Thursday, July 07, 2005

Live8's Heart is in the Right Place...but it's Head....

Recently, President Bush and Prime Minister Blair met to draw up a policy (prayers out to the Londoners, this morning), forgiving African debt and pledging $674 million in emergency humanitarian aid. The US already donates a quarter of all foreign assistance to Africa. There have been several Marshall Plans over the past 40 years, amounting to what? The end to poverty? No. Just money squandered to corrupt regimes. And how can we forget all the private donations of charity over the years, and past events like "We are the World"? 1985 Live Aid raised close to $150 million for famine relief; yet the majority of that went to a corrupt Ethiopian government and the propping up of yet another brutal dictator, Mengistu. Good intentions with bad results. Do we ever learn?

Here's a nice opinion piece from Mark Steyn, regarding the "generosity" of those celebrity rockers and their misguided notions of redistributing your money. And this from the Heritage Foundation is worth reprinting:

Free-Market Foreign Aid? Remittances and Regulation

07/05/05 08:15 AM

What’s the biggest source of foreign aid for the developing world? For many poor countries, it is not government-to-government grants. Instead, it is remittances – money sent back home by third-world migrants working in the U.S. and other first-world nations. This form of assistance was the subject of a conference held last week in Washington at the Inter-American Development Bank (IDB). Remittances also received some attention in a USA Today op-ed appropriately titled "A way to feed the world."

The numbers involved are staggering. A recent IDB report found that the flow of remittances from the U.S. to Latin American and Caribbean countries reached $45 billion dollars last year. For some countries, remittances are one of the largest components of GDP. Relative to traditional foreign aid, this is not necessarily a bad thing. Avoiding the top-down bureaucracy of traditional aid programs--and all that comes with third-world bureaucracy--remittances reach the poor directly. As the USA Today op-ed put it, remittances "let the world's poor decide for themselves how best to improve their lives."

This is a market-driven system that’s working, and it's working well. Competition in the international money transfer business has increased in recent years, decreasing the cost of remittances. Some, however, have called for increased regulation of this market, and bills are already pending in Congress to control how remittances are handled. So far, these bills call only for greater disclosure of fees, but there have also been scattered calls to regulate prices directly. This could muck up the system, hurting the poor most of all. Instead, politicians should be reducing regulation and thereby lowering costs for those who send and receive remittances. Allowing credit unions to offer remittance services would be a good step.

Once again, I look at it as noble liberal intentions to make you feel good about yourself, without ever looking beyond stage one thinking and examining what in fact actually happens as a result of one's desire to feed the homeless and to help the poor. Often, our liberal good will and intentions only make matters worse....not better.



Blogger Mark said...

My God, that live8 stuff is so misguided it's scary. I hearda story on the radio the other day that one of those countries was sent over 300 billion once and the expenses of the dictator/president just happened to be 300 billion. The poor and hungry got none of it. Sorry, but I don't recall the details.

Thursday, July 07, 2005 8:04:00 PM  

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