UK government to cut aid

The UK Parliament voted on Tuesday to cut Overseas Aid from 0.7% of GDP to 0.5% of GDP, a cut which The Guardian refers to as a ‘hammer blow’ for some of the world’s poorest peoples facing persecution in countries such as Yemen and Syria.

This is an important update for any student studying the Global Development Module as part of A-level sociology.

Previous to the cuts the UK had the second highest aid budge relative to its GDP compared to any other country besides Germany and was among one of very few large developed countries to have met this Millennium Development Goal target. (NB that’s not a typo, the 0.7 of GPD target was set as part of the MDGs 1.0 back in the year 2000, even though they ended in 2015 to be replaced by the Sustainable Development Goals, still only a few countries met that pledge even in all those years).

Now we’re back in mid-league obscurity for aid donors by proportion of GDP.

The stated reason for the cuts to foreign aid are that the UK has spent over $400 billion on combatting Coronavirus and that next year our debt will exceed the total value of our economic output.

Boris Johnson says the cut from 0.7% to 0.5% is temporary and will return to 0.7% when economic circumstances allow

Arguments against cutting aid

It’s worth noting that every living prime minister besides Boris Johnson is against cutting aid

There’s been quite an active response outlining the impact of the cuts from various activists such as this tweet from Malala Yousafzai:

Some further arguments against cutting aid include…

  1. UK is already spending LESS on UK aid anyway, it’s down from $14 to to $10 Billion this year compared to the previous year already, because our GNP has already shrunk due to the pandemic. Thus the link between the economy doing worse and aid spending being cut is ALREADY in place!
  2. It’s a relatively small amount money that will do very little to help the UK get back on its feet, whereas the difference this money might make abroad is huge.
  3. Related to point 2, this could well be false economy – that money could prevent further strain on the UK economy, OR help the UK economy, especially since UK aid is now organised through the FCO rather than DFID, and the former is more cynical in the way it spends UK aid money anyway – more likely to use it to benefit the UK economy.
  4. Contrary to the news reporting about Philanthropists ‘stepping in’ to plug the UK aid cuts, this isn’t true – the aid cut is worth around $3 Billion the ‘pledge’ is currently at around $100 Million – 30 times less. This is a good example of media bias, the mainstream media REALLY should be more critical of these global elites!

Fair Trade and Development

Fair Trade is where companies and consumers pay more than the free-market rate for products to ensure that workers receive a decent wage for their products.

Typically this involves consumers in developed countries paying a higher price for agricultural products such as coffee, chocolate and bananas to the workers in developing countries.

The Fair Trade Foundation monitors the production of Fair Trade products, and to qualify for the Fair Trade label workers need to work for a company which ensures several conditions are met including:

  • Workers have decent (safe) working conditions.
  • Workers have the right to join a union and have a say in the process of production.
  • Workers receive a wage that is sufficient to give them a decent quality of life in their country – this usually means enough to pay for the basics and some left over to pay for education for their children, for example.
  • Production is sustainable and not harming the environment

The idea behind Fair Trade is that when workers have decent working conditions and receive enough money to ‘improve’ their lives, this means that trade can work effectively for development.

Fair Trade is very much in line with the principles of People Centred Development.

The Benefits of Fair Trade

The Fair Trade foundation says that 1.6 million farmers across the world are currently benefitting from Fair Trade and there are many, many examples of how Fair Trade is benefitting grass roots farmers in many developing countries.

Fair Trade Coffee…

Coffee is by far the largest Fair Trade export – the video below looks at an example of what I like to think of as ‘extreme Fair Trade’:

It outlines how Fair Trade Coffee importers in Europe work directly with coffee producers in Rwanda, focusing on empowering women into management positions especially.

And they export the coffee on a sailboat, meaning this is zero emission coffee, using a company called Timbercoast.

Fair Trade Cocoa and Chocolate…

Ivory Coast is the world’s largest cocoa exporter, most of it not Fair Trade, but the video below looks at how Fair Trade cocoa works in the country…

Fair Trade Cotton….

