Book Review: Aid as Obstacle

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Book Review: Aid as Obstacle

by Connie Phillips & Sue Tafler

‘Science for the People’ Vol. 13, No. 2, March-April 1981, p. 40 — 43

Sue Tafler and Connie Phillips are long-time members of SftP and helped start the Food and Nutrition Group in the early ’70’s. They recently co-authored and published Feed, Need, Greed, a high school curriculum on population resources and hunger (available from the SftP office for $5.00). 


by Joseph Collins, David Kinley and Frances Moore Lappe 

Institute for Food and Development Policy 

2588 Mission St. San Francisco, CA $4.95 (paperback) 

Aid as Obstacle: Twenty Questions about our Foreign Aid and the Hungry1 is the latest book published by the Institute for Food and Development Policy2 (IFDP). IFDP does much-needed research into issues of world food systems. They reach out to educate people who are concerned about hunger but who generally do not see hunger in its political framework. IFDP’s earlier book was Food First: Beyond the Myth of Scarcity3, first published in 1977 (see our review in Science for the People, Vol. IX #6, Nov. 1977). Food First attacked the myths that hunger and poverty are caused by overpopulation, scarcity of agricultural resources and lack of modern technology. Aid as Obstacle goes one step further and indicts foreign aid for its role in maintaining the power relationships which perpetuate poverty. 

The image of the U.S. as the generous savior of the world’s poor is presented by the U.S. government as a major aspect of its foreign policy. Many well-meaning people who are genuinely concerned with world hunger accept this image with pride. The U.S. as benefactor of the world’s poor is a myth that the book dispels. 

Aid as Obstacle is a welcome book which extensively documents the bitter reality of actions taken in the name of the world’s poor. Foreign aid is hurting the very people it claims to help. The book explains why foreign aid fails and actually increases poverty. The authors call for a stop to all foreign aid to all countries where a narrowly based elite controls the economic system. 

The authors use a question-and-answer format in Aid as Obstacle as they do in many IFDP publications. While this style was successful in Food First, it seemed somewhat contrived and strained in Aid as Obstacle. Some of the questions seemed obvious: for example, Question 14 asks: “What happens when food aid goes to a country where the majority of the people are hungry?” 4 After one hundred pages of reading that aid contributes to rather than alleviates poverty, it seems naive that a reader would be asking that question at that point. Each chapter (or answer to a question) does end with a good summary of its particular point in case the figures and details are overwhelming. 

The most informative section of the book was eighteen pages entitled “A Primer: Some Essential Facts About the Aid Establishment”, appearing at the end as an appendix. We found these essential facts concise, easy-to-read and quite fascinating. The Primer would be the most valuable section for anyone who wants to pick up the book for only a short period of time. The book ends with a resource list of periodicals and support groups which would be useful for potential activists. 

We found Aid as Obstacle to be an excellent resource and reference book, but have a few objections. Its numerous detailed examples are overwhelming at times. With so many bits and pieces of information it was hard to keep the larger picture in mind while reading. We felt that some examples were repeated excessively to strengthen points. In addition, there is no index, a major drawback to using the book as reference. Since Aid as Obstacle fragments its coverage of any one country, maybe in a revision or reprinting the authors will include an index by country, by agency and by types of projects. 

Government And Agency Aid: How It Fails 

Aid as Obstacle discusses how many of the top ten countries receiving bilateral5 economic assistance from the US are particularly well-known for their neglect of the needs of the poor. (See chart) These countries include: Indonesia, Bangladesh, the Philippines and Pakistan. These same countries are also known for their repression of those working for social change. The top ten recipients of World Bank aid include: Indonesia, Brazil, South Korea, the Philippines, Colombia and Mexico. The major effect of aid to these countries is to increase the prosperity of the elites and to prop up regimes that might otherwise fall. The recent resumption of both economic and military aid to El Salvador is a perfect example of the kind of government that the US supports. 

