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August 2005 Colima, Mexico Since a little more than ten years, I deserve to be called an evangelical Christian. It’s easy to imagine what I’m up to on a Sunday morning. During my time in Auckland, I thoroughly enjoyed listening to some marvelous sermons from both national and international guest speakers at evangelical churches there. Anyway, now I reside in the boondocks, which is reflected by the quality of the evangelical churches there. During my first two years in Colima, Mexican friends of mine and I graced an outfit with our presence, whose senior pastor doesn’t have the foggiest clue what he talks about. When we got fed up with the rubbish being spread there we changed to an outfit, which is located exactly behind the soccer field of the ITESM campus.

Church on Lake Tekapo in New Zealand

By the way, I was quite fond of calling that sheila “la pinche naca”. You can rest assured that it’s not a compliment. There were presumably quite a few dear folks in the congregation who didn’t feel like jumping for joy when they heard me using the phrase “la pinche naca”. Never mind. I’m sure that Margaret Thatcher would tell me “Jurgen, now isn’t the time to go wobbly”.

Because we got fed up with “la pinche naca” as well, at least for the time being we grace an outfit with our presence that we may call an “evangelical start up” in Colima. Let’s wait and see how things are going to unfold there. Anyway, it’s time now to start with my sermon.

Foreign Aid

The New Zealand Business Roundtable published a while ago a policy backgrounder on Ireland’s economic transformation. That policy backgrounder zeroes in on key factors explaining Ireland’s economic growth. Among others, these key factors include attracting foreign direct investment and the low corporate tax rate as well as grants received from the European Union Structural Funds.

So far I haven’t blessed Ireland with my presence. And for at least the time being, I have no intention whatsoever of doing so. First, because of the weather there. Second, because it’s located in Europe. In my not so humble opinion, most of Europe suffers from constipation, in loads of respects. Anyway, there are in particular two Irish folks who make my eyes roll like a football. They’re Bono and Bob Geldolf.

The reason for my bias against them isn’t their singing. They can sing better than I can (which doesn’t tell you a bunch about their singing). They make my eyes roll like a football because they reckon that they’re called to save the less developed world. Instead of trying to save the less developed world with their simplistic concepts they may be better off sussing out the underlying reasons for Ireland’s economic transformation (to get a handle on the topic).

Why would it be a little over the top to claim that Bob’s and Bono’s concepts for saving the less developed world make me jump for joy? Their concepts boil down to doubling foreign aid and writing off debt. Why am I vigorously opposed to the concept of boosting foreign aid and writing off debt?

On average, during the past fifty years developed countries have funneled one hundred billion US dollars per decade just into Africa. It hasn’t amounted to plenty worth mentioning. Quite often, the more aid these basket cases received the more they went south. Thirty nine countries that received foreign aid from the World Bank between 1980 and 2002 enjoyed negative annual growth. That record tends to be even worse in sub–Saharan Africa. About half the countries there that received foreign aid enjoyed cratering per capita incomes. 

There appears to be a pattern. Developing countries that receive less aid do better than developing countries that receive loads of aid. China received between 1990 and 2002 twenty six US dollars per capita. China’s annual gross domestic product went north by a little more than two thousand five hundred US dollars per person. During the same period, Zambia received a little more than one thousand one hundred US dollars per capita. However, Zambia gross domestic product tanked by about one hundred forty US dollars per person. Do you reckon that it’s a coincidence?

To quote the International Policy Network:” Aid underpins structures and practices that often turn out to be a Klondike for kleptocrats. That is why we should treat with great concern the current push for massive icreases in aid”.

Douglas McWilliams, chief executive of the center for economics and business research, notes that “ending poverty will largely result from what countries do themselves – as the Chinese have shown”.
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Aidan Hartley

To put it a little more precisely, developing countries ought to open up their economies and trade with developed countries. When developed countries stop subsidizing their industries – agriculture may serve as an illustration in this context – they can no longer dump their products on the developing world. That dumping only contributes to making poor countries even poorer. When poor countries open up their economies to trade, trade will gradually result in a growing middle class. The growing middle class may be characterized as a precondition for the rule of law and property rights as well as (comparatively) good governance. At the same time, The Economist dropped the remark a while ago that foreign direct investment in the developing world reached its highest levels last year in more than a decade. China and Latin America have benefited in particular from that boom. Foreign direct investment often serves as approval or disapproval on the economic and political situation in the less developed world. Do you reckon it’s a coincidence that plenty of these activities are going on in Latin America and China? Do you reckon it’s a coincidence that there aren’t plenty of mergers, acquisitions and factories being built in the primarily African basket cases? In a nutshell, Bob and Bono – get a life.

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One of the magazines that yours truly almost religiously reads is The Spectator. I’m very fond of reading The Spectator because it tends to be refreshingly politically incorrect. You get no airy fairy waffle there. One of its contributors is Aidan Hartley. Aidan is British Kenyan and is building a farm in the highlands of Kenya.

Because almost nobody could be bothered to ask ordinary Africans about their opinion on foreign aid and the G8 summit, Aidan did. Here we go with a few of the responses Aidan received:

“Aid won’t help us. Our leaders will steal it”.

A Kenyan businessman responded:” It’s all about getting businesses in Africa started. But it’s not easy to do business in Kenya unless you know someone in high office”.

My favourite response to Aidan’s question “What do you think of Bob Geldorf”? was “I love Bob Marley very much”.

The following is a list of articles written by Jurgen for the magazine:

Some Thoughts On Living In Latin America ~ Enjoying A Latin Lifestyle
Working Around The Globe ~ Tips On How To Find Work Around The Globe
Living On The Edge ~ Bolts From The Blue
Living And Teaching In Colima, Mexico ~ A Place To Rest
Thoughts On South Africa And New Zealand ~ Hitchhiking And Economics
Some Thoughts On Literature And An International Lifestyle ~ Reading And Living
Some Thoughts On Africa And Latin America ~ Speaking From Experience
Some Thoughts On Debt Relief And Mining Investment ~ Economics Of Development
A Journey To Various Places In Mexico - Places To See
Memories Of Africa ~ Namibia, Botswana and Zimbabwe
A Long Way From Munster To Colima - Travel And The Self
Some Thoughts On Capitalism And Investing - In 2004
Canada From Various Perspectives ~ Montreal, Vancover And More
A Critical Look At South Africa - Politics And Economics
Emerging Markets and Economic Geography - Economic Growth Around The World
A Meaningful Life Or A Turkey On The Ground - Favorite Places To Live
Some Thoughts On Living In The Less Developed World ~ Emerging Markets
Places To Do Business In Europe - Where To Invest In Europe

To contact Jurgen Click Here
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