The World Bank working paper named ‘Elite Capture of Foreign Aid – Evidence from Offshore Bank Accounts’, which was finally released yesterday is a devastating read. Not because of the facts in it, but because of the extent of the misuse and theft of aid money. The World Bank are now proving by small samples how much of their loans, grants and funds, which is given by donors to the WB, which happens to be moved to tax havens by the regimes that needs it. That is eating of the plate of the poorest and living lavish on others people’s dime.
Just in the Annex, the truth really comes forward, where it is only a small samples, but showing the distasteful enterprise still. Like from table one. You can see that a certain amount of African countries have taken out huge funds into havens deposits and non-haven deposits.
The report explains this about the table one: “The table shows the 22 countries in our main sample and presents summary statistics for the main variables in our analysis. The sample includes all countries for which annual disbursements from the World Bank are equivalent to at least 2 percent of annual GDP on average. Sample mean is the average of the 22 countries in the sample. Annual WB aid (% of GDP) is annual disbursements from the World Bank as a fraction of annual GDP. Annual ODA aid (% of GDP) is annual Official Development Assistance (ODA) from all sources as a fraction of annual GDP. Haven deposits is foreign deposits held in the 17 countries classified as havens. Non-haven deposits is foreign deposits held in the countries not classified as havens” (World Bank Feb 2020).
|Nation||Haven (million USD)||Non-Haven (million USD)|
|Sao Tome and Principe||4||8|
When you add into the A6 Table of the modestly aid-dependent countries. You see yet more African countries, where the money a flowing out of the coffers. Where surely not all aid is going where its supposed too.
The report explains table A6 like this: “The table shows the 24 countries for which annual disbursements from the World Bank are between 1% and 2% of annual GDP on average. is the average of the 24 countries in the sample. Annual WB aid (% of GDP) is annual disbursements from the World Bank as a fraction of annual GDP. Sample mean is the average of the 22 countries in the sample. WB aid disbursements is annual disbursements from the World Bank as a fraction of annual GDP. Annual ODA aid (% of GDP) is annual Official Development Assistance (ODA) from all sources as a fraction of annual GDP. Haven deposits is foreign deposits held in the 17 countries classified as havens. Non-haven deposits is foreign deposits held in the countries not classified as havens” (World Bank Feb 2020).
|Nation||Haven (million USD)||Non-Haven (million USD)|
|Central African Republic||18||53|
|Democratic Republic of Congo||910||93|
Without going into deep technicalities of these operations, neither how the World Bank came through these numbers. We can see there is a staggering amount of funds that disappear and goes missing. Which was supposed to go to development or directly to support the state functions. Which happens to end up in tax-havens, surely by someone closely associated with the state or heads of state. Since, these sorts of amounts couldn’t have left the nations without the approval of the executive or head of state.
We can also clearly see, that some aid is directly feeding the rich and keeping tax-havens alive. Giving them financial stimulus and also covering the expenses of the elites in the respective places. There is certainly a mismanagement and a need for more oversight from the World Bank. But also more mechanisms to stop the misuse of aid. If it is supposed to help and not just create a very vastly elite in the nation in question. Because, with this sort of operations, they have clearly achieved that. Peace.
By my reckoning, the rebranding of Central African Franc (CFA), which was the relic of the colonial French rule in Western African states. During the last few 48 hours, there is news of a new currency, which has implications, but also imperfections.
The ones praising this move is naive. The reason is simple, Emmanuel Macron or the French is still not giving way to power nor influence. They are still having their hand in the cookie jar. They are still involved with the inner-works of the financial sphere of the former colonies. They are maybe stopping the control directly from the National Bank of the French.
This move is to ease the pain of the past, but still the French and the European Union will have their stakes in it. As the pegged currency will be accordingly traded towards the Euro. A Euro, which the French has influence over in the EU. Therefore, the former colonies and the ones accepting this “ECO” Currency are accepting control from Paris and Brussels still.
They are maybe done with the regulations of CFA and the banking system as known today. But the ECO will be measured after the Euro. This is all a condition, that still benefits the former colonizer. If it wouldn’t, he wouldn’t have accepted it. Not like the French wants to loose influence nor the ability to easy trade with former colonizes. Why do you think most of the cars in Tunisia is French and not a random Skoda?
With that in mind, the ECOWAS was not launching this, but Macron was. Therefore, the whole thing seems like ploy to leave one relic behind, hoping people would be so happy that they don’t look into the mechanisms of the new currency. Not like the French would ever drop influence nor their strong hand over Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal & Togo. All of these will still be semi-controlled by Paris.
I have a hard time believing the intent of the French is to give way. No, this is just a shift to extend their power and find new measures to secure it. By remaking the former currency and the monetary union these nations have. Not like they are suddenly creating their own or having 8 separate ones. If they did that, then it might been significant. Where the own national banks, together with Ministry of Finance would make and ensure the safety of own national currency accordingly and necessary for their own Republic.
To remake and rename, only questions the motives behind the move. Other, than trying to clean the dirt of your hands and call it good days work. After years of questioning the currency and the stranglehold of these Republics. By having appointed men in their National Banks and having their gold in Paris.
I lack faith, but I am also very cynical about it. I’m not easily buying into it. I am hopefully wrong. Until the measures, until the mechanisms are all out and the proof of a vital change. It just seems like a small ploy to trigger hope for a difference, when its really just a new name and the same landlord over it. Its still the same farm and the same output, but the master just renamed the land differently. Peace.