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South Africa massively benefitted from foreign aid â€` and the age of aid is over

Source: Samigration, 06/03/2025




`Another aid superpower has fallen, taking with it all the indirect benefits South Africa accrued from do-good spending in its neighbourhood,.Until last Tuesday, the United Kingdom considered itself as an aid superpower.You could quibble about whether the numbers justified such a grand description, but the sentiment was sincere. During the toughest days following the 2008 financial crisis, a hard-nosed Conservative UK government resolutely held the foreign aid budget at 0.7% of national income, and it seemed genuinely embarrassed to cut that to 0.5% after a global pandemic demanded a torrent of money while shutting down big parts of the economy.Then, last week, the left-leaning administration slashed that 0.3%, which looks very much like a stretch target unlikely to be met as trade wars loom.But it is actually much worse than that. When the UK says ``foreign aid``, it includes spending on refugees, including domestically, on things such as hotel accommodation for people who reach Britain via small boats. Unless the government stops the flow of undocumented migrants (which it appears unable to do), the actual amount of money the UK will spend on feeding the hungry and healing the sick in places like southern Africa will be negligible.In rands-and-cents terms, the scale of the UK retreat from foreign aid is dwarfed by America`s wholesale shutdown of do-good money, but perhaps more telling. Foreign aid was closer to the heart in the UK, perhaps still rooted in post-colonial guilt, and the decision to drop it was a more calculated and less populist one. Like the UK, the European Union must also finance a massive rearming in the face of a Russian threat no longer countered by assurance of American support, and that money has to come from somewhere. But the EU was already headed towards a policy of more mercenary foreign aid, quid-pro-quo rather than handout, and that trend will only accelerate.A glance at the G7 roster will tell you that Canada and Japan are left as the rich countries that can step in to save lives in poor countries. Even with the best will in the world â€` which they do not have â€` they could not fill the gap.There is still money in the pipes, but the taps have been turned off, and the era of foreign aid is over.Aid massively benefitted SASouth Africa was never an aid-dependent country, and it will not feel the direct impact of the end of aid as acutely as many other countries will. People will die because there is less money for HIV prevention, but not as many will die in countries where the problem is acute hunger. NGOs and their suppliers will shut down, but not as many as in countries that act as aid hubs, where aid is a big sector of the economy.Though it was not a big aid recipient, the indirect benefit South Africa accrued from foreign aid to countries around it has been incalculable.Despite the claims by Donald Trump and Elon Musk, a lot of aid-funded projects have done a vast amount of good all over southern Africa. They have reduced the burden of disease, and so reduced demand on South Africa`s health system. They have spurred primary production, which helped feed South African industry, and economic growth, which created markets for South African goods. They have deepened democracy and combated extremism, bringing to South Africa all the benefits of greater and more sustainable security in its neighbourhood.And nobody is coming to the rescue. Multilateral organisations mostly depended on the US and Europe to fund their aid projects. Multinational companies are increasingly disinterested in philanthropy. Russia and China have always been transactional and will continue to offer security in return for minerals and infrastructure in return for indentured servitude, respectively. Other players with money and resources that have long been isolationist or mercenary, such as the Gulf States, aren`t going to change their ways in this environment. There is a fantasy among conservatives â€` especially in rich countries â€` that if you yank away aid and just trade on fair terms, then poor countries will somehow do better.Perhaps that, or a similar miracle, will happen.Realistically, though, South Africa needs to prepare for its neighbourhood to become poorer, sicker, and less stable in coming years, and decide what to do about that right about now.`


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