Some sobering words from David Osterfeld, Associate Professor of Political Science at St. Joseph's College in Rensselaer, Indiana.

>>The total net transfer of capital, private and public, from the West to the Third World between 1950 and 1985 amounted to the staggering sum of over $2 trillion in 1985 prices. Private investment accounted for about 25 percent of this total, but its share has fallen from about 40 percent in the 1950s to only about 16 percent in the 1980s. The $2 trillion . . . was enough to purchase not only all the companies on the New York Stock Exchange but, in addition, the entire American farm system. What has this massive transfer accomplished?"

"In practically every case, the influx of "aid" has been immediately followed by the emergence of a massive, unproductive, parasitic government bureaucracy whose very existence undercuts the recipients' ability for sustained economic growth.

Conversely, the most economically developed parts of the world—Western Europe, the United States, and Japan—developed without aid. Similarly, Hong Kong and Singapore, two of the most economically vibrant areas over the past two decades, received only negligible "aid."

Finally, Taiwan and South Korea are often touted as "foreign aid" success stories. However, their impressive economic performances began only after large-scale economic aid from the U.S. was discontinued.<<

Our $2 trillion has to some extent funded groups who now threaten our security. How much should we give to Hamas?

Surely sixty years of experience has demonstrated that aid does not work. Unless third world countries take steps to limit their population increase, any attempt at aid is just urinating into the breeze, and mainly carried out to give a warm inner glow to the protagonists (not those paying, who are usually taxpayers).

The whole idea of aid is supposed be that you share what you have in surplus with those who do not have enough. Does Australia have a surplus of foreign exchange? At the moment we are running the biggest balance of payments deficit in our history of around $50 billion per annum. By what moral imperative should we be required to borrow more money from Japan or China to give it to the third world? I consider that national interest must be the only criterion for aid, and I am comforted to see our aid used to underpin the pacific solution to the problem of illegal immigrants, as well as keeping the failed states around us from boiling over. Aid to anywhere else is just pandering to our egos.

Sage: Well put.

plerdsus: I agree almost entirely. The only concern I have is one mentioned in the article: that police and security action is as much a band-aid solution as what you point out.

I don't think foreign aid should be going to the "national interest" via corporate consultants. It won't help anyone in the long run.

I do think we need to promote our broad national interests. The reality is that there is a culture war occurring, and China, militant Islam, or even some of our western allies such as the U.S., will all promote their interests regardless of us. I have problems at times with what some of those interests may be, but that's another matter.

We need to make our aid conditional (and finite). I think we need to make it conditional on clear moves towards open and accountable government and business structures in the western, liberal tradition, rather than either 1) allowing our money to actually further the opposite, or 2) allowing corrupt or dodgy governments to get away with not addressing their own social problems justly because of our aid.

We need to place a very strong emphasis on the separation of church and state, especially on women's rights and education (because it is clear around the world that as these improve, a whole lot of problems decrease, including rampant population growth); and on environmental sustainability, because that means economic and political stability, which is good for everyone, including the anti-immigration crowd.

I like the idea of providing scholarships for future leaders of developing nations at our universities as hopefully, this should translate into an adoption of liberal values in their societies later on. Co-inciding with this, we need to promote similar values at the lower socio-economic level as part of our "development" programmes.

People may see this as some form of cultural imperialism, and it is. However, we don't have time to sit back and hope for these values to grow organically while we throw money to corrupt regimes and political extremists promote their own culture in our absence.

Yes it should, the third owrld has a short memory and would shoot us in the back the first time a breakdown emerges.

Why waste the money, we can be bleeding hearts but i would rather my tax money (if not going to the national interest) going to local interests who need it, eg health, instead of often irresponsible third world governemnts.

Lets look after ourselves first, and treat others how they would treat us always

How often does foreign aid translate into bullets and guns. I agree with scholarships, training third worlders into medical people and then SENDING them back to practise the skills they have learned for the benefit of their own people.
Teaching birth control,respect for others rights including women's rights, hygiene,organic growing and fish farming.