The video below outlines the story of Fair Trade Cotton

How Fair Trade can promote development

The main idea behind fair trade is that workers get paid enough to promote social development. The extra money they receive can be used to send their children to school, for example.

Fair Trade does not allow child labour, meaning children should be free to go to school and get an education.

Women and men are treated equally in fair trade projects, so working with fair trade can empower women and tackle traditions of gender inequality.

Finally the sustainability requirements of fair trade means that the process of production won’t undermine the local environment in the long term, promoting sustainable development.

If you’d like to read more about the general advantages of Fair Trade then this is a decent article:10 Ways Fair Trade Helps Advance the Millennium Development Goals

Criticisms and Limitations of Fair Trade as a Strategy for Development

  • The Fair Trade Price Guarantee is a minimum income guarantee – if the market price of, for example, coffee, increases and so the price of the finished coffee increases, there is no guarantee that the workers will receive the higher price.
  • It follows that workers working in regular non fair trade organisations might be better off if there are price spikes in the product they produce.
  • Guaranteeing a minimum income may in fact keep workers trapped in primary product production and discourage them from diversifying into more profitable areas.
  • In the grand scheme of things 1.66 million workers is NOT that many workers – there are BILLIONS of workers in developing countries, even if 10 million workers were benefitting from Fair Trade, that would be less than 1% of the workforce in the developing world!

If you’d like to read more, you might like this article from The Guardian (2017): Fair Trade only Really Benefits Supermarkets.

Relevance to A-level sociology

Fair Trade is an alternative fo Free Trade and is a response to the many criticisms of how trade does not work for development.

How Europe’s Agricultural Polices Hurt Africa

International trade policies seem to benefit large scale industrial farmers in Europe and hurt smaller scale farmers in Africa.

This is according to a recent 2018 DW documentary which focuses on how Industrial technology, large scale industrial production and European Union Subsidies make EU agricultural products much cheaper than locally produced African agricultural products, despite the much lower wages in Africa.

It is evidence which suggests that the global trade system is not promoting development in Africa – rather it benefits developed countries as they are able to export their cheaper products to poorer countries which undermine local farmers who produce viable alternatives.

The documentary focuses on Wheat produced in Germany and how this ends up being three times cheaper than other flour products such as Cassava which is grown in Senegal.

This is an excellent contemporary piece of research for Trade and development which is one of the main topics in the Global Development option for sociology.

The documentary is perfectly suited for teaching Global Development as it is split into several key sections which contrast agricultural systems in Germany and then Senegal.

Wheat production in Germany

The documentary starts off by visiting a 40 Hectare farm in Germany – the guy who runs it only does it as a side venture as he cannot live off the income he gets from his crop – which is 20 to 22 EU per year, which includes a government subsidy, which makes up 40% of his income.

Wheat exporters

The documentary now goes to the port of Hamburg and interviews a wheat exporter – 40% of Germany’s wheat is exported and 25% of that goes to Africa. NB Germany aren’t the largest exporters to Africa, that is mainly China and the USA.

Shops in Senegal

Next we visit the capital of Senegal and go to some food shops, nearly all of which are stocking exclusively EU imported food stuffs, such as wheat flour and vegetables.

They only find one shop on the outskirts which stocks Cassava flour, which is locally produced and it is three times as expensive as the imported EU flour, which is odd given the higher wages in Germany.

The Millet Co-operative

We now go to a local co-operative which produces Millet, an alternative to Wheat, which can be ground into flour. They say that they would like to process their raw grain into flour and sell that because it would fetch more than the raw grain, but they can’t sell it because of the cheaper EU wheat imports.

We actually see two women who should be employed to grind the grain, but they are not because of the lack of ability to sell it (the lack of a market).

Perversely the co-op is funded by EU aid money which they used to buy grinding stones.

Instead of selling it, the millet is used mainly for their own consumption.

The local shop even stocks EU products such as onions and powdered milk despite the fact that these can be produced easily enough in Senegal.

