AN INTERESTING event made headlines in the international press a couple of weeks ago when Beijing announced that it was sanctioning $9 billion of aid to modernise Nigeria’s railway network. The reason it was so intriguing was that the World Bank was already engaged in negotiations with the Nigerian government for a $5-million loan to reform the country’s ‘corrupt and inefficient’ railways. In exchange for this loan, the bank, in line with its agenda to push privatisation, was asking the Nigerian government to allow private companies to enter the railway sector and ‘clean up’ the mess. Without warning (although the Nigerian government must have been in secret negotiations with China over this), Beijing not only announced its decision to give Nigeria an exponentially higher sum of money ($9 billion) for the same purpose, it also announced that this was a ‘no bids, no conditions, and no need to reform’ act of
   philanthropy.
   What is even more intriguing is that Nigeria’s is not an isolated case.
   China’s largesse to African nations has boomed in recent years from $700 million a year in 2003 to nearly $3 billion a year in 2005 and 2006. In Indonesia, the Chinese government is helping to advance the country’s electrical grid network by bankrolling a number of Chinese-built power plants, and in the Philippines, the Asian Development Bank’s plans to finance a new aqueduct with a series of soft loans has been scuppered by China’s willingness to finance the project at a lower interest rate, faster disbursement and fewer questions asked.
   In an article published in the International Herald Tribune (February 15, 2007), Moisés Naím, editor of the Foreign Policy magazine, questions the possible motives behind the growing pot of aid and loans that new economic powerhouses like China, Venezuela and Iran are making available to the third world as of the past few years.
   A study by the Centre of Economic Investigations, an economic think-tank in Caracas, notes that Venezuelan president, Hugo Chávez, ‘has spent more than $25 billion abroad since taking office in 1999, about $3.6 billion a year’. Over 30 countries, some of them as distant as Indonesia are beneficiaries of Chávez’s generosity. Last year the Chávez regime also purchased $2.5 billion of Argentina’s debt with the International Monetary Fund, allowing Argentina to repay its full debt with the IMF and end nearly three decades of Washington’s economic meddling that has worsened the abject poverty of the resource-rich Argentina.
   Sitting on the biggest oil reserves outside of the Middle East, Chávez has also been criticised by the West for throwing a lifeline to Fidel Castro’s regime in Cuba by supplying nearly 100,000 barrels of subsidised oil a day - a deal Cuba repays with doctors and other services. Analysts say that modern-day Venezuela’s aid and grants to Cuba is almost at par with that of the Soviet Union.
   Indeed even the poor of the first world have been beneficiaries of what is being described as Caracas’ ‘oil diplomacy’, as Chávez is providing heating fuel as aid to poor families in Maine to Philadelphia in the US, and recently agreed to subsidise oil sales for the city of London in exchange for the city’s mayor Ken Livinston’s promise that he would use the savings to subsidise bus travel for the city’s needy.
   ‘The savings [for the city of London] - which would cut fuel costs by 20 percent…and could amount to about $32 million - are to be directed toward cheaper bus travel for up to 250,000 Londoners living on income support. Those who qualify will get a half-price discount on bus fares,’ reported the UK’s Guardian newspaper on February 21.
   Meanwhile, the new Iranian regime is reportedly continuing its aid to Hezbollah in Lebanon and to Hamas in Palestine.
   The question that naturally arises out of these new trends in foreign aid is: What might possess the governments of China and Venezuela — countries struggling with poverty — to offer such largesse across the world, even to countries more prosperous than their own?
   Venezuela’s ambassador to Nicaragua, explaining his country’s large aid packages in the region, announced recently, ‘We want to infect Latin America with our model.’ Fuel-hungry China is looking to expand its influence with Nigeria whose proven oil reserves stood at 36 billion barrels in a 2005 estimate. China’s economy is expected to grow at a whopping 8 per cent until 2010, and in order to sustain that growth the government needs to secure a steady supply of fuel, be it from Nigeria or Indonesia or both. China’s central bank is also sitting on the largest foreign exchange reserve in the world right now, approximately $1.06 trillion, and Beijing wants to use this excess liquidity to advance its geopolitical interests across the world, propping up friendly regimes, no matter how dictatorial, and copy-cat economies, no matter how inefficient.
