Friday, March 1, 2024

Foreign aid and neo-colonialism


For multiple reasons, it would have been much useful writing this article in Nepali. One of the key reasons is that the target readers of this article are particularly Nepali people. The ideal means of conveying my ideas to ordinary Nepali people would have been much convenient in the Nepali language.

However, a lot of articles and literatures researched for the conceptualization of this article are in English. Hence, the transcription of my ideas would best be reflected in English. I extend my sincere apologies to all those readers who would have otherwise benefitted if only I had written this piece in Nepali. Besides, the pain of Nepal is not stereotypical pain but it is by and large the pain of all the so-called developing countries around the globe. Thus, people in all these countries will benefit from this article if it reaches them.

Lastly, I humbly request all the readers not only to internalize the content in this article but communicate the message of this article to all those who have difficulty in understanding the medium used here.

The content of the article, first of all, goes against the current in the sense that the entire system of our country is literally dependent on foreign aid, either in the form of hard-earned remittances or some sort of foreign aid, assistance, and hard or soft loan. I would delve into some crucial data.

According to the World Bank data, personal remittances contribute nearly 30 percent of the total GDP of the country. However, it has dropped slightly to 27 percentage last year largely due to the job losses in the international job market as due to the outbreak of COVID-19 pandemic. Nepal Rastra Bank data show that the contribution of remittance to the national economy in the fiscal year 2018/19 had been US$ 7.8 billion i.e., 25.4 percent of the total GDP. During the same period Nepal received US$ 1,793 million and US$ 115.5 million as development assistance and foreign direct investment (FDI), respectively. In total, roughly US$ 2 billion, which is over 6 percent of the total GDP is covered by the combined foreign aid of development assistance and FDI.

The implications of FDI disbursement through such donors have proven to be and would always be in favour of those who are the minds behind the creation of such organizations, but never to the benefits of the those to whom they pretend to have been established for.

According to the Finance Ministry’s report, Nepal received foreign aid to the tune of NRS 369 billion, which makes it the largest ever foreign aid amount contributing 33 percentage of the total fiscal budget of 2019/20. Of the total foreign aid 83 percent i.e., NRS 299.49 billion comes as foreign loan while only 17 percent i.e., NRS. 60.52 billion represents foreign grants. Going deep inside, one can find that the foreign assistance mainly arrives Nepal through the gates of the World Bank (WB) and the Asian Development Bank (ADB). The implications of FDI disbursement through such donors have proven to be and would always be in favour of those who are the minds behind the creation of such organizations, but never to the benefits of the those to whom they pretend to have been established for.

This article hopes to work as an eye opener in the vast scholarship that have either been covered up or attempts have been made not to let the public of such poor countries know the truth. It can serve as a trigger to readers for further search so that they can enlighten themselves with the knowledge of what they deserve to know.  

If only one wishes to be informed it is their responsibility to search for truths behind hundreds of plots designed apparently in favour of the countries but in reality, to destroy those countries. Dozens of attempts in assassinating Cuban president, hundreds of plots in killing the Latin American leaders, brutal murder of African political icons, never-ending poverty in Africa despite the fact that they are the source of most of the wealth of the West, years of civil wars in different parts of the impoverished world, double standard policies on human rights and democracy, and many more.

Looking into the case in Nepal, one may dig deeper into who the then Communist supremo Madan Bhandari was killed by, how the Royal Massacre was executed amidst the strongest security management, who is behind the murder of Amar Lama- the only surviving eyewitness of the Madan Bhandari’s accident, who did the economic policy of crippling the rapid growing industrialization serve, how did privatization engulf the on-the-track growing economy, what role did the World Bank-made economic hitmen play in breaking the rib of the country’s economy, how was the once-food-exporter Nepal turned into imported food-dependent Nepal, who is knitting the ploy for attracting FDI in agriculture, where do the billions of dollar vanish that is flooded into the country from various countries to donor agencies, and what not can be included in the list. If one attempts in uncovering the truths behind these questions, one can see in crystal clarity ‘why are we where we are now?’

What does the Global Power want?

Believe it or not, the global power, presently represented by the US and its allies, look for exactly how the events are developing in Nepal and most of the other so-called third world countries. In a way, it would not be otherwise to vow that events are happening precisely the way they were expected to happen. It might sound absurd at glance, however, in crux, it is what it is viz. Nepal is in ‘controlled instability’ exactly as the global hegemonic power expect it to be in. This instability is beyond the control of Nepalese, on the contrary, it is in complete control of the external power.

Let me explain in detail with some examples. A year ago, the WB provided Nepal with US$ 29 million financial assistance to combat COVID-19 while, just recently, it decided to provide an additional US$ 79 million loan to Nepal to buy COVID-19 vaccine. What we need to know here is that it is a loan, which means, at some point, the government has to be able to return it with the conditioned interest. Looking into the debt statistics, Nepal already surpassed a US$ 12.5 billion national debt from the donor agencies, which averages roughly Rs. 52,000 debt per Nepali with an estimation of 300 million (3 crore) Nepalese population and it is expected to more than double by 2025, according to the Stastista report, 2021.