Things are set to get worse

The documentary now visits a Port which has recently been upgraded with over 70 million EU of aid money, making it easier to import even more products from the West, which are increasingly processed abroad.

The EU is also in negotiations with several African countries to remove trade barriers, giving them even less freedom to protect themselves.

The consequences of unfair trade

It’s mooted that if local farmers cannot make a living (80% of people in Senegal work in agriculture) they will increasingly look to migrate – thus EU policies could be causing migration to Europe from Africa.

The EU won’t defend itself on camera

The documentary tried to get a member of the EU responsible for agriculture to discuss its findings, no one was available!

Could Senegal feed itself?

The answer seems to be yes – at one point the documentary focuses on a research project which led to a higher yield Millet crop being produced, but the higher yields are fed to cattle not people because of the cheaper imported Wheat.

In order to benefit local farmers, countries such as Senegal in Africa need to be allowed to develop, they need to be allowed to protect themselves from cheap EU imports, which are cheaper because they benefit from more than a century of technology and policy developments which makes their goods cheaper.

The situation with Wheat is contrasted to that of Chicken – Senegal slaps a 30% import tax on Chicken and there are plenty of local farmers selling Chicken in the local markets, just not flour products.

As it stands it seems that the global trade system here is benefitting a handful of farmers in EU countries at the expense of many more farmers in poorer countries.

How is UK Development Aid money spent? some useful tracking tools

Even with the recently announced cuts to UK development aid, the United Kingdom will still be spending around £10 billion a year on overseas aid from 2020 onwards.

£10 billion is a lot of money, so it’s fair enough that we should be able to keep track of where our tax money is going!

Thankfully it is relatively easy to keep track of where they money is being spent.

All you need to do is to go to the Foreign and Commonwealth Office’s Development Tracker

This tool provides you with an overview of the countries in which we spend most aid, and the areas of development – so you can see that last year we spent the most aid in Ethiopia and health was the main area of expenditure…

You can then click through to individual countries, and from there to individual projects, for example this link will take you to an overview of ‘solar Nigeria‘ – a project with a 5 year budget of £66 million to provide solar energy to schools and hospitals.

How do we measure the effectiveness of Aid spending?

NB – knowing where our aid money is spent is not the same as evaluating the impact!

To evaluate the impact of any of the projects listed on this site you need click on further tabs to get the the ‘documents’ (here), where you can read about how the project is going.

This should give you an insight into how difficult it is to evaluate the success of aid expenditure: just to keep track of the expenditure year on year is an effort given that there are so many different actors involved with spending the aid money – the FCO (previously DFID) works with projects which are already up and running, which can mean working with different partners.

Then you have to evaluated the impact in the context of the problems faced in local conditions – there are all sorts of issues such as conflict and corruption which may mean aid money not being spent as you’d like!

And this is just one project – out of thousands that UK aid money is currently being used to finance!

Is the UK right to cut Overseas aid to 0.5% of GNI?

The United Kingdom has been a world leader in providing Official Development Aid in recent years. In 2019 the UK was the third largest donor in absolute terms and the 5th largest relative to it’s Gross National Income.

However, that is now set to change as in November 2020 the UK government announced that it would cut UK aid from 0.7% of its GNI to just 0.5% – meaning that it will reduce from around £15 billion per annum to nearer £12 billion.

Arguments for reducing Overseas Development Aid

The main reason for the cut is that we are facing an economic downturn due to Coronavirus, and the Chancellor has said that it’s hard to justify spending money overseas when we are stretched to pay for health, education and benefits at home.

At first glance this relatively small cut to aid expenditure seems justified when the government is looking at a lower income next year due to a decrease in tax returns – because people have been spending and earning less, and because they have had to pay out more to support ‘furloughed’ workers, all of which has been borrowed, and thus increasing the national debt, which will have to be paid off with interest in coming years.

