African History 7.4 The Role of International Aid

We wish we could say that international financial aid always came from altruistic motivations… but would you believe us? Didn’t think so.

LanguageEnglish Language
World HistoryAfrican History

Transcript

00:17

Of course, things might be a little less complicated now than they were during the Cold War.

00:21

Back then, aid almost always came with a bundle of expectations for a government to support

00:26

the United States or the Soviet Union.

00:29

If an African state tried to go back on whatever promises they made to their super powered

00:33

benefactors, there’d be the devil to pay. [Man with devil horns knocking on Africa's door]

00:35

These days, things are little bit less ideological.

00:38

A lot of times, Western governments give aid in the form of debt forgiveness. [Government hands over 'certificate of debt forgiveness' to Africa]

00:42

This is when Western countries pay back African debts to Western central banks.

00:47

This helps African countries dial down their debt-to-GDP ratio, which makes all those neoliberalist

00:51

investors text happy emoticons to everyone they know. [Phone with smiley emotes appearing on the screen]

00:56

Other countries are a little pushier.

00:57

We’re lookin’ at you China and Iran.

00:59

When these countries send aid to Africa, there are definite strings attached.

01:04

Like the expectation that Iranian and Chinese companies be allowed to build factories there on favorable terms. [Big factories producing smoke]

01:10

Most people know that a bunch of foreign aid is pumped into Africa every year.

01:13

But it’s not quite as much as we might think.

01:15

Roughly 100 billion bucks come from the West…

01:18

About 150 billion from China…

01:20

And around 20 billion from other countries in the Middle East and Asia.

01:23

And yeah, all those billions sound like a lot, but it only makes up about 13% of Africa's

01:27

total GDP, which is actually 2 trillion dollars.

01:30

Of course, that’s an important 13%.

01:33

Imagine living with 13% less allowance.

01:36

That might mean nixing Friday night’s movie marathon at the local cinema… [Man with empty wallet walks away from the Theater]

01:39

Or even having to buy the iPhone 5 when all of your friends have the iPhone 97….that's

01:43

the generation they're on now, right?

01:45

Admittedly, this would not be cool.

01:47

But imagine if cutting 13% slashed stuff like basic health services and maintaining roads

01:51

and power grids.

01:53

Without that 13%, the developing nations of Africa might develop a lot slower. [Africa in a baby cot]

01:58

The United Nations also has skin in the aid game.

02:00

The UN founded the International Monetary Fund, an agency that provides low-interest

02:06

loans to developing governments.

02:08

However, the IMF can get a little pushy.

02:11

Much like the Lannisters, once you take the IMF's money, you're in its pocket.

02:15

The IMF has come under fire for strong-arming its borrowers into adopting neoliberal reforms.

02:21

And sometimes these reforms hurt a lot of people in the indebted country. ['Reform hammer' bashes governments into the ground]

02:24

In Tanzania, for example, the water supply of the Dar es Salaam region

02:29

was privatized and sold to a German company.

02:32

What did the Germans do with that precious substance that’s absolutely necessary for

02:36

life?

02:37

Well they jacked up the prices, that's what.

02:38

Which made the IMF eerily similar to the villain of a recent Bond movie… [Man with metal teeth]

02:42

So, yup, aid and loans from richer countries can definitely help developing African states

02:47

But a lot of Africans are mega-suspicious of the agendas of foreign countries and organizations.

02:53

Word to the wise: when an ice cream flavor gets this complicated, you never know what

02:56

might be lurking in the mix. [Cockroach crawling around in ice cream]