The Burmese Tragedy

Foreign Hindrance, Not Aid

Even before being devastated by a killer cyclone on May 2, Burma was one of the world’s poorest countries.  Renamed Myanmar by a military junta, Burma is also one of the most oppressed countries.  In terms of brutality, cruelty, and venality, her government is in a league with North Korea.  It comes as no surprise, then, that sending foreign aid to Burma has the potential of doing more harm than good.

Over the last 60 years, trillions of dollars have been transferred from poor people in rich countries to rich people in poor countries in the name of promoting development.  Through much of that period, many aid recipients actually lost ground economically.  However, assorted presidents, cabinet ministers, managers, and other apparatchiks grew rich.  Africa, for instance, gained a distinct new class: the Wabenzi, or men of the Mercedes-Benz.

Over the years, even the U.S. Agency for International Development, World Bank, International Monetary Fund, and other aid agencies have been forced to admit that the vast bulk of their munificent transfers generated no economic growth and encouraged no market reforms.  The conclusions of outside analysts, led by the pioneering British economist P.T. Bauer, have been more damning.  Bauer’s studies showed that, by pouring vast sums of money into many of the world’s worst governments, foreign aid has subsidized both socialism and...

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