However, there are several arguements against cutting overseas development aid:

Arguments against cutting overseas aid

  • millions of children will go without vaccinations next year, and around 100 000 will die (presumably in 2020) from preventable disease as a result.
  • 2 million people will lose humanitarian support
  • almost 4 million will lost access to clean water.
  • (Source for the above)
  • and without this assistance more children will die.
  • Fewer children will go to school, one million fewer as a result of the 30% cut.
  • Ironically it may hurt economic growth – aid gives us influence in emerging markets which can benefit British businesses (especially as aid is now more targeted towards supporting UK interests).
  • It harms our national reputation as wanting to play a role in global governance, especially post Brexit.
  • It breaks a commitment we made to UN and breaks UK Law – the 0.7% was enshrined in law in 2015.

Find out more…

For more information on this topic, please see the links on my ‘Globalisation and Global Development‘ page.

The Problem of Private Sector Debt and Coronavirus in Developing Countries

This recent report by Global Justice Now highlights the increasing role of private sector companies in providing loans for development to developing countries.

Some of these loans often have quite significant interest rates, as you can see from this chart – the longer the loan term, the higher the interest rate:

NB the institutions holding these bonds (hence giving out loans effectively) are some fairly big name financial institutions, such as Goldman Sachs, Black Rock and HSBC.

There’s nothing particularly unusual about countries taking out loans for development, and the kind of interest rates above are not a problem IF GDP/ GNI can grow at a similar percentage to the loan interest rate – which has been the case in the above countries for the last several years.

The problem now is that with Coronavirus all countries have taken a hit to their GPDs, and growth rates globally have plummeted to around 0% – so now countries such as Kenya are in a situation for at least the next year where they have to pay all of that interest on their debts but without the growth the expected.

The problem with the loans coming from private sector companies is that they are less likely to offer debt relief (like a cut in interest rates) compared to public or aid agencies.

NB – these loan repayments aren not small, Kenya spends a similar amount of its health care system compared to its debt payments.

Relevance to Global Development

This seems to be yet another example of how Coronavirus is going to lead to increasing inequality – the Corporations continue to get their interest payments while the poor countries struggle with a declining GDP.

Please click here to return to the main ReviseSociology home page!

The US-UK Trade Deal: More Neoliberalism?

Brexit hasn’t been in the news much since Covid-19, but we’re still leaving the European Union in January 2020, which means we haven’t got long to get some trade-deals in place with several different countries.

The United States is one of the UK’s largest trade partners, with around $250 of trade between the countries every year.

We’ve actually been in trade negotiations with the United States since we knew there would be a Brexit in 2017, and we’ve just started up another round of talks, although a deal is apparently unlikely before the US elections in November 2020.

If we look back at the documents from the trade-talks since 2017, it seems that the US is pushing for the following:

  • The privatisation of the NHS and other public sector companies
  • Higher prices for US drugs companies
  • Protections for digital companies such as Facebook and Google
  • The UK has to accept ‘chlorinated chicken’
  • Oh, and they banned climate change from the talks too.

The above is according to some analysis from Global Justice Now and can be found here.

A trade deal with the US: A shift towards neoliberalism?

For an outline of what neoliberalism is see this post.

The trade talks so far have consisted of the US arguing for a pro free-market pro-Corporation agenda – a trade deal that allows large drug and digital companies more freedom to profit from our public services.

The fact that we haven’t caved into their demands yet suggests there is some resistance to the idea of too much neoliberalism, however, now that Brexit and a recession are looming, it will be interesting to see what kind of deal will be struck.

Especially since the NHS are now our heroes, this kind of deal might get some very negative publicity and mass resistance!

Global politics could get very interesting in the next few years!

If you’re and A-level sociology teacher, it might be a good time to switch to teaching the Global Development option!

Outline and explain two reasons why trade does not always promote development (10)

One reason is that poorer countries tend to export low-value primary products such as agricultural goods, while richer countries export higher value goods.

Frank (1971) argues this is a legacy of colonialism during which rich countries made their colonies specialize in exporting one primary product such as sugar or cotton back to the ‘mother land’. After independence, developing societies were over-dependent on exporting these primary commodities, which typically have a very low market-value.

