Additional information: An Analogy or excactly the same: Bangladesh and Africa

aid kills (an extract from a spiegel interview)

Here's something that should surprise absolutely no one paying attention:
"For God's Sake, Please Stop the Aid!"

SPIEGEL: Mr. Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa...

Shikwati: ... for God's sake, please just stop.

SPIEGEL: Stop? The industrialized nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.

SPIEGEL: Do you have an explanation for this paradox?

Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.
Thanks to James Waddell on blog.mises for this pointer.

I'll say here what Shikwati won't say quite as bluntly:

Foreign Aid is always presented as helping the people of a nation, but it never does. Even the IMF has had to concede this.

The money goes (1) to the governments that rule over the people of a nation -- often brutally -- in return for redirecting the money (2) to Western political capitalists in the form of large capital purchases.

That's right: Foreign Aid is colonialism abroad and corporate welfare at home. It strengthens the worst political players in Africa and the worst political players back here.

Well-intentioned people need to take more responsibility for consequences!

I also find Live 8 to be repulsive and ironic from an ethical perspective. It is a very disturbing development. Twenty years ago, I was in a London hotel room watching Live Aid. Back then, Bob Geldof and company were asking for private donations (which may have been damaging, but at least they were voluntary), but Live 8 specifically says on their website that they don't want my money! What they want is my support in petitioning governments to tax and spend more. They don't want my voluntary support in any traditional sense. What they want is for me to help them get involuntary support. If that isn't the perverse-but-logical consequence of the democratic ethos, I don't know what is.

Finally, there is the economic absurdity at the foundation of this whole thing. Forget politics, forget ethics for a moment. What is the basic claim?

To quote Geldof, "This is without doubt a moment in history where ordinary people can grasp the chance to achieve something truly monumental and demand from the 8 world leaders at G8 an end to poverty."

Anyone who thinks more money can somehow end poverty doesn't know the first thing about either money or poverty. Perhaps if Geldof took some time off to study the nature of wealth-creation and value, he would do far less damage to people who are already suffering.