   The writer of the IHT article, Moisés Naím, has termed it as ‘rogue aid’.
   According to Naim, Venezuela’s aid to Cuba has ‘dashed hopes for Cuba’s opening as a result of Fidel Castro’s demise and the island’s bankruptcy [and] Cubans will be forced to wait even longer for the reforms that will bring opportunities for prosperity and freedom’. He draws the examples of Iran’s support of Hezbollah and Hamas and Saudi Arabia’s support of Islamic schools in Pakistan to show such aid could be reshaping the world ‘into a place very unlike the one where we want to live’.
   ‘The goal of these donors is not to help other countries develop…rather, they seek to further their own national interests, advance an ideological agenda or even line their own pockets. Rogue aid providers couldn’t care less about the long-term well-being of the population of the countries they aid,’ writes Naim. ‘In place of those programs, rogue donors offer to underwrite a world that is more corrupt, chaotic and authoritarian. That sort of aid is in no one’s interest, except the rogues,’ he adds.
   For those of us who live in a country which has for decades had to rely on foreign aid to finance balance of payments and budget deficits, the question that really needs to be asked is: Was foreign aid — no matter whether it came from the US or Europe or China — ever different in nature?
   At no time in modern history have loans and aid been proferred more generously as the era which was characterised by the height of the Cold War. As one country after another in Asia’s south and far east either braced Soviet-style or China-style socialist or communist economic systems, 50 per cent of all US aid (loans and grants) were going to countries like South Korea, Vietnam and Thailand, India, Pakistan and Iran to resist the ‘red wave’. In 1952 when the US noted rising Soviet penetration in Europe, $13.3 billion went to countries in eastern European states to prevent them from switching allegiance to the USSR. So apprehensive was the US that the Soviets would find a foothold in their backyard – Latin America, that it, along with the World Bank — which has traditionally served US geopolitical interests — lent heavily to Latin American governments, pushing the region’s external debt from $12.6 billion in 1960 to $28.9 billion in 1970, a 230 per cent increase in a decade.
   And there was no pretence in the way this was done. A US National Security Council memo from 1965 reads: ‘US-AID [the US government’s aid agency] should be used as a political weapon with major assistance going to African friends of the US.’
   And the battle for influence was a three-way fight which included China’s struggle with the Soviets to support and establish Beijing friendly regimes across the world. In 1965, during the US war in Vietnam, while Moscow was funding Hanoi’s purchases of armaments to fight the South Vietnamese funded by the US, Beijing offered Hanoi a massive $1.6 billion loans if it agreed to abandon all ties with Moscow.
   Much of the weapons used in Angola’s civil war — which cost over 500,000 lives and is the longest running civil war in African history — were bought with rival funds that the US and Soviets made available to the rival warring factions. While the Soviets gave the MPLA faction loans to buy weapons, their enemies, the FNLA and UNITA rebels, were bankrolled by the US government.
   Perhaps one of the most tragic examples of how Western aid — used to advance its geopolitical interests — resulted in the loss of hundreds of thousands of lives is borne out by the Saddam-era Iraq. Saddam Hussein was lent over a $100 billion by the US through proxy loans channelled through the Arab states to support his invasion of Iran. While the Europeans lent to Saddam’s government in order to bankroll his purchase of weapons from Europeans manufacturers, the US had specific geopolitical interests in mind when it secretly channelled hundreds of millions of dollars from the US Department of Agriculture to finance Iraq’s secret rearming, in order to gain leverage for the rescue of fifty or so US hostages that Iran was holding from the
   revolution that overthrew the Shah.
   The point I am trying to make with these facts (and they are all published facts) is that geopolitical interests are at the heart and the very origins of every aid, grant or loan that masquerades as philanthropy in the pages of our newspapers and the statistics of embassies of the donor countries. Be it China, the US, or even countries of the EU, the ultimate objective is not necessarily to help the poor of the destination country (although this can occur as a side effect) but to force through ideologies and economic policies that are in the best interests of the donor country. In that sense, all aid is rogue aid.
   mahtabhaider@gmail.com