I disagree with the thrust of the article.

When I give to charity it is generally for foreigners as generally their plight is far more serious than the the plight faced by Australians. We should certainly encourage people to make private acts of giving focused on elliminating extreme poverty throughout the world.

However to argue that governments should spend tax payers dollars on anything other than the "national interest" is to argue that the basis of taxation is to serve the interests of somebody other than Australians

Sage, I wouldn't get too carried away quoting David Osterfeld, he sees Adam Smith's invisible hand everywhere. Check out his article on slumlords, http://www.libertyhaven.com/theoreticalorphilosophicalissues/austrianeconomics/govmarket.shtml , it is classic Smith all the way (ie the slumlord despite being a greedy capitalist pig is serving the interests of the poor while lining his pocket).

Much aid delivered since the early 1980s has been contingent on macroeconomic reform in donor recipient economies. In general terms this meant slashing spending on health, education etc. while making their economies more efficient. Then, it was set sail for free-market heaven. The result, as all can see, has been a more-or-less complete debacle. That doesn't stop free-marketeer academics like Osterfield arguing for more of the same medicine.

Does Australia have an obligation to provide overseas aid? As the largest economy in our region, with the richest population, it would seem to be in our interest to spread a bit of economic goodwill. For those arguing against aid, I certainly hope you're also opposed to business welfare.

JJ, I have no doubt that Osterfeld's politics make him a player for Team Right. He is a product of that machine that churns out Left and Right players in equal numbers. The mob from the Left can only hold out Cuba and North Korea as exemplars of the 'each according to his abilities, to each according to his needs'.

It's Osterfeld's maths that sound a tocsin. Institutionalised aid only creates lazy and corrupt regimes.

And I'm certainly against corporate welfare.

Sage, I'd be interested to see some analysis of long-term cash flows between the first and third worlds. I have seen it suggested that debt repayments and profit flows from resource exploitation in the third world more than equal any aid funding. This suggests to me that in fact the first world is probably pulling more out of the third world than they're putting in. This is exacerbated by powerful elements in the third world ripping off much of what is left, and sending it overseas. Thus the poor get poorer, while the rich get richer. The first world has not impoverished itself through giving aid, as it has more than got the money back.

I don't know whether aid is part of the answer, but I feel it could be. I am suspicious of Osterfield and his ideological baggage. We have had the best part of 30 years of monetarist-guided aid, with dismal results. Adam Smith's invisible hand has been nowhere to be seen. I don't see that cutting off aid is a recipe for helping the third world, however I could be wrong.

The current Indonesian situation shows how aid and help can be dangerous. We've helped that country a great deal, yet they are becoming more and more belligerent towards us. Aid should only be in the form of technicality and application, not of providing money. Of course in the case of major disasters aid is essential to help recovery.

Africa receives huge amounts of aid, yet its a total basket case. Supporting people rather than educating them is always fraught with danger for all concerned. Economic aspects only cloud things more. Poverty above subsistence is also an economic viewpoint, being able to provide for an ever increasing world population without end is ridiculous in the extreme. There'll always be people that live in huts and nature, we should be providing them with the knowledge to enable them to live their lives in better health according to their lifestyle. Not giving them food that is designed for cities and a different way of life.

A change to how we view help, is the first step. Just throwing money and resources at ever deepening economic holes, shows our methods of aiding others, are flawed

JJ, I'd be interested in long-term cash flows too. I'd also want to know why a once insignificant nation, devasted by war, has been able to build its powerful position in the world by copying and then perfecting various products like cars and watches to name just two yet other mendicant nations don't wish to replicate such a story and are happy to cling to a cargo-cult mentality.

To our north we have members of a camorra more concerned about driving the current model Mercedes Benz than with governing their people. The Mercedes Benz vehicles and other goodies are provided by the Australian taxpayer.

