First aid, then poverty

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Aid organisations pose as the noble saviours of the needy. In fact they often reinforce and deepen exploitation

Bob Geldof was recently invited to Australia to talk about world poverty. His fee was £100,000 - and of course he flew first class. It was one small chapter in the story of an industry whose gross earnings put it fifth behind the world's largest economies - the aid industry.

The issue has dramatically entered the news again, with the earthquakes in Haiti and Chile and the continuing drama of Darfur. It confronts you every day as the charming young "chuggers", with their umbrellas and yellow jackets, deliver their charity scripts with a smile.

US president Richard Nixon once said, with unusual honesty, that "the main purpose of aid is not to help other nations but to help ourselves". Yet those architects of war and mayhem, Bill Clinton and George W Bush, still tried to represent themselves as humanitarians when they stood beside Barack Obama and appealed for help for Haiti after the earthquake in January. When the cameras left and the attention of the world turned to ash clouds, the real intentions behind the appeal became clear. Clinton (together with the UN secretary general) had argued in 2009 that the only solution for Haiti was to allow the multinationals free access to its cheap labour. The earthquake served to accelerate the process. Aid went to create better conditions for foreign capital - only a tiny proportion ever reached the poor or needy.

At the very least, 40 percent of donations go to the administration of the 37,000 charities around the world - many of them competing with each other for funds rather than collaborating in the face of disaster. The International Committee of the Red Cross and Médecins Sans Frontières, for example, are often rivals for the same money. In the case of Haiti, there were several thousand organisations battling over the cash. Almost all aid organisations work through governments, paying off large numbers of civil servants and functionaries on the way - another slice that never makes it to the places where people who give their money in good faith imagine it will reach. Once the goodwill and humanity of ordinary people have been mobilised, no further account is ever given. Yet those funds, for all their charitable image, are used in a competitive race for influence, or domination, whose rules are determined by the same forces that control every other market.

More importantly, the neediest are often the victims of governments, or their enemies. Michael Maren, a US aid worker turned whistleblower, is withering in his criticism of the aid organisations. In most cases, he says, they act as government contractors, because the bulk of their money comes from states rather than individuals. No one imagines, of course, that states' money is given for altruistic reasons. Aid does not arrive as bundles of cash in an old suitcase. In fact, the bulk of aid comes in the form of credits to buy goods or services in the country giving the money. That's what Nixon meant. And where the purposes are less clearly economic, they are usually political.

Aid is sometimes a battering ram used to open locked doors, more often a political instrument to reinforce friendly power brokers. The absolute neglect of Kurdistan in recent disasters, for example, reflects Europe's need to keep Turkey sweet. And the Red Cross will not go into any area without the approval of its government. The resulting collusion conceals the realities - it is reflected too in the enormous wealth of corrupt officials whose permission to operate in their area comes at a steep price.

Linda Polson, the Dutch journalist, has written recently about her experiences in Kabul - and as Michael Maren confirms, this is typical and representative. In the majority of cases aid workers, together with UN troops, live in splendid and luxurious isolation from the populations they are supposed to assist. No one begrudges an aid worker a little comfort, but Polson speaks of casinos, luxury restaurants and lap dancing clubs in Kabul where Westerners can spend their leisure time under strict security supervision. In ex-Yugoslavia, UN troops and aid workers were involved in prostitution and drug trafficking with the cooperation of local politicians.

The aid industry, like so many other industries, is shrouded in secrecy despite its public profile. And, like so many other areas of public life, the shadows hide corruption, profiteering and abuse. When the G8 politicians gave their final news conference at Gleneagles in 2005, and Bob Geldof and Gordon Brown congratulated themselves on their generosity, there was a dissenting voice from Action Aid Africa. It was drowned out by the media hullabaloo, of course. Their argument was that aid systematically reinforces power structures, which are more often responsible for disasters than nature, and undermines any possibility for local initiatives and control over aid.

Wherever the International Monetary Fund and World Bank intervene global priorities are enforced at the expense of the people on the ground. The World Trade Organisation, for example, makes it illegal for governments to resist multinational takeovers of services like water or electricity because it "interferes with free trade". Aid creates dependency and deepens exploitation.

This is not an argument against sending resources where there is need. But the control of them cannot be left to the global market in any of its disguises, and still less to a UN which serves those same interests slavishly. Aid worthy of the name will strengthen the capacity of people to shape their own lives - and that will mean resisting the capitalism which only ever helps its own.