Weekly Worker 581 Thursday June 16 2005

Aid, debt and fair trade

The three demands of Make Poverty History (parroted by Gordon Brown) do not even come close to challenging the structures that keep Africa - and much of the rest of the world - in poverty. Without thoroughgoing democracy and working class self-empowerment the demands of MPH can only reinforce the illusion that capitalism can bring about the end of poverty through the vague but seemingly radical notions of ‘justice’ and ‘equality’. Yet the fact of the matter is that trade and aid under capitalism can only mean exacerbating uneven development and supplying the elite with even more opportunities to stash away unearned fortunes

Can there be ‘trade justice’?

Make Poverty History, Gordon Brown and global corporations all agree that what Africa needs is more capitalism. MPH wants to see this introduced through the “rewriting of trade rules to the benefit of the poor countries”. Apparently this would establish a level playing field, where today’s poor countries could “catch up” and in the future compete ‘properly’.

In truth, there is not too little capitalism in Africa - the whole continent is very much coloured by capitalist colonialism and imperialist exploitation. Capitalist development relies on the huge unevenness we see today. The fact that there is concentration of massive wealth right next to overburdening poverty is not a ‘mistake’ - it is part and parcel of the way capitalism works.

This inequality begins, of course, with the lack of ‘trade justice’ between the worker and the employer. Capitalists needs to extract more from their workers than what they give in exchange for labour-power (“unpaid labour”). On a bigger scale, this basic mechanism leads to extremely uneven distribution of wealth within countries and the world as a whole. A phenomenon greatly exacerbated by the development of the imperialist stage of capitalism. Capitalism has to expand constantly and revolutionise its means of production - if a company does not do so, sooner or later it will go down. It is simply impossible to establish a ‘level playing field’ under capitalism.

Much of the ‘trade justice’ that is being proposed is based on the propping up of small peasant production. For example, Fair Trade (the umbrella organisation that certifies and labels over 700 ‘fairly produced’ items sold in Britain) specifically supports “small producers; those that are not structurally dependent on permanent hired labour, managing their farm mainly with their own and their family’s labour-force … Of every Fair Trade-certified product sold by the organisation, more than 50% of the volume must be produced by small producers” (www.fairtrade.net).

Small-scale farming is not only highly inefficient - it also means extreme self-exploitation for farmers and their family. Supporting this kind of production has more to do with a futile harkening back to the pre-capitalist past - it does not actually understand capitalism and it certainly is not looking forward to a future where production is organised in a rational and p lanned manner (a theme touched upon by Karl Marx in his The poverty of philosophy).

The G8 and Gordon Brown naturally have no such illusions. Their plans are more rational, though not more human - they simply want to make Africa safe for capitalism. That does not mean democracy, and it certainly does not mean an end to poverty: they simply want to see the ‘rule of law’ established to protect capitalist investment.

Drop the debt - and then?

Clearly, the G8 debt package is not a selfless ‘gift’ - it comes at a heavy price: cutbacks in social provisions, almost total control over spending and large-scale privatisation. In fact debt cancellation will further increase dependency and help strengthen neo-colonialism.

Crucially, because the debt cancellation comes from above, it will not touch the power relations - either in those countries or on a global level. Corrupt elites will continue to squeeze as much out as they can. Privatisation will only give them greater opportunity for embezzlement and self-enrichment.

If G8 governments agreed tomorrow to cancel all the debts of the developing world, it would not be long until new debts were accumulated. What we should fight for is the repudiation of debts from below - that is what the Bolsheviks achieved in October 1917.

Whose aid is it?

Gordon Brown wants to see a “doubling of aid”, Socialist Worker demands it should be “trebled” and Make Poverty History wants “the rich countries” to stick with their promise to “provide 0.7% of their national income in aid” (they must now “make good on their commitment” by setting a “binding timetable” to reach this target).

In 2003, the USA’s total aid budget was $33 billion, of which the biggest single recipients were Israel and Egypt: $3.7 billion went to Israel, including just over $3 billion in non-repayable “military assistance grants”. In Egypt, $1.2 billion of the $1.8 billion total was made up of direct military aid - and that is just according to the official figures (www.usaid.gov).

Would it be a good idea to double or treble that? Should Ariel Sharon really be provided with even more money to conduct his ethnic cleansing of the Palestinian population? What about Hosni Mubarak’s well-documented campaign against the workers’ and democratic movement in Egypt? These are two examples, but they are the rule in the ‘developing’ world, not the exception.

Western aid does not, of course, go to militant trade unions, democratic organisations or those who are rebelling against the conditions they live in. Just like charity in Britain, it is the ‘deserving’ poor who might get some of the crumbs from the imperialist table - not those who want to abolish the root of the inequality.

So, quite obviously, the key is: where is the money going to and who controls it? Simply calling for ‘more aid’ is in most cases counterproductive. The new World Bank president, Paul Wolfowitz, has helped to broker the debt deal - and has indicated that more, not less, control from western governments is on the cards: “It is not money by itself that is going to solve Africa’s problems, but if people are ready to solve the problems they are going to need assistance” (The Guardian June 14).

John Pilger gives a chilling description of what such control (or “assistance”) looks like: “Roughly half of all aid to Cambodia is spent on ‘technical assistance’, or TA. Between 1999 and 2003, this amounted to $1.2 billion. What is TA? It is an invasion of ‘international advisors’ on whom up to $70 million was spent in 2003 alone. Add to them ‘international consultants’, who each cost more than $159,000. By contrast, the cost of a genuine foreign aid worker in a truly independent NGO is less than $45,000, and the cost of recruiting a Cambodian expert is an eighth of this” (www.dissidentvoice.org, May 26).

Much of the aid from Britain, for example, is channelled through British companies. Millions of pounds of development aid money are paid to privatisation consultants like KPMG, PricewaterhouseCoopers and the Adam Smith Institute, who are engaged to ‘advise’ recipient governments on how best to privatise their water or gas provisions.

Aid must be opened up to scrutiny and control from below - here and in the receiver countries. No more aid for military expenses. No more aid that goes into the pockets of the rich elite. Aid to be paid directly to women’s, workers’ and peasant organisations, who can decide for themselves how the money should be spent.

Fighting for such a programme of democratic control and self-empowerment is the only way we can ‘make poverty history’.

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