Sage, do you mean Japan when you talk about a "once insignificant nation, devasted by war, has been able to build its powerful position in the world by copying and then perfecting various products like cars and watches"? If so, of course Japan was one of the world's leading industrial powers by the 1930s and post-war was reconstructed, rather than built from scratch. Additionally the allies (lead by the US) lead a process of reform including disarmament, liberalisation, democratisation, unionisation, education reform and purging of wartime leaders. Thus a feudal autocracy was transformed into a modern democracy. The aid money helped the process, as did the economic boost provided by up to 350,000 occupying troops.

The nation to our north, are we talking about PNG? I don't know where to begin there. Corruption is obviously the main issue, but so entrenched as to seem insoluble. No amount of aid money will help if it is simply siphoned off by the powerful.

On a positive note, Transparency International notes that Indonesia is heading in the right direction "Indonesians being the most optimistic [in the world] (63% expecting corruption to decrease a lot) ". http://www.transparency.org/policy_research/surveys_indices/gcb

Over in Sweden, they’ve been investigating the Grand Mosque of Stockholm. Apparently, it’s the one-stop shop for all your jihad needs: you can buy audio cassettes at the mosque encouraging you to become a martyr and sally forth to kill “the brothers of pigs and apes” — i.e. Jews. So somebody filed a racial-incitement complaint and the coppers started looking into it, and then Sweden’s chancellor of justice, Goran Lambertz, stepped in. And Mr. Lambertz decided to close down the investigation on the grounds that, even though the porcine-sibling stuff is “highly degrading,” this kind of chit-chat “should be judged differently — and therefore be regarded as permissible — because they were used by one side in an ongoing and far-reaching conflict where calls to arms and insults are part of the everyday climate in the rhetoric that surrounds this conflict.”

In other words, if you threaten to kill people often enough, it will be seen as part of your vibrant cultural tradition — and, by definition, we’re all cool with that. Celebrate diversity, etc. Our tolerant multicultural society is so tolerant and multicultural we’ll tolerate your intolerant uniculturalism. Your antipathy to diversity is just another form of diversity for us to celebrate.

Diversity-wise, Europe is a very curious place — and I mean that even by Canadian standards. In her latest book, The Force of Reason, the fearless Oriana Fallaci, Italy’s most-read and most-sued journalist, recounts some of her recent legal difficulties with the Continental diversity coercers. The Federal Office of Justice in Berne asked the Italian government to extradite her over her last book, The Rage and The Pride, so she could be charged under Article 261b of the Swiss Criminal Code. As she points out, Article 261b was promulgated in order to permit Muslims “to win any ideological or private lawsuit by invoking religious racism and racial discrimination. ‘He-didn’t-chase-me-because-I’m-a-thief-but-because-I’m-a-Muslim.’ ” She’s also been sued in France, where suits against writers are routine now. She has had cases brought against her in her native Italy and, because of the European Arrest Warrant, which includes charges of “xenophobia” as grounds for extradition from one EU nation to another, most of the Continent is now unsafe for her to set foot in. What’s impressive is the range of organized opposition: the Islamic Centre of Berne, the Somali Association of Geneva, the SOS Racism of Lausanne, and a group of Muslim immigrants in Neuchatel, just to name a random sampling of her Swiss plaintiffs. After the London bombings and the French riots, the commentariat lined up to regret that European Muslims are insufficiently “assimilated.” But, in fact, at least in their mastery of legalisms and victimology, they’re superbly assimilated. One might say the same of the imam who took my chums at The Western Standard to the Alberta Human Rights Commission over their publication of the Danish cartoons.

Johnj: I'm opposed to corporate welfare, rural welfare, etc.

I'd also like to point out that whilst there may (or may not be) problems with a free market system if it were to occur, we don't actually have a free market system anywhere in the world, so we can't actually say. What opponents of this economic theory conveniently miss is that a free market entails no government interference. The U.S., which is often touted as the evil villain of the free market, is in fact anything but run on free market principles.

