April 10, 2009
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Trillion-Dollar-Plus Foreign Aid To Help Global Economy: Is It in Vain? - By Rauf Naqishbendi

Is this a bold economic experiment or just madness? Never in the history of mankind has so much money has been spent so fast. The Federal Reserve Bank is working overtime  printing money as if it is inconsequential, while the Treasury Department is borrowing money at an unprecedented rate as if never has to be paid it back. And it is not just the United States -  the entire world appears to be going mad.  Spending billions of dollars daily now seems like small change as the government spends trillions on bailout and economic packages. As if that were not enough, now there is this: last week the G-20 summit in London assented, as a goodwill gesture toward global economic recovery, to set aside over a trillion dollar in low-interest loans through the International Monetary Fund to help third world and underdeveloped countries.

This massive economic assistance package is done with good intentions but poor execution. It benefits dictators around the world without, apparently, helping  those who are in need. They call it a loan, but it is free money. It is spending good money after bad,  for none of the governments in question have the means to repay these new loans. They have practically defaulted on their old loans while some are asking for debt forgiveness.

Just recall that, during the decades of the 80s and the 90s, the US secured guaranteed loans tantamount to more than half a trillion dollars to Turkey through the IMF.  Yes, they were guaranteed but the Turks haven’t been able to pay their mortgages. Instead they had negative amortization.  Nevertheless, it is still recorded as a “good loan” on our government’s book.  What did the Turks use that money for? Most of it went to fight the Kurdish Workers Party(PKK). Kurds have been struggling for cultural freedom and a democratic system in Turkey while Turks brutally fought to maintain the Kurds lack of freedom.  They went so far as to outlaw the Kurdish languages. They demonized Kurds to the extent that they forbid them  from speaking in their mother tongue.

Turkey lived as a welfare state on US handouts without even honoring the human rights of Kurds, who constitute one-third of the population.  Kurdish population did not benefit from the immense US foreign aid. It was financial assistance delivered  without any humanitarian preconditions attached. This is how foreign aid works. Moreover, Turkey will be a beneficiary of this new trillion dollar IMF aid. It is ironic to call it the International Monetary Fund. Make no mistake - most of that money comes from the American taxpayers. Turkey is only the latest example.  The list of recipients of past IMF money includes a lengthy list of countries including Russia, Brazil, Poland, the Philippines and Argentina,  to name just a few.

Consider another example:  US monetary and humanitarian assistance has been earmarked for Palestinians for decades.  Yet it has made little or no difference.  Yasser Arafat pocketed the aid and left Palestinians destitute - refugees in their own homeland. Iraq is another example. Since its liberation from Saddam’s regime, the US has contributed billions of dollars to rebuilding Iraq. I went to Iraq visiting my family in Kurdistan. I was outraged as what has happened not only to the proceed from selling oil, but also US’s aid to Iraq. There has been precious little improvement in the lives of the Iraqi people. So how do we account for all that money?  If you ask the Iraqi people, they tell you outright that Iraqi leaders Kurds and Arabs have gotten rich, while the Iraqi people themselves are struggling to make ends meet.

It is a benevolent idea to reach out to people who are in need. But it must be recognized that the most devastating fact of life in countries plagued with poverty is the authoritarian regimes that rule these countries. The foreign aid that reaches the truly needy people in these nations will be trivial in the wake of incompetent or dictatorial ruling. The irony is that tens of millions of Americans are experiencing financial hardships, yet little has been done to ease their difficulties. At the same time, our government, in vain, pours out  trillions of dollars to help others. 

Another problem with foreign aid is the lack of any human rights strings attached to the aid as cited above in Turkey’s case. Even though the IMF often sets conditions, none has been seriously verified or enforced. President Obama should interrupt our longstanding aid to Turkey without some consideration of the human rights issue in that country.  That should be a bottom line issue for all foreign aid considerations. He has already made some strides regarding this issue.  During his recent visit to Turkey, Obama insisted on Turkey’s decent treatment of its Kurdish population. But at the same time human needs are immense in most part of the world.  Aid to underdeveloped countries should not be channeled through the corrupt leaders of these countries. It makes no more sense than allowing corporate CEOs to receive billions in bonuses as rewards for their failures.

Rauf Naqishbendi's memoirs entitled "The
Garden Of The Poets", recently published. You
may order The Garden Of The Poets (unedited)


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