Foreign Aid – isn’t it the biggest scam of all time?

Foreign aid and corrupt politicians go together but little is said about those who are thego-betweens  – the multi nationals and the banks.   A sixth of Angola's entire annual budget – $6 billion – flowed illicitly out of the country in 2009, for instance , into the pockets of the trans-nationals.  $71 billion went 'missing' from Angola between 1985 and 2008 .  From 1970 to 2008, Nigeria lost a staggering $296 billion Estimates for the African continent is of illicit capital outflows range from  $854 billion to $1.8 trillion between 1970 and 2008.  Zambia Sugar,  recently posted record pre-tax profits and its huge plantation is increasing its capacity to produce more sugar for markets in Europe and Africa. Yet it paid less than 0.5% of its $123m pre-tax profits in corporation tax between 2007 and 2012.  In the last four decades: Côte d'Ivoire ($45 billion), the DRC ($31 billion), Cameroon ($24 billion), the Republic of Congo ($24 billion), and Sudan ($18 billion).  The  BBC Radio 4's File on 4 learned that almost £100 billion a year is taken out of Africa through accounting practices , both legal and illegal , – several times more than what the continent receives in aid. Kenya's official export statistics say almost 50 million kilos of tea left there in 2005 bound for Britain. But the British import statistics showed 75 million kilos – one and a half times as much – arriving here from Kenya. Companies shipping tea to the UK were under-reporting exports in order to avoid paying tax.  There is a practice known as "transfer pricing" – the means by which firms value their goods for tax purposes when they move them across international borders. In effect, this allows companies to undervalue their products. Tax avoidance, secret mining deals and financial transfers are depriving Africa of the benefits of its resources boom, ex-UN chief Kofi Annan has said.Firms that shift profits to lower tax jurisdictions cost Africa $38bn (£25bn) a year, says a report produced by a panel he heads.Africa lost up to $1.4tn in illicit financial flows in 1980-2009, far exceeding money coming in over the same period. The joint report from the African Development Bank (AfDB) and Global Financial Integrity (GFI), a US research organisation, says the continent has been a long-term net creditor to the rest of the world. "The traditional thinking has always been that the west is pouring money into Africa through foreign aid and other private-sector flows, without receiving much in return. Our report turns that logic upside down – Africa has been a net creditor to the rest of the world for decades," said Raymond Baker, president of GFI. The resource drain from Africa over the last 30 years is almost equivalent to Africa's current GDP "Africa loses twice as much money through these loopholes as it gets from donors," Mr Annan told the BBC. It was like taking food off the tables of the poor, he said.Between 2010 and 2012 five under-priced mining concessions were sold in "highly opaque and secretive deals" in the Democratic Republic of Congo, depriving the country of $1.3bn in revenues, double DR Congo's health and education budgets combined.In Zambia between 2005 and 2009, 500,000 copper mine workers were paying a higher rate of tax than major multinational mining firms. The Democratic Republic of Congo and the Republic of Congo are losing at least $12m annually in tax avoidance by logging companies, Greenpeace says.The environmental group says it has evidence showing how firms like German-owned Danzer group have set up "elaborate profit-laundering schemes". In its report, Conning the Congo, Greenpeace alleges the amount of tax lost each year is 50 times the DR Congo's Ministry of Environment's annual operating budget. I can go on and demonstrate further with the connivance of local politicians and the mediation oftax havens what is spent on foreign aid to 3rd world is dwarved by the amount cheated from the people.  In addition much of the so-called aid are mega-developments that don't benefit the poor and only line the pockets of the local rich elite and the international companies involved.  Try reading this article debunking foreign aid as a means of aid  http://socialistbanner.blogspot.com/2010/04/when-aid-is-no-first-aid.html

Foreign aid under capitalism can seem strange especially to proprietarians (or so-called libertarians). In fact, it often comes with strings attached about opening up national markets to foreign trade, reducing workers conditions etc. So it makes sense under capitalism.Also, Nigeria was mentioned before and it is a staggering example of one of the most resource-rich countries in the whole of the African continent remaining impoverished.