Examples include The Ivory Coast in West Africa – 33% dependent on cocoa beans; Kenya (in East Africa) which is about 30% dependent on two primary products – tea and cut flowers.

This type of trade does not necessarily promote development because the declining value of such commodities means developing nations need to export more and more every year just to stay in the same place. This has been described as ‘running up the downward escalator’.

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A second reason why trade doesn’t work for development is that the global capitalist system depends on inequality

Emanuel Wallerstein argued that the world capitalist system is characterised by an international division of labour consisting of a structured set of relations between three types of capitalist zone:

    • The core, or developed countries control world trade and exploit the rest of the world.
    • The semi-peripheral zone includes countries like China or Brazil – which manufacture produces
  • The peripheral countries at the bottom, mainly in Africa, which provide the raw materials such as cash crops to the core and semi periphery.

Companies in the core countries need to keep prices of end-products as low as possible in order keep up demand, so they pay as little as possible for the raw materials and manufacturing. In short, the development of the west in terms of cheap, consumer goods depends on the poverty of the periphery and relative poverty of semi-periphery.

However, this may not always prevent trade working for development – countries can be upwardly or downwardly mobile in the world system. Many countries, such as the BRIC nations have moved up from being peripheral countries to semi-peripheral countries, and some (e.g. South Korea) can now be regarded as core countries.

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Thirdly, a lack of regulation at both global and national levels means that workers have few protections in developing countries and thus don’t benefit from trade.

Many workers are exploited with low wages in sweat shops, which means workers don’t earn enough money to pay for social development such as education or health; Bangladesh is a good example of a country in which poor health and safety regulations result in high deaths.

Other Corporations such as Shell extracting oil in Nigeria burn gas flares and have leaky oil pipes which destroys the environment and leads to women miscarrying, which actually pushes the development of some areas backwards.

Dependency Theory argues that Nation States compete in a ‘race to the bottom’ to attract Transnational Corporations (and extract materials/ produce goods to trade) through having the least regulations.

Does Aid Work? The Aid Audit

Does Aid Work? The Aid Audit:

Below is a summary of this World Service Podcast from 2015

Intro

‘Fifteen years ago, German journalist, Ulli Schauen helped compile a book of the top 500 global aid programmes… they ranged from schools for Maasai nomads to support for organic farming to training for volunteer sexual health workers.

The question is did they succeed or fail? Ulli travels to Kenya to see how the projects in that country fared. Ulli sets out to find if Aid really does make a difference.’

(These projects were all related to the original Millennium Development Goals and the folllow ups are here – one author’s blog – The Aid Audit: Development Projects Revisited After Fifteen Years

International Aid money has helped all of the projects below….

Kenya
Kenya

Project One – OSIGILI

in 1995 the Laikipiak Maasai formed an organization called OSILIGI (which means ‘Hope’.)

In one of the first projects OSILIGI organized reading and writing courses geared to the nomadic life. In April, August and December, when the nomadic herdsmen are settled, a teacher comes to the village. During these weeks children have concentrated lessons. This made-to-measure education is considerably cheaper than state elementary school. In 4 years, OSILIGI has reached 380 children with this programme, mainly from poor families.

Eco-Tourism - Marginalising the Maasai?
Eco-Tourism – Marginalising the Maasai?

However, the broader issue OSILIGI campaigns for is to establish land rights – to pasture and watering holes, and here they appear to have lost. The Maasai still have no formal rights and their land, and thus way of life, is under threat from agribusinesses and eco-tourism and in the programme we discover that the Maasai live amongst miles and miles of fences – which fence off private farms – one farm being as large as the island of Malta, which houses shipped-in Rhinos for eco-tourism, but this leaves little room for the Maasai.

Osigili seems now to be focussing on the education aspect, but the land rights issue has been taken up by another organisation – IMPACT. It is possible that more progress will be made in this area in the future.

