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How Canadian ‘aid’ is stifling development and prosperity in West Africa

The failed dictum that the private sector is the only viable engine for poverty reduction is at the heart of Canada’s aid policy

AfricaHuman Rights

Canadian aid programs in West Africa have failed to move the needle on poverty reduction, highlighting the need for a new rights-based development policy in the region, writes Owen Schalk. Photo from Shutterstock.

The International Monetary Fund frequently writes poverty reduction strategy papers (PRSPs) about underdeveloped countries in which it has implemented neoliberal structural adjustment policies. A significant number of these reports are available to read online.

Scrolling through the catalogue makes for disorienting reading, since one soon discovers that the world’s most impoverished countries are often those with the largest number of poverty reduction papers: the Democratic Republic of the Congo’s entries begin in 2002 and end in 2013; Rwanda goes from 2000 to 2013; Burundi from 2004 to 2012; Burkina Faso from 2000 to 2008; Mali, Uganda, and Mozambique from 2000 to 2014; and on and on.

What is particularly astounding is the IMF’s stubborn inability to recognize that its policies are in fact perpetuating poverty, not reducing it, in the countries about whom it produces entire libraries of poverty reduction reports. All of the PRSPs which I’ve read eventually resolve that more, not fewer, structural adjustment policies are necessary to relieve the material suffering of these populations.

As stated in the 2006 report on Burkina Faso, the IMF asserts that “the private sector remains the principal engine of growth.” Each report reiterates the same point: the government either intends to intensify privatization or must expand it further. From the 2000 PRSP on Burkina Faso:

the Government has decided to carry out… trade liberalization [and] privatization of existing state interests… the Government will move to restructure the [cotton] sector… by encouraging the entry of new companies and greater competition… The Government should also resolutely pursue liberalization of the animal hides and skins export sector to make it more competitive and dynamic.

In subsequent years, PRSPs included similar language promoting “privatization programs” to “improve the fundamentals and competitiveness of the economy, and particularly the business climate to facility private sector development.”

In 2009, after Burkina Faso had implemented a sprawling suite of neoliberal reforms that hauled essentially every sector of its economy into private hands concentrated in the Global North, the financial crisis hit. The IMF reports that GDP growth declined 5.2 percent that year and poverty rose by four percent. No subsequent PRSPs concerning Burkina Faso are publicly available.

As of April 2020, over 75 percent of the Burkinabé people live on less than $3.20 USD per day. Over 92 percent of people live on less than $5.50 per day, or what World Bank economists call “upper middle class income.” Extreme poverty rates (what the World Bank defines as living on less than $1.90 USD per day) remain between 40 and 50 percent in much of West Africa. And yet, structural adjustment policies continue to be championed by international financial institutions (IFIs) such as the IMF and the World Bank, who view GDP growth rates as synonymous with poverty alleviation in a globalized form of the widely discredited “trickle-down economics” model.

For example, the World Bank touts as a success the fact that per capita income in Burkina Faso has risen from $360 USD in 1990 to $720 USD in 2013: an increase from $1 USD per day to $2 USD over a span of 23 years, a period which has seen billions in profits channeled from Burkina Faso’s agricultural and mining sectors into the pockets of Western companies.

This lack of progress has resulted from the fact that, according to neoliberal development ideology, only those who produce profit for their investors are worthy of investment. According to this framework, impoverished African people are not returning on investment unless they are incorporated into a global capitalist economy which profits the privatizers—or in other words, removes important funds from African hands and places them in North American and European pockets, a tiny fraction of which is sometimes returned to the African continent, often via NGOs.

The IMF and World Bank programs represent what Indian economist Prabhat Patnaik calls the “means-based” approach to development. This approach does not view global capitalism or neocolonial relationships between the Global North and South as root causes of poverty and underdevelopment, and in fact believes that “the essence of the problem of development consists in simply expanding the sum total of the available means of production and consumption.” Put another way, the expansion of capitalism around the world and the liberal restructuring of Global South economies is seen as gradually reducing poverty rather than cultivating a continent-spanning underclass whose poverty is the dialectical inverse of the North’s prosperity. This positivist view of human development resembles the arguments of popular liberal writers such as Steven Pinker, Hans Rosling, and Yuval Noah Harari (it resembles them so closely, in fact, that one might conclude that these writers are simply making excuses for global capitalist inequality).

While claiming to respect the universality of basic human rights such as the right to food, water, and freedom from slavery, the means-based approach ties development aid to a country’s willingness to surrender itself to the mechanisms of exploitation that service the industrialized Western world. This approach rejects the idea that socialism, communism, or any form of politics which has historically typified emancipatory ambitions across the Global South can alleviate poverty because means-based aid is, through the active spread of its productive modes, synonymous with the alleviation of suffering. Whether or not it is openly stated, this is the logic by which industrialized Western countries, IFIs and parastatal aid agencies operate: development is only achieved via productiveness for the Global North, and this is attained through neocolonial control of Global South resources.

These are the material motives that lurk behind the means-based rhetoric of poverty reduction and shared prosperity. The justifications are superstructural and exist in order to excuse an inequitable status quo. The logic behind the means-based approach, which inherently ties human value to productive modes championed by Western capital, is eerily similar to the worldview espoused by Larry Summers in his infamous 1991 memo as Chief Economist of the World Bank, in which he advocates the dumping of toxic waste in “the Least Developed Countries” because they are less productive in his eyes. “A given amount of health impairing pollution should be done in the country with the lowest cost,” he wrote, “which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.” The economic logic behind tying development aid to trade liberalization is—from the perspective of a devout adherent to market fundamentalism—similarly impeccable.

