Is aid the solution?

David Lawson argues that, when it comes to debt and trade, the shocking proof is in the statistics.

''Developing countries pay roughly nine times the amount of aid they receive on debt payments.''

Before we go down the obscure route: “Is aid effective or not?” Let’s step back and take a look at this red herring.

Developing countries pay roughly nine times the amount of aid they receive on debt payments. In one day during June 2002, £24billion was wiped off the stock market. Yet in the same month the G8 gave £1billion in conditional aid to Africa.

On top of this, real sustainability can only be gained by allowing these countries to stand on their own feet - not by propping them up with unreliable aid which, if withdrawn, could make their situation worse.

So the real question is, how do we give these countries independence?

Firstly let’s look at debt. Between 1503 and 1660, 185 tons of gold and 16,000 tons of silver were taken from Central America to Europe. Surely this was merely a case of borrowing, and forgetting to pay back? Now leave a period of 200 years, and assume an interest of 10 per cent (well below the 20-30 per cent we currently charge). In 2002 we would owe $391,000,000,000,000,000,000. Seeing that we force other countries to pay their debts, shouldn’t we pay our own?

Secondly, poor countries lose $700billion in earnings annually due to the trade barriers of industrial countries. And before you think it, I’m not advocating all trade barriers be dismantled. Rather, unfair barriers, which prevent developing countries converting their commodities into higher value manufactured goods, should be abolished.

Yes, I know I’m bombarding you with statistics but do take a moment to comprehend them, it reveals a shocking picture.

The message?

It is time we saw through the misleading attempts by our politicians to seem as though they are doing something about the crises in developing countries. In my view if we really want to help these countries to help themselves we need to move our focus from increasing aid to eliminating all debt and unfair tariffs.