Project Two – A Voucher System for Health Care

In the far West of Kenya the German Government Trained volunteer health advisers – 20 000 community health workers for 10 years. Unfortunately this terminated in 2006 and so no evaluation or final report can be found, the argument here, however, is that a lasting legacy

The German government now funds a voucher programme for the poor where they can use vouchers to receive free or subsidised contraception, maternal health services and HIV treatment.

Through the voucher programme local (privately run) hospitals receive $50 for maternal treatments and $12 for AIDs screenings (from the German Aid fund, they don’t get state funding) – 3/4s of the money goes on medicine and food, but the rest is available to allow for hospital expansion.

To give an example of how it works – one woman is interviewed who is HIV positive, and giving birth in the hospital meant that the infection was not passed on to her two children.

Despite the above, Kenya still failed to reach two of its MDGs -reducing infant mortality and improving maternal health.

But German Government trying to influence Kenyan health policy into the bargain. Germans wand to promote health insurance, Americans want to promote other issues – donors don’t co-ordinate their programmes.

Project Three – The Matinyani Business Cooperative

mat

This is a cooperative of 4000 women, who initially set up a library, primary school and a health centre. They also established a range of small businesses devoted to weaving, water, candlemaking, bakery.

However, all of this stopped working years ago… 75% of the initial money went into other people’s pockets – so they couldn’t pay workers or for materials to keep the projects going.

However, what these women learnt in the early days of this project allowed them to establish their own businesses, many of which are today successful and export to other countries.

Project Four – Environmental Protection on Lake Victoria

darwins-nightmare1

Lake Victoria is heavily overfished and polluted.

This projects aims were to build water treatment plants and limiting the spread of the water hyacinth. There are laws in place about catch size (enforced by the mesh size of nets). However, it seems that everyone is happy about breaking the law and the aid-funded environmental organisation doesn’t seem to be enforcing the rules.

The World Bank Project labelled this one as unsatisfactory.

Project Five – A Foot Pump for Water

An Australian company called Kick Start (originally known as Aprotec ) which focussed on developing just one product – a small, foot operated water pump, claims to have lifted almost one million people out of poverty. Aid has been essential in this. The CEO says that it is not profitable to develop such products for people – it’s high risk, low return, and high cost – so it’s a market failure – thus subsidies in the form of International Aid, with this money going mainly into Research and Development and marketing (radio ads).

The pumps themselves are sold for $130 – and they have sold 250 000, which means about 900 000 will have been lifted out of poverty. We visit a tree nursery to see how this works – where an employee is using the foot pump (like a step machine) to pump water to water the young trees – this has allowed the company to grow a lot more trees and it is now much bigger than it used to be.

Question – Has development aid worked in the above five cases?

The programme finishes off by noting that we see all of the classic problems associated with Aid in the above examples, but it is the positive impacts which stick in his mind, especially the fact that when official projects collapse, the people who have gained skills carry on campaigning in different ways.

Find Out More…. There are another two episodes in the series if you wish to listen further!

How Private Aid Foundations Influence Economic Policy in Developing Countries

It could be used in the Global Development topics on ‘Organisations in Development’ or ‘the role of Private Aid in Development’

A flow chart of what’s below would run something like this…

TNCs (pump their profits into their) – Charitable Foundations (who established) – The Council of Foreign Relations (which influences) – The World Bank (which sets the economic policies of) – Developing Countries

Basically Roy argues that in the early 20th century, three of the largest corporations in the world (one of which was Ford) set up Philanthropic (charitable) organisations – In the middle of the 20th century, after World War Two, these organisations were key to establishing the Council of Foreign Relations, the World Bank, the United Nations and the CIA. Essentially, Roy is arguing that US Corporations run the biggest international organisations in the world, which in turn coerce Developing countries into doing what these Corporations want.

The enthralling history of ‘philanthropic foundations’ began in the United States in the early 20th century. Among the the first was the Rockefeller Foundation, endowed in 1914 by J.D Rockefeller, founder of Standard Oil Company.