I'm certainly against imposing our values direcly through war, etc., (and I'm also against indirect government involvement through foreign aid), but I really think in some places we're flushing money down the toilet. I think a massive, massive part of the problem is the cultures of the places involved. To provide some neo-Weberian analysis, I really don't think it's a coincidence that regions that are hamstrung by collective world views that are at best from the Dark Ages are completely backward, especially when often, the first (and only) port of call in the realm of education is to memorise a religious text. Until some regions see the equivalent historical periods to the west's Renaissance, Reformation and Age of Enlightenment, then we're going to continue to see many parts of the world lag drastically behind.

Giving aid to developing nations like in Africa is just fair because Europeans/whites have basically robbed the continent dry by extracting its manpower (slavery) and its natural resources during colonialism. How many whites have grown rich out of exploiting Africans mercilessly at past and present? It is just fair that whites give some of their wealth back to Africans.

Just remember, when you start using aid as weapon to bully, intimidate, and violate the sovereignity of aid receipients, naturally all "goodwill" you hoped to gain will evaporate immediately. This case is especially guaranteed when the "aid-receipient" do not need this "aid" as the country absolutely does not depend on aid from anybody.

That is why any goodwill towards Australia for its tsunami aid in Indonesia have evaporated once Australians start threatening to "cut aid" if Aussie drug-smuggler Schapelle Corby was not given impunity from Indonesian law.

...*continued*...

Because:
1) Indonesia does not need Australian aid as we don't depend on any aid money. Australians MUST know this fact.
2) No country will ever surrender its basic national sovereignity for pledges of aid that might not materialise.

Indon old buddy,
I reckon its no good referring to groups on the basis of skin colour. If you use the term "whites" you must also be prepared to be referred to as either coloured, black or yellow. This would be a retrograde step me thinks, but perhaps I'm oversensitive about being white.
Some white people found wealth in Africa, sure, there was a whole slavery industry at some distant time, but anyone with fair skin is not necessarily responsible for past injustices. Some of us have never even been to Africa, much less shared the pillaged wealth or had a bantu washing the car in the driveway.
How do you feel about Mugabe's way of restoring things in Zimbabwe? When do you think Ethiopia will be self reliant...or if...
Are any of these Pacific nations recieving Australian aid actually doind anything to better their situation, or does the headman tend to drive a flash car? Maybe some are, the tendency is to build such a windfall into the budget and become ever more reliant, Which is the real issue.
Schapelle gets 20 years for a bit of puff, The same amount of time got by drug smugglers trying to import serious quantities of heroin into Australia. Apples and oranges? I'll wear that.
Indonesia not being dependant on Australian aid is perhaps just one more valid reason that a person who is proud to be of Indonesian extraction could use on their application to reside in Indonesian territory. Of course there would be difficulties if you were proud to be Wesr Papuan or Acenese or disagreed with the current dictator in any way, shape or form.

Shorbe, I agree that the US is not run on free market principles, a quick check of the US/Australia <joke>free trade</joke> agreement would dispell any lingering doubts. But arguing that there is no real free market economy in the world to test free market theory is a bit like saying that Pol Pot didn't implement "real Maoism" and therefore Maoism could work. The fact is that through the IMF we have had decades of what is laughingly called structural adjustment in the Third World, which effectively implemented a monetarist agenda. I think that the calamity that has ensued should surely be bad enough to disprove monetarism permanently, you might look here http://wwwnew.towson.edu/polsci/ppp/sp97/imf/POLSAP1.HTM if you're interested. An overview on conditionality from the IMF itself is here http://www.imf.org/external/np/exr/facts/conditio.htm but those without a strong stomach for managerialist jargon should proceed with caution.

Despite all the government rhetoric about choices, we are actually headed in the opposite direction, with more and more regulation. The Comm Govt's IR Work [No] Choices is a classic example; ie the choices are the government's choices, not yours.

PTBI, I find myself in the odd position of agreeing with you (somewhat). Europe and the USA, as the beneficiaries of the slave trade and colonial oppression, are obligated to Africa. Don't forget however that the Arabs founded the trans-Saharan slave trade in the 10th Century, so they can't evade their obligations either. I don't believe Australia was involved in Africa, it is simply specious to point to our white skins. Would you argue that Indonesia is complicit in the African slave trade because you are a majority Islamic country? No, I didn't think so either.

