For once, bite the hand that feeds you

There is a local electronics store which advertises widely the message: "If we don't have it, you get it free!" To which, on seeing the advertisement, I mentally pose the question, if they don't have it, how can they give it to me free? Such is the trivia that passes through my mind when stuck in traffic.

I was reminded of this when I learnt that the World Bank was going to shovel an initial $1.2 billion (Dh4.4 billion) at poor countries to enable them to buy food.

This would be in the form of grants and loans, and the precursor to much more to follow. Apparently noblesse oblige, but there's nothing particularly honourable or obliging about the offer. It is more than likely to make a bad thing worse.

Shovelling money at the poor countries to enable them to buy food is a very shortsighted policy. What's the point of sending money for food when there is no food to buy? Or, if there is, it is prohibitively expensive. What purpose will yet more loans to an already overstretched economy achieve?

How much better, therefore, that instead of money - creating further debt - it is food that is sent. Food such as rice, maize and other products the impoverished people of these nations do actually eat, rather than the MRE's (meals ready to eat) and chocolate bars that are often sent in the misguided belief that they will suffice.

There is also the issue of the grant, or loan. Most of these nations are already crippled by the debt that has accumulated from past loans, taken in feverish attempts at improving conditions for the people.

Having been encouraged by the World Bank and the International Monetary Fund to produce cash crops for export and foreign exchange purposes, there then followed a crash in the very type of produce they were advised to grow.

Beneficial

Tobacco was always touted as being a beneficial cash crop for emerging or developing nations, and it was. That is, until a decade or more ago, when tobacco sales started to dip because of the worldwide decline in sales due to health campaigns and public aversion to the product.

This encouraged tobacco companies to seek new business in the very Third World countries the raw material was grown, thereby increasing indebtedness by the country and ending the ability of the country to be self-sustaining in agricultural products.

So, the World Bank and IMF, unsurprisingly, believe every problem can be resolved by tossing more money in the direction of old loans. Yet such thinking is not a solution and will ensure further and increased borrowings which will take even longer to repay.

Many are the developing countries that have more than repaid the original debt, only to find they have to continue repaying as interest on the capital amount borrowed has far exceeded the initial sum borrowed.

If it happened to you or me, we would have to declare insolvency and hope for forgiveness from our lenders. But with a country, there is no such luck. In most cases the debt hangs over the nation like the sword of Damocles and an albatross around the neck.

It is said a rich man can afford to pay for his mistakes. In a similar fashion, so can a rich government or rich nation. They can afford to donate large amounts of cash as a loan to a worthy cause, in the sure knowledge that over the coming decades, the sum will be repaid many times over, either through cash or kind.

For example, quite often money "lent" to nations for relief or major development work is repaid, as a condition of the loan, by reciprocal orders for the equipment and raw materials needed for the project.

asts by foreign ministers and trade secretaries about the largesse dispensed by their government are usually as empty as the stomachs of the starving people in developing countries.

There is no greater truism than the expression "the rich get richer and the poor get poorer" yet there is no closing of the gap between the rich and poor. There even seems very little concern by the rich for the poor.

It is a sad reflection upon society that we are little better off than the mankind of 10,000 years ago when, as hunter-gatherers, we cared only for our immediate surroundings and not those people on the other side of the hill.