Rockefeller was America’s first billionaire and the world’s richest man. He believed his money was given to him by God. Among the institutions financed with Rockefeller’s money are the United Nations, the CIA, and the Council on Foreign Relations.

Philanthropic Foundations are non tax-paying legal entities with massive resources with an almost unlimited brief. They are wholly unaccountable, wholly non transparent, and are basically about translating economic power into social, political and cultural capital.

They emerged in the 1920s because it was then that US Capitalism began to look outward for raw materials and overseas markets. Foundations began to formulate the idea of global corporate governance. In 1924 the Carnegie and Rockefeller Foundations formed the Council on Foreign Relations (the CFR), also funded by the Ford Foundation as well. By 1947 the CIA was working closely with the CFR and over the years the CFR’s membership has included 22 secretaries of state, and all eleven of the World Bank’s presidents have been members of the the CFR. The CFR also contributed a grant of £8.5 million to pay for the land in New York on which the United Nations building now stands.

Given that the World Bank has more or less directed the economic policies of the Third World, coercing them to open up their markets in return for loans and aid, and given that the World Bank is steered by the Council of Foreign Relations, which in turn is steered by Transnational Corporations, it seems to follow that it’s TNCs which really have really determined the foreign policies of third world countries over the past few decades.

By the 1950s the Rockefeller and Ford Foundations were funding international educational institutions began to work as quasi-extensions of the US government, which was at the time toppling democratically elected governments in Latin America, Iran and Indonesia.

The Ford Foundation established a US style economics course in Indonesia at the Indonesian University. Elite Indonesian students, trained in counterinsurgency by US army officers, played a crucial part in the 1965 CIA backed coup in Indonesia which bought General Suharto to power. He repaid his mentors by slaughtering hundreds of thousands of communist rebels.

Twenty years later, young Chilean students who came to be known as the Chicago Boys were taken to the US to be trained in neoliberal economics by Milton Friedman and the University of Chicago (endowed by J.D Rockefeller), in preparation for the 1973 CIA backed coup that killed Salvador Allende and brought General Pinochet and a reign of death squads, disappearances and terror that lasted for seventeen years. Allende’s crime was being a democratically elected socialist and nationalising Chile’s mines.

Like all good Imperialists, the Philanthropoids set themselves the task of creating and training an international cadre that believed that Capitalism and by extension the hegemony of the United States was in their own interests.

Corporate foundations also provide scholarships at universities for courses in development studies – and many of these are for people from the middle classes in the developing world – these are the future finance ministers, corporate lawyers and bankers of the developing world. Of course the courses funded are the ones which sing the virtues of neoliberal economic policy, rather than the ones which are critical of neoliberalism.

According to Roy, not only do Philanthropic Foundations control the agendas of International Economic Organisations, governments and education systems, they also control the media and social movements which emerge to protest neoliberal policies – she gives a few examples of how, but probably the best piece of supporting evidence for this point of view is that we don’t question the role of philanthropic foundations in society. When Corporate funded philanthropic foundations first appeared in the United States, there were debates about their accountability, and people suggested that if they had so much money they should maybe raise the wages of their workers instead, nowadays we just don’t question them.

In summary, Roy argues that Philanthropic Foundations are simply a way of using a minuscule percentage of profits to run the world.

A Question to Consider….

The largest philanthropic foundation on earth today is the Bill and Melinda Gates Foundation. Roy points out that it’s odd that Bill Gates*, who admittedly knows a thing or two about computers, is now designing education, health, and agriculture policies, not just for US governments but for governments all over the world.

The question that Roy makes us ask is this – Is Bill Gates really trying to help people through his organisation, or is the Bill and Melinda Gates Foundation really a just a way for Gates to translate his economic capital into global political power, and to make sure that government policies the world over benefit Microsoft?

*Or to refer to him by his full name – ‘The Man Child Bill Gates’.

Sources 

The above post is summarised from Arundhati Roy’s ‘Capitalism: A Ghost Story’ (2014).