Why do you keep mentioning Schappelle Corby? You're not in love are you?

Australia was involved in blackbirding (ie slave trade from the Pacific islands) and was the last colonial power in Papua, so that would seem to dictate where we need to provide some aid funding.

Johnj: I'm not arguing for quasi-government intervention either, which is what the IMF is. Is anyone under the illusion that the IMF is actually anything but an extension of certain governments and business groups? I'm for a devolution of power, not a concentration or centralisation of it, but that requires vigilance on the part of people. The incredible inhumanity (political, military and economic) of the twentieth century can quite easily be explained by the centralisation of power.

I also refuse to buy into the whole line that Africa is the mess it is because of colonialism. Yes, colonialism was quite ugly, yet Africa has had, on average, forty years to get its act together (which Asia has and is). Yet in that time, it's been hamstrung by backwards world views/religions, corrupt governments, periodic wars, over population in regions of marginal land use, and so on. There has to come a time when people look at some regions of the world and wonder if their cultures are just messed up at a deep level. Russia is another such region -- that country loves strife, and always has. Much of the Balkans too.

@Johnj:

Australia, a neo-European colony, are developed by British capital. British capital were mostly derived from colonial exploitation of extractive colonies in Africa or in Caribbean (using African slaves). British capital was also derived from its trade monopoly, especially the highly profitable trans-Atlantic slave trade from 16th-19th century. Remember, most slaves in the Americas were transported by British ships.

So, Australia as a neo-British country, owes its prosperity from infusion of British capital originating from the merciless exploitation of non-white people, particularly Africans.

Shorbe, I agree wholeheartedly with your desire for devolution of power, but it is not happening. Systems of surveilance and control become ever more pervasive and government ever more insistent on using them for "our own good". This is a depressing worldwide trend. Vigilant? I'm vigilantly watching life choices being eroded in the name of freedom and choice.

I'm not suggesting that all Africa's woes are caused by colonialism, but some are. The legacy of inappropriately drawn borders is just one of the issues facing Africa. I agree that the IMF is another imperialist force, but just look at their agenda, which includes: cutting social expenditures, implementing user fees in basic services such as education and health, focusing economic output on direct export and resource extraction, devaluation of overvalued currencies, trade liberalization, removing import and export restrictions, increasing the stability of investment (by the opening of domestic stock markets) etc etc

PTBI, your economic argument is marginally better than the skin-colour one, but shows a poor grasp of both African and Australian history. Britain's only African colony until the 1870s was the Cape of Good Hope. After that they grabbed Egypt, Sudan, South Africa, Tanganyika etc. By this time Australia was already heading towards Federation and the money flowed from Australia to the UK, not the other way around. The point of colonies is to create goods and provide markets. Capital is needed to begin the process, but the profits always end up back with the colonial power. A look at the magnificent imperial architecture of London (or Madrid or Lisbon or New York) shows what it is all about.

@Johnj:

It seems you are deliberately closing your eyes to historical truth. British exploitation of Africa did not begin in post-1878 (Berlin Conference) Scramble for Africa, but it started much earlier in 16th century with British domination in trans-Atlantic slave trade and her highly profitable sugarcane plantations in West Indies which depended on African slave-labour. It is clear much British capital that were used to develop Australia came from exploitation of Africans.

And you are wrong, Australia was not colonised to be exploited, but as a place to dump excess British prison population, and after 1850s, excess overall population. Australia is not an extractive colony meant to create profit, but a neo-European colony meant to relieve British overpopulation. This is because Australia has temperate climate somewhat similar to England suitable for white habitation, while most extractive colonies are located in tropical areas where whites died like flies to various diseases.

British capital derived from exploting non-whites, and most of revenues from exploiting Australian resources, was used to establish British-style institutions and modern infrastructure in Australia that is still used today and is responsible for prosperity of Australian whites. Hence, you cannot escape your debt to Africans, the most heavily-exploited colonised people in the world.