Whether or not those who espouse a means-based development approach understand that they are dehumanizing those on the bottom of the neocolonial supply chain is irrelevant. Their allegiance to global capitalism prevents them from seeing the merits in alternative models of development. As Mark Fisher writes, “capitalism seamlessly occupies the horizons of the thinkable,” and nobody has a more myopically capitalist worldview than the apparatchiks of the IMF and World Bank, who write the same poverty reduction reports year after year and do not realize that their proposed remedies never actually fix the problem of poverty.

Canadian development aid is distributed according to the same logic. The funds which the government distributes around the Global South often function as job-training programs for Canada-based industries, in particular mining companies, rather than programs which address the root causes of injustice and systemic inequalities. The West Africa Governance and Economic Sustainability in Extractive Areas (WAGES) project is an illustrative example. Launched in 2016, the stated objective of WAGES is to “support… inclusive sustainable economic development and poverty reduction… as well as accountable governance in three mining regions: the Sahel Region in Burkina Faso, the Western Region in Ghana, and the Préfecture de Boké in Guinea.” The methods by which WAGES seeks to reduce poverty are “strengthening local and national businesses,” “strengthening local skills training and employment services,” “conducting market assessments to identify ways to enhance procurement and supply linkages between the private sector and local businesses,” and “supporting knowledge-sharing on natural resources management through existing regional organizations and platforms.”

The Canadian government funded WAGES with $20 million given to an NGO called the World University Service of Canada, which jointly implemented the program with a second NGO called the Centre for International Studies and Cooperation. The Canadian government proudly touts that hundreds of people in Burkina Faso, Ghana, and Guinea were trained in “technical skills” which have given them new opportunities for “entrepreneurship” in the mining sector and allowed them to “develop new markets.” The government lists the following gains for the mining industry as steps toward economic justice and poverty reduction in West Africa:

[through WAGES] 51 business links established between private sector buyers, mining companies, and businesses and co-operatives helped seize economic opportunities for communities bordering mining companies… 500 young men and women were trained in entrepreneurship and business plan development [which] strengthened their capacity to create business opportunities with mining companies… 6 supported national forums in the 3 countries enabled the beneficiaries to expand their networks of partners and create new markets.

According to the Government of Canada website, the total budget of operational aid and development initiatives in all sixteen UN-recognized states within West Africa, be they hunger alleviation projects, skills training, or security collaboration, is just over $1 billion CAD (around $804 million USD). When one considers the fact that the corporate holdings of Canadian mining companies in Burkina Faso alone total $3 billion CAD (three times larger than all operational aid and development programs in the entirety of West Africa) the disparity is made dismayingly clear.

Since 2000, Canada has allocated $1.6 billion in humanitarian assistance for “promoting peace, security, and sustainable development” in Mali. One Canadian mining company operating in the country, the Vancouver-based B2Gold, drew $630 million in 2021, mostly from the Fekola mine in the southwest. This is the grave truth of Canada’s presence in Mali: the 2021 cash flow through one Canada-based mining company operating in Mali is equal to approximately 40 percent of all Canadian ‘humanitarian’ assistance to the country since 2000. It only takes a quick glance at these figures to realize that Canada’s investment in security, skills training, and poverty reduction in West Africa is infinitesimal compared to the annual profits that Canada-based mining companies extract from these forcibly liberalized postcolonial economies.

Despite touting the success of WAGES and other development initiatives in West Africa, the Government of Canada website acknowledges that the main problem currently facing Burkina Faso is “the increasing poverty of most of the population.” Any temporary gains which these programs make in combatting violence and poverty are vastly outweighed by the magnitude of resource wealth which Canadian mining companies extract from these countries—wealth which would have remained in African hands under statist models of the kind advocated by Burkinabé president Thomas Sankara before his murder at the hands of regional French actors, and Ghanian president Kwame Nkrumah before his removal in a CIA-backed coup.

The main problem with these development and aid initiatives is that they defer to the logic of capital, taking for granted that Canada-based mining companies should be allowed to operate freely in a neocolonial supply chain which values foreign business over Global South sovereignty. This is because Patnaik’s “means-based” approach is subjugated to the profit motive, which necessarily underdevelops West African countries in order to extract increasing amounts of wealth regardless of the programs’ stated intentions.

There is a simple way out of this cycle of underdevelopment which the capitalist “horizons of the thinkable” obfuscate. Patnaik dichotomizes means-based development with “rights-based” development, or the epistemology that the profit-driven means of global capitalism should not dictate the allocation and implementation of aid, but a rights-based approach which identifies the human rights which are being underserved in the affected regions (hunger, thirst, labour exploitation) and modifies the dominant economic system to meet those needs.

Rights-based development seeks to topple the capitalist logic of profit and center anti-imperialism and the need to assist in the creation of sovereign, autocentric economies across the Global South. Only then can the underdevelopment of means-based development aid be replaced by self-sufficiency which will benefit postcolonial countries far more than the IMF’s failed dictum that the private sector is the only viable engine for poverty reduction.

Owen Schalk is a writer based in Winnipeg. His areas of interest include post-colonialism and the human impact of the global neoliberal economy. Follow him on Twitter @OwenSchalk.


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