Policy Wise

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Previously, we have argued that foreign aid is not the best way tackle poverty in the developing world. A story in the The New York Times illustrates wh

But the law in the United States requires that virtually all its donated food be grown in America and shipped at great expense across oceans, mostly on vessels that fly American flags and employ American crews — a process that typically takes four to six months.

For a third year, the Bush administration, which has pushed to make foreign aid more efficient, is trying to change the law to allow the United States to use up to a quarter of the budget of its main food aid program to buy food in developing countries during emergencies. The proposal has run into stiff opposition from a potent alliance of agribusiness, shipping and charitable groups with deep financial stakes in the current food aid system.[link]

While Africa starves, a coalition of business interests and farmer groups is thwarting the efforts of the Bush administration to free food aid from such external concerns. Not only is this causing food scarcity in Africa, but is highly inefficient.

This is hardly an isolated case: calculations show that almost 75-80% of British ”aid” is eventually channeled back into the country. Also, aid treats all countries equally and provides no incentives for them to pursue structural reforms.

It would simpler to increase market access to the African farmer. This would revitalize the African economy and benefit the American consumers. The money which the American government saves can be better utilized in other social programs.

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