Johnj: You seem familiar with the situation, but I suspect you're being wound up and/or hitting your head on a brick wall. Based on other threads, I'm surprised you haven't been flamed yet.

Anyhow, as to our debate...

I'm upset that both the left and the right want to stick it to our freedoms in this country -- everyone wants to control some aspect of our lives. It troubles me that growing up at the end of the Cold War was actually a more moderate, less paranoid and more free (in a whole lot of senses) time in Australian history. I don't think history will judge the present well at all.

Africa is not the only region plagued by inappropriately drawn borders. I mean, why is it that the former Yugoslavia collapsed violently, yet most of the rest of eastern Europe didn't? Certainly part of what's Poland was only historically German, and part of what's Belarus or the Ukraine should be Polish. The Baltic countries have large Russian minorities, yet haven't torn themselves apart. Czechoslovakia managed to split peacefully. Part of what's Hungary should be Slovakia (one of the three mountain ranges that represent the core of the Slovak geographic identity, all of which are on the Slovak flag, is now in Hungary), and there's a large Hungarian minority in Slovakia. I don't think it's enough to say African borders are wrong.

The biggest problem with the sort of free trade reforms pushed by the IMF and many western nations is that they're so hypocritical, but that's not a problem with free trade as such. I think the term has been misappropriated. If there were a breaking down of barriers and subsidies in the west so that third world nations could actually compete (rather than be bullied and shut out), then things would be radically different. Also, if the west wants money to flow out of the third world, it also has to expect that it's only right for people to be allowed to follow that money too if they want.

Of course, I'm talking about a lot of hypotheticals.

Shorbe, can't argue with any of that. Re Yugoslavia, I think that the disaster there had a lot to do with the repression under Tito. With the lifting of centralised control the incompatible parts sprang apart, a little like what is currently happening in Iraq. I worked with a Bosnian Serb, a journalist, who had narrowly escaped death (had his throat cut but survived). Albeit that his English was limited, he couldn't explain what had happened in the Balkans, just shook his head and said "for me Bosnia is finish, I'm Australian now".

I don't argue that all Africa's problems are colonial borders, nor can all blame be laid at the feet of colonial powers or the IMF. Free trade certainly might help, but unfortunately multilateral agreement recedes ever further into the future. The whole notion of globalism rings rather hollow when capital is free to travel about, but goods and people are caught in an intricate web of restrictions.

In response to Proud to be Indonesian (PTBI):
Most discussions which involve slavery & colonialism can be summarized as ‘Westerners bad – others good’ The reality is rather different, African slavery was not confined to western societies. Black African societies also enslaved & massacred other Africans, on a major scale. The Arabs & Turks also made much use of African slaves. Arab slave trading began in the 7th Century (long before western slavery) and ended around 1911 (more than a century after western slave trading was abolished ) it accounted for an estimated 14 million Africans.

I suspect the reason why activists like to portray slavery as an exclusively a western crime is because they perceive that they are more likely to successfully run the ‘you owe us’ scam on western liberal democracies.

If the rationale for giving aid was to recompense for our past crimes( as PTBI implies) I would have thought that all the trillions of dollars we have since pumped into Africa in infrastructure ,machinery ,food etc would have more than paid off our crime by now ( we must be serving one of those “never to be released sentences” )

The poverty in Africa has little to do with slavery or colonialism and more to do with mis-management (which encompasses over-spending/mis-spending , overpopulation. & inappropriate values).

Many of these countries had great success in doubling, tripling & even quadrupling their populations since independence, but have not given the same commitment to supporting themselves.

If nations want to stay “proud” & “sovereign” they need to take responsibility & they need to take initiatives, and they can start by ditching archaic values which tell them they can ‘go forth & multiply” and the rest of the world will pick-up the bill.

Incidentally PTBI, (following-on from your line of reasoning re Australia)since the Arabs on the back of the slave trade, prospered & spread their values far & wide
, and Indonesia inherited much of its religious & cultural foundations (either directly or indirectly ) from the Arabs, would not Indonesia owe a “debt to Africans” as well?