The authors emphasize the effects of aid to Bangladesh. We appreciated being given the facts behind the myths carried over from the extensive media coverage given to the famines there. The book confirms that the country has exceptional agricultural potential while half the population is underfed.6 As much money goes to “security” (police, defense, etc.) as to helping the poor. The results of the electrification and tubewell projects have been to benefit the larger commercial growers. Improving the rural roads helps the government move troops more easily to maintain control.7 While the U.S. recognized Bangladesh as a human rights violator (in 1977), PL480 (Food for Peace) money made Bangladesh the fourth largest recipient of U.S. food aid.8 (See chart)

As the book makes clear, not all aid to developing countries comes from bilateral (U.S. government) agencies per se. The multilateral9 agencies include the World Bank, the International Monetary Fund (IMF) and various organizations within the U.N. These agencies are no more neutral than agencies controlled directly by the U.S. government. The multilateral agencies are free to be less responsive to any limitations imposed by the U.S. public or Congress. The World Bank and the IMF frequently step in to replace U.S. bilateral aid in those countries which have gotten too politically touchy for the U.S. to admit supporting. Multilateral agencies are well known for rewarding countries which create a climate favorable to the interests of multinational corporations. 

U.S. AID loans the Latin American Agribusiness Development Corporation (LAAD) millions of dollars a year at only 3-4% interest rate. LAAD helps set up small agribusiness companies in Latin American countries. Helping the economy of a country in general does not help the people at the bottom, as the “trickle-down” theory purports. LAAD projects include processing and marketing beef, growing and exporting fresh and frozen vegetables, wood products, seafood, cut flowers, tropical plants and other specialty items.10 The book demolishes for good the notion that increasing the productivity in a region helps the poor and hungry who may live in that region. 

Even the aid agencies now admit that “trickle-down” hasn’t worked. Recently, U.S. AID guidelines (which actually apply to only a small portion of aid) claim to be working in “new directions” to serve “basic needs”. Their modern rhetoric would almost sound as if aid agencies have reformed, but Aid As Obstacle documents how empty are their claims of new attention to the small farmers, land reform, etc. Since the IMF has been “helping” Peru with assistance, bread prices have increased 1000% and infant mortality has increased 30%.11 When the World Bank funded 3,000 tubewells to increase rice production in Bangladesh, it claimed that each well would serve 25-50 farmers. While the World Bank still maintains that this project is a success, Aid As Obstacle documents its failure due to the exclusive control of each tubewell by one rich man who charges for the water his neighbors use in irrigation. “Such a project actually undercuts those it is supposed to help by enriching their economic enemies.”12

The Top 10 recipients of U.S. Economic and Military Aid As Well as World Bank Economic Aid. 

U.S. Bilateral Economic Assistance (FY 1980)  U.S. Military Assistance (Fiscal Year 1981) World Bank economic Assistance (FY 1979)
1-Egypt  Israel India*
2-lsrael  Egypt Indonesia*
3-lndia*  Turkey Brazil
4-Indonesia* Greece Mexico
5-Bangladesh* South Korea Korea, Republic of
6-Turkey Spain Philippines
7-Portugal Philippines Morocco
8-Pakistan* Portugal Egypt
 9-Philippines  Jordan  Turkey
 10-Syria  Thailand  Colombia
%Of Total Received by 10 Top recipients                51% 90% 56.3%

* = “low-income” by World Bank definition. 

Adapted from Tables 1,2 and 3, Aid as Obstacle 

Strings Attached 

Most Americans forget that aid is never a gift. Aid as Obstacle illustrates the frequency of aid which requires the expenditure of counterpart funds by the recipient countries to match the incoming money. The book also taught us about tied aid, whereby the aid money must be used to buy commodities from corporations in the donor country. Most aid is in the form of loans, most of which are interest-bearing. Once the recipient governments use the aid money to buy U.S. food, the food is then sold and mostly distributed in urban rather than rural markets. Development loans must be paid back in foreign currency even if the project fails. This requires cash crops for foreign exchange and also puts an increased tax burden on the farmer. 

Aid As Obstacle goes into the many forms of non-aid agencies which exist in the U.S. and worldwide. These agencies offer support through economic channels as well as military assistance and sales. An example is the Ex-Im bank (ExportImport), a U.S. federal agency which loans money to governments and businesses which purchase U.S. manufactured goods. Ex-Im’s largest funding supports nuclear power, aircraft and mining, hardly basic necessities for the poor. Some of the largest beneficiaries of Ex-Im bank operations to date are Boeing, Westinghouse, G.E., General Motors and Chrysler. Ex-Im’s loans, guarantees and insurance to the South Africa apartheid regime exceeded $32 million in FY 1978 despite enormous attempts by human rights groups to amend Ex-Im’s authorizing legislation.13

