Tuesday, March 31, 2009

The poison of foreign aid

What happens when an enlightened African challenges Westerners' long-time habit of giving foreign aid to African countries? In his homeland of Uganda, Andrew Mwenda is fast learning what happens when a government, steeped in corruption and incompetence and almost totally dependent on the largesse of Western donors, sets out to punish those who would interfere with the sources of its revenue stream.

In the Winter 2009 edition of The Insider, Mwenda expresses his belief that foreign aid distorts the incentives of both donors and recipients. He says:

When governments have to depend on their own citizens for revenue, they develop a vested interest in the prosperity of their citizens. When governments depend on foreign donors for revenue, they develop a vested interest in manipulating international donors for money.

And further,

The only way the people of Africa can hold their governments to account, can participate in the policymaking and the policy implementation processes in their own countries is for them to be the source of the revenues that sustain governments in power. But because our governments depend on donors for money to build roads, schools, and hospitals, they do not look at us as citizens.

Instead of being looked upon as citizens, Mwenda says that the Ugandan government, as well as other African governments, "look at us as clients who they can bribe with welfare handouts from international donors. But if our governments depended on us for that revenue, they’d look at us as citizens whom they are supposed to account to because they depend on us for the public expenditure of revenues."

In 2007, Mwenda began publication of a news magazine, The Independent, a vehicle to express the views of like-minded observers of the African scene. Calling for a "scaling down" of foreign aid to African governments, Mwenda believes that "When the governments run out of revenue and they do not innovate new ways of generating revenue domestically, they will fall."

And, he maintains, "The moment governments in Africa realize that the public expenditure needs cannot be sustained from abroad, they will immediately develop a vested interest in harnessing the domestic economy—the gross potential of the economy. But, in fact, the beginning point of reform in Africa is to scale down aid."

Mwenda has been held for interrogation by the Ugandan police on many occasions, and has been charged with more than 20 "crimes," including sedition and libel, for writing about the nepotism and corruption that is common to the government of Uganda President Yoweri Museveni. This is only part of the response of the government to the many heretical views expressed in Mwenda's magazine, which enjoyed a 30% circulation growth in its second year of publication. Mwenda reports,

We are facing serious challenges. Our challenges are not coming right now from the market, because we have been extremely successful in the market. The government, realizing we are successful in the market, has now brought political pressure to bear on us—has stopped printers from printing our newsmagazine. It has been lobbying advertisers to stop them from advertising with us.

Remember that in spite of privatization and liberalization, the government of Uganda remains the largest consumer and largest formal sector employer. For most businesses, their profit margin lies in the ability to get government contracts and government handouts. And the government says: 'OK, we will not give you a contract if you advertise with The Independent.' They are using political influence to distort the market.

And still another tactic used by government, claims Mwenda:

The second cost the government has imposed on us is by keeping us at police stations and in court; by doing this, they reduce the amount of time we can devote to strategies for our newsmagazine, editing it, generating stories. So this year is going to be a challenging year because a new threat has come and that is not just interference, but a direct attempt to undermine our existence as a business.

In spite of these attempts at repression, Mwenda remains optimistic. Rightly or naively, he believes that the Ugandan government is subject to world opinion. In 2008, he was granted a freedom award by the Committee to Protect Journalists, and says,

Remember that first of all the government of Uganda depends on Western aid for its own political survival here. And the Western governments would be embarrassed to be seen to be giving money to a government that is busy harassing independent newspapers. So in a way, when international actors like the Committee to Protect Journalists highlight our woes, there is incipient pressure on the government of Uganda to exercise restraint. So they’re very helpful in putting breaks on what the government of Uganda can do. Without them, the government of Uganda would have killed me. Last year they planned to kill me, but they feared the response of the international community. Then they planned to kidnap my fiancĂ©. They would have shut us down here as a newspaper, but they are afraid of the international reaction to such a reaction.

Visit Mwenda's blog here, and read his recent article: You want freedom? It is expensive

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