Source: Wikipedia Commons, MC MasterChef
No one would deny that humanitarian aid is, overall, a well meaning endeavor that is intended to reduce human suffering. However, as is explained in Poverty Inc., there is a point at which aid becomes a crutch that stifles domestic development and growth. In the same way that an astronauts muscles will atrophy from not being used in microgravity, domestic production falls apart because foreign aid takes over the role it is supposed to fill, and so it has no use. This shows the importance of minimizing regulation and interventionalist policies. Foreign aid is a way to subject impoverished people to the leftovers from large businesses in first world countries, which as previously stated prevents their domestic growth. It is a vicious cycle that perpetuates itself by demolishing the domestic capacity for growth so that more aid may be foisted upon the country in question.
A large portion of Poverty Inc. is focused on the impact of foreign aid and trade policies implemented on Haiti, as well as many African countries, that stifle their domestic development by snuffing out the spark of competition. Competition is what breeds development, for it is the need to compete with an established competitor that forces new competitors to create an edge, or in other words push the development of an industry. This is evident within our society, proven by companies like Ford who pushed the development of the auto industry in order to produce automobiles faster and at a cheaper price than competitors. Foreign aid essentially completely incapacitates local competitors by providing goods at little to no cost. This is well and good when the local competitors are unable to produce in the wake of a disaster or hardships, but without placing any sort of restrictions on this incoming aid it introduces a competitor that cannot be competed with once these domestic businesses are trying to reestablish themselves. Poverty Inc. points to the influx of foreign rice in Haiti that was spearheaded by extremely low tariffs on importing American rice into the country. Because the American industry had such efficient rice production and could import it into Haiti for such a cheap price, local farmers were unable to compete. Furthermore, the flood of free goods, including rice, from NGOs further crippled the local economy.
None of this would necessarily be a problem long term if it would simply cease. First world countries are acting as the overprotective parents of third world countries, doing everything for them and preventing them from growing on their own through experience, making them appear hapless and uneducated. The system is a self-perpetuating one, in which foreign aid continues to stamp out the natural competitive environment of the country receiving the aid, in turn making it appear as though that country is still in need of more aid. Foreign NGOs see the conditions that the people who live in developing countries are exposed to and believe that they must save them from their suffering. Yet, many of them are blind to the fact that they are subjecting the people they are trying to lift out of poverty to communist-like conditions that weigh them down. The providers of aid in essence act as the government, controlling the distribution of goods and therefore controlling the distribution of wealth. Because of the manner in which they distribute aid, providing developing countries with their excess or unwanted goods, or by getting subsidies from the government they are able to monopolize that which they are providing. This is only possible because of government intervention, which funds many NGOs and provides the subsidies that enable goods to flow into the developing countries that are given away for a fraction of what they are worth or even for free.
The solution is to force developed countries to provide only a set amount of aid based on the severity and size of the disaster which invokes the need to aid to be provided in the first place. A large earthquake devastates Haiti? Begin providing them aid immediately while the severity and breadth of the earthquakes damage is assessed. Determine that Haiti should receive “x” amount of food, medical aid, and funding and provide it to them in a gradually reducing capacity. It should never become a complete dependency and should instead serve as a supplement to keep the country from totally collapsing in the wake of disaster. Aid should be treated as medication; it should be readily applied when the need arises and then the patient should be weaned off as they heal and regain the ability to function without it.
