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article imageReview: 'Why Poverty?' Special

By Alexander Baron     Nov 27, 2012 in Politics
The BBC is currently broadcasting a series that asks this perennial question. The consensus so far appears to be that multinationals are the bad guys. But are they?
The BBC has a few webpages devoted to this series; there is also a dedicated website. This review is devoted to two episodes which focus on Africa: Give Us the Money which examines the phenomenon that was started essentially by one man, Bob Geldof, and the current episode, Stealing Africa.
Let's deal with the latter first; this focuses on Zambia, the villain of this piece is the multinational company Glencore, at least that is what we are led to believe. Basically there are two gripes about it, one genuine, the other contrived.
The contrived complaint, the one that takes up the bulk of the programme, is that it doesn't pay enough tax and uses sharp practices such as selling internally apparently at a loss in order to minimise its liabilities.
As Chris Tame said, taxation is theft.
It is always easy to bash the rich, from the likes of comedian Jimmy Carr to the super-rich, including especially multinationals, but appropriating their wealth does not benefit the poor, as Ayn Rand and many others have demonstrated. Do our leaders pay any attention?
On the other hand, if Glencore is responsible for polluting the environment - as it does appear - then it should clean up the mess. The Industrial Revolution began in Britain, and our forefathers paid for it. In Zambia, neither children nor women work down the mines, as they did once here, and it is worth remembering that although there was anti-pollution legislation of sorts dating back to the 19th Century, it was not until the 1956 Clean Air Act that Britain really did clean up its air. And let's not mention such things as landfill and asbestos.
The previous episode of this short series goes even further, taking a swipe at Sir (or should that be Saint?) Bob Geldof, the man who started the Band Aid bandwagon rolling. One of his and their critics appears in this programme, Dambisa Moyo. This woman is presented as the poster girl for the new Africa, and claims to speak here in her capacity as "an African woman". In reality she is a creature of Goldman Sachs, a member of the Cosmopolitan elite; her résumé includes the World Bank and the Council on Foreign Relations (the organisation believed by many serious scholars to lie at the heart of the New World Order).
This episode includes interviews with both Geldof and his fellow Irishman Bono, the song that raised £6 million for Africa, and the organisation these two musicians started. For Dambisa, this is something that is "basically laced with pity".
Dambisa is the author of a critically acclaimed book: Dead Aid. Its thesis can be gleaned from the title, the trillion dollars or so of aid the West has pumped into Africa over the past six decades has created rather than solved problems. This sounds absurd, but it is not quite so absurd when one examines where this aid went and what it was spent on. It is an old joke that aid is money stolen from poor people by taxation in rich countries and given to rich people in poor countries. She reaffirms that in spades.
In chapter 4 of her book, The Silent Killer of Growth, Moyo gives what is almost certainly the main reason aid has failed: corruption. After alluding to the President of Zaire - who looted $5 billion, and Sani Abacha of Nigeria, that gem of innovation, who is said to have looted the same amount, she says "It's not, of course, just one person who has taken the money. There are many people, at different levels of the bureaucracy, who have funnelled away billions of dollars over the years. Corruption is a way of life".
But if "The list of corrupt practices in Africa is almost endless", that is hardly the fault of Western donors, including the poor saps who donate their hard earned money to charities like Save The Children. There is a great and still widely propagated fantasy that Africa is so poor because the wicked Western "Imperialists" sucked the wealth out of it. In reality, Africa was built by the West, and the Chinese appear to have taken over where we left off.
If Moyo's book points its finger at the wrong culprits, that is hardly surprising, because it has a Foreword by bird of a feather Niall Ferguson, another highly paid academic who preaches austerity for the masses.
Returning to the documentary, we are told that in the 1990s, the West demanded repayment. Hold on a minute, in the first place, aid that has to be repaid is not aid but loans. In the second place it was not the West that demanded these repayments (at interest) but the banks, like Goldman Sachs, Moyo's erstwhile employer. There were calls for this debt to be cancelled, calls that were partially successful, the US Congress leading and the banks following. We are told that in the end about half this debt was cancelled, not because of or simply because of this lobbying but because the banks and the politicians realised it could never be (re) paid, having been conjured up out of thin air. Curiously, no one wants to apply this logic to the current situation in Greece, and elsewhere.
So what is the solution? Africa needs the same as the rest of the world, a sound financial system, an honest financial system, something we are not even close to. There are other causes of poverty, like war, which is endemic not only to black Africa but to the Middle East. The bottom line is it is all down to human folly, something the Bible and not a few similar texts have been telling us from time immemorial.
More about glencore, Dambisa Moyo, Bob geldof, Taxation, Multinationals
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