Now, what one has to understand here is that not all the money accepted by any third world country is by choice but by force. That is these countries cannot deny the loan as they are already in such massive loan that the pressure of loan keeps them within the grip of these powerful donor organizations or the monetary organizations like the WB or ADB. What we need to understand is that it is not the choice of the recipient nation but the choice of the donor organization whether one receives such financial assistance. Dr. Howard Nicholas, one of the key men behind the Western monetary policy, reveals that all such organizations including the WTO are made only to serve the interests of the rich Western countries and not to the poor countries. They are born to make the poor countries poorer and the rich the richer.

What one has to understand here is that not all the money accepted by any third world country is by choice but by force.

These gigantic international organizations possess such tremendous power that once a country signs the agreement with these organizations, it is now in the total control of such originations. What is more pathetically astonishing is that more than on the countries such organizations root in, the decisive power lies within large corporations and these large corporations dictate such organizations in policy formulation. Free trade, for example, is one of such jargons that the West used to preach the philosophy that all the countries would mutually benefit and reap the fruits collectively, which is an absolute disaster for the poor countries. When proposed to ratify the laws to guaranteeing the agricultural products tariff-free, the US ruled out the proposal. The motive is not to let the poor countries with the immense potentiality of production of agricultural products and be independent since the rule of the game is not let the poor countries slip off the hands of the rich countries. And the other motive is preventing the poor countries of producing what it is best at producing rather convince, or at times coarse, these countries in producing what the rich countries wish them to.

If we look at agricultural production trend of Nepal, we can easily find how much the country has changed on the basic products Nepal used to be rich at producing. Marijuana from Nepal, for example, is one of such products which was so popular until early 1970s. In fact, Nepal was the hotbed for marijuana and thousands of marijuana-lovers would land into Nepal only for the sake of smoking the purest form of marijuana, which would nowhere else be as good as in Nepal.  Scores of youngsters frustrated of social and political affairs in the Western world would travel to Nepal to release their relentlessness and hashish and marijuana in Nepal were the soothing tranquilizers for them. The Annapurna Express reports that the Nixon-government persuaded, rather forced, the Nepali counterpart to ban marijuana since hundreds of young populations hit hard by the terror of Vietnam’s war were fleeing the country, which was popularly known in Nepal as Hippie influx. Professor Abhi Subedi reveals that a free gift of nature was generating a huge income for Nepal and with no doubt marijuana played a significant contribution to introduce Nepal as a one of the top touristic destinations.

The so-called free market policy championed through the WB in the 60s first convinced most of the poor countries to cancel agricultural subsidies and encourage privatization in agricultural sector while the WTO afterwards passed laws in the 80s that would provide financial assistance only to those countries that provide subsidies to their farmers. This left only few countries from the third world receive the WTO aid while overwhelming majority of countries to receive such assistance were again the rich countries since most of the European countries as well as the US had large subsidies for their farmers. The poor countries were blamed for their poor agriculture policies, which, in fact, was a part of a game plan to make the poor countries fall in the honey trap of the rich countries, particularly the US. Nepal, a country that exported rice until 2010 to a large extent not only became unable to export rice but ironically became a large importer of rice in no time.

The poor countries were blamed for their poor agriculture policies, which, in fact, was a part of a game plan to make the poor countries fall in the honey trap of the rich countries.

If you want to control a country, as Harold Nicholas mentions, you need to cut the backbone of the country by transforming it into a food dependent country so that you can inter into the country in the name of food security and you will be heartily welcomed too. Consequently, your advice will be heard, and you will easily convince the country to take loan to get rid of the troublesome situation. In this way, the poor countries will rely on the rich states since they would have no income generating industrialization or exporting of previously exported products. Thus, these countries are in complete control of the rich countries and they serve as the not only as the raw material suppliers but also as human resource suppliers for the developed nations. Most importantly, the money taken as loan would put these poor nations in no condition but to accept the conditions put forward by these Western industrialized nations.

Most of the Latin American countries were, before the US had emerged as the global superpower, self-reliant. Argentina, for example, was one of the top meat and corn producers until the US came into play. Peru, similarly, used to export a huge amount of corn until the US appeared in the power play. The anecdotes of how the south Asian nations, particularly Bangladesh were encouraged by the Dutch to use their better potato brands that would produce much more than their traditional potatoes. The Dutch, however, provided only the sterile potato seeds that would not be able to produce more seeds consequently, the farmers would have to rely exclusively on these giant corporations from the Netherlands for potato seeds. This is just one of the ways how these corporations from the West arrogantly monopolize the right over the ignorant poor people. The Bangladeshi innocent farmers had a misconception on these Dutch being so generous while they had such an ill motive behind their apparently altruist deed. These are merely a few of the representative cases. The stories of exploitation the West has done in Africa, particularly in Sub-Saharan Africa, are beyond humanity. How such infinitely potential rich region has been constantly fighting for hunger for ages reveal even more pathetic brutalities countries in this region have been experiencing.

It has been very evident that the Western countries have been clearly familiar with what happens to all the money that flows into the poor countries in the name of financial assistance. If they are familiar, the question then arises ‘why have they been constantly providing these poor countries with some donation, loan and other kinds of assistances?’. The answer is very clear, it is indeed a part of the global game.  

This is the beginning part of a long read. The remaining parts will be published in coming weeks.

Published on 15 September 2022