Positive Trends 

Aid as Obstacle discusses two countries where increased productivity is being organized by the people who both do the work and receive the benefits. Since the overthrow of Somoza, Nicaraguan peasants have decided how the land will be controlled and how marketing will be reorganized. Another example is Mozambique where there has been a gradual reorganization by cooperative villages directed by a village-to-national decision-making process. These are countries aiming for self-sufficiency and control which we should study to learn of their setbacks and successes.14

The book ends with a brief review of non-governmental voluntary organizations. We knew about CARE ties with U.S. AID but the active presence of the Catholic Relief Services in Pinochet’s Chile was new to us. Oxfam-America, World Neighbors, the Mennonite Central Committee, and the Economic Development Bureau are groups which refuse government funds. They were groups chosen by the authors as examples of organizations doing progressive work. 

Also offered is a check-list of ten questions to help the reader decide whether or not to support an international charity. They share some of the questions they themselves ask: (A) – Does the project first address the underlying social economic and political constraints that stand in the way of solving the physical or technical problems? (B) – Whose project is it? Is it the donor agency’s or does it originate with the people involved? (C) – Does the project strengthen the economic and political position of a certain group, or does it generate a shift in power to the powerless? and (D) – Does the project generate a process of democratic decision making and a thrust toward self-reliance that can carry over to future projects?15

A key emphasis of Aid as Obstacle is to expose power relationships and the authors encourage their readers to educate themselves. They make a strong call for taking action, for assuming responsibility for the economic system and for working for change. They propose that the U.S. halt all foreign aid and support for repressive, elite regimes, but leave unsaid how U.S. citizens are to accomplish this. In encouraging activism, they recommend their own book “What Can We Do?16, which contains fifteen case studies in interview format. 

Throughout the book, Lappe, Collins and Kinley never once refer to the current system as capitalism or imperialism, yet they call for an end to the “anti-democratic economic system”.17 The authors bend over backwards to avoid terminology while their whole approach is anti-capitalist and anti-imperialist. 

There are pros and cons in using political terminology. We feel that it is a weakness of Aid as Obstacle that it fails to educate its readers that aid is an integral part of a capitalist and imperialist system. Aid as Obstacle seems to advocate socialism without ever once using the word. They talk about the need for collective decision-making by indigenous groups, involving people in the historical struggle for power, and focusing on the roots of social problems. Their avoidance of the word socialism is consistent with their position described in What Can We Do? that there are no blueprints they can offer. In describing any successes in development or feeding people, they emphasize that these are not models but rather lessons to be learned or visions to inspire. 

The authors say that the book focuses on the iceberg and not the tip.18 We agree that the book successfully exposes the U.S. aid program as the perpetuator of poverty and not the beneficient benefactor it is believed by many to be. However, we would have liked a stronger political message. 

>> Back to Vol. 13, No. 2 <<


  1. Lappe, Frances Moore, Joseph Collins and David Kinley, Aid as Obstacle: Twenty Questions about our Foreign Aid and the Hungry, Institute for Food and Development Policy, 1980 (200 pp., $4.95 paperback; discounts for more than 6 copies).
  2. Institute for Food and Development Policy (IFDP), 2588 Mission St., San Francisco, CA 94110. Write them for more information and for their list of publications.
  3. Lappe, Frances Moore, Joseph Collins with Cary Fowler, Food First: Beyond the Myth of Scarcity, Houghton-Mifflin, Boston, 1977; revised and updated, Ballantine paperback, 1978.
  4. Aid as Obstacle, p. 107.
  5. Bilateral aid refers to transfers of goods or services from one government to another, as either grants or loans. US AID, Food Aid (PL 480 or Food for Peace) and the Peace Corps are examples.
  6. Aid as Obstacle. p. 21. 
  7. Ibid, p. 39. 
  8. Ibid, p. 105-107.
  9. Multilateral aid is a transfer of goods or services from one government to another through an intermediary organization (controlled at least nominally by more than one government).
  10. Aid as Obstacle, p. 67.
  11. Ibid, p. 127.
  12. Ibid, p. 59.
  13.  lbid. p. 128.
  14. Ibid, p. 78.
  15. Ibid, p. 139.
  16.  Valentine, William and F.M. Lappe, What Can We Do? (Food and Hunger: How You can Make a Difference), Institute for Food and Development Policy, 1980 (60 pp., $2.45 paperback; discount for seven or more copies).
  17. What Can We Do?, p. 43.
  18. Aid as Obstacle, p. 121.