Callous foreign-aid fraud.

ITEM: The Financial Times for August 13 reported: "Rich countries have largely failed to back their voluble lip service to combating global poverty by doing more to help, according to an annual assessment by a leading think-tank. The Washington-based Center for Global Development said that while two-thirds of rich countries had improved their policies towards poorer nations in the last three years, seven had gone backwards." The president of the CGD, Nancy Birdsall, said, "the rich countries' achievements 'fell far short of leaders' soaring rhetoric in 2005, the so-called Year of Development.'"

ITEM: A Dow Jones release published on the Easybourse website on August 13 similarly reported: "The U.S. and U.K. both fare poorly on their commitment to assist developing countries, despite the billions of pounds the two countries commit to foreign aid each year, a new report has found.... Even though the U.K. and U.S. commit vast amounts' of foreign aid each year, the aid is small relative to the size of the respective economies, the analysis showed."

CORRECTION: There is not enough wealth in the world to meet a fraction of the demands of the foreign-aid proponents, who never tire of calling for the spending of other people's money. In addition, as long as there are handouts available, there will be authorities willing to testify that just a bit more funding will do the job. One of the true experts in this field, the late Peter Bauer, quoted an official from a developing country who was astoundingly honest and admitted, "We shall produce any statistics that we think will help us to get as much money out of the United States as we possibly can. Statistics which we do not have, but which we need to justify our demands, we shall simply fabricate."

A year ago, the United Nations called for yet another doubling of foreign aid. Not surprisingly, more relief is again being sought. Yet after decades of foreign-aid failures, both foreign aid and the pain of poverty go on. As economist Walter Williams recounts: "Nearly every sub-Saharan African nation is poorer now than when they became independent during the '60s and '70s. Since that time, food production has fallen by roughly 20 percent. Since 1975, per capita GDP has fallen at a rate of half of one percent annually. Nigerian President Olusegun Obasanjo estimated, 'Corrupt African leaders have stolen at least $140 billion from their people in the [four] decades since independence.' The call for more aid by George Bush, Tony Blair and other G-8 leaders will produce nothing but more of the same."

Most of those with vested interests won't admit the truth. One who has, however, is Thomas Dichter, the author of Good Intentions: Why Development Assistance to the Third World Has Failed, who has worked for the World Bank, United Nations Development Program, and Peace Corps, among other organizations. "Somewhat late in my career," he writes in a briefing for the Cato Institute, "I have come to believe that as a means of reducing world poverty, aid has not worked, is not likely to work in the future, and cannot work.... I don't know a single colleague with long field experience who believes whole-heartedly that aid has been effective."

The reasons for this are fairly straightforward, boiling down to the inescapable fact that such aid fosters dependence, increases resentment, props up dictators and corrupt governments, and throttles true economic development. Of course, this is not really "aid," but a transfer of tax money, mostly from the middle class in the West, to the rulers in the underdeveloped world, with much being siphoned off by intermediaries in the "poverty industry."

Examples of resultant ill effects are myriad. Ugandan commentator Andrew Mwenda provided an all-too-typical report on the BBC last year, when he pointed out how debt remittance (which often follows development "loans") teaches a poor lesson.

In his native country, he noted, foreign aid supplies almost half the budget. "Uganda was forgiven its debts [in 1998] through the Highly Indebted Poor Countries Initiative. As a consequence, government indulged itself in very luxurious expenditure--increasing the size of Parliament--and invaded Congo and Sudan. And not only that, it went on a renewed borrowing spree and today, seven years later, Uganda's debt has more than doubled and now it is unsustainable. Parliament is so foreign-aid dependent that even the chairs and desks are funded by Denmark. And worse, with so much of our country's budget in the hands of the foreign-aid donors, the power of Ugandan voters to hold our government to account has been usurped by international creditors--precisely because he who pays the piper calls the tune."

A longtime professional in the field of international development--who happens to be a fellow at the CGD think-tank cited above--is William Easterly, author of The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Easterly explains that medicine to prevent half of malaria deaths is available at 12 cents a dose, and there are almost 2 million child deaths annually caused by diarrhea that could be prevented with 10-cent doses of oral rehydration therapy. Yet, as he notes, while the West has spent $2.3 trillion in foreign aid over five decades, even such simple aid has not reached those sufferers.

The injurious consequences of foreign aid are not restricted to Africa. Micronesia is another prime example. In Prosperity Versus Planning: How Government Stifles Economic Growth, David Osterfeld writes: "The pauperization of Micronesia was a direct result of foreign aid. The United States acquired Micronesia as a trust territory in 1945 following its liberation from the Japanese. Outside private investment was discouraged because it would, according to U.S. Navy officials, 'reduce the people to cheap labor.' Instead, the people of Micronesia were given free food, clothes, and other supplies. The result was bankruptcy of many local stores and undermining of the incentive to work." The author quotes a Micronesian official as follows: "We have no technicians, no plumbers, no electricians. We have no economic base to be self sufficient because the U.S. government just handed us everything."

Moreover, as noted by Congressman Ron Paul (R-Texas), there is "a strong moral case to be made against taking money from Americans and giving it to foreign governments. Foreign aid doesn't help poor people; it helps foreign elites and U.S. corporations who obtain the contracts doled out by those foreign elites. Everyone in Washington knows this, but the same lofty rhetoric is used over and over to sell foreign-aid programs. Corporate welfare is bad enough, but corporate welfare in the guise of helping poor foreigners is indecent."