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Government aid programs are increasingly associated with business interests, blurring the line between philanthropy and financial gain.
How does this impact developing countries - both in the short and long term? We speak with journalist Antony Loewenstein
who has spent years documenting what he calls ‘disaster capitalism’ in Afghanistan, Papua New Guinea and Haiti.



Antony Loewenstein is an independent freelance journalist, author, documentarian and blogger. Antony’s best-selling books include My Israel Question, on the Israel/Palestine conflict, The Blogging Revolution, on the internet in repressive regimes, Profits of Doom, about privatisation. His latest book is Disaster Capitalism: Making A Killing Out Of Catastrophe, about fortunes made from disaster, poverty and catastrophe. His first film is Disaster Capitalism. He’s currently working on a book about the global “war on drugs”.

Learn more about Antony


I do think there should be much more public discussion, and I think there should be more accountability of leaders who are giving out insane amounts of aid every year.

To lump all of aid into one basket and say, "Well then we just should reduce it or stop it," doesn't make sense to me. It's about saying, "Where are you targeting that aid?" Because there is a lot of need.

The idea of a lot of US aid around the world was directly linked to profits for US companies. It wasn't a by-product, it was a direct reason for what aid was