea that USAID might buy food locally would be a welcome change, right? But unfortunately, the new policy rules are not quite as revolutionary as one might think and, according to the Guardian, “do not extend to US-funded food aid. Under federal law, the vast majority of American food aid must be bought from US suppliers and transported on US ships.” (This also makes the aid fair more expensive for the U.S. tax-payer.)

What’s more, as if such potential good news were being completely disemboweled in the regulatory fine print, food isn’t the only exemption. Motor vehicles and pharmaceuticals must also be purchased from American firms.

In other words, one of the biggest problems caused — as opposed to solutions offered — by USAID remains unchanged and as wrongheaded as ever.

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One Response to “Check the Fine Print”

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  1. “This is the new Parliament Building?” « Global Kiosk - June 30, 2012

    […] USAID amended its regulations (see this recent post) to allow greater freedom in tendering projects to firms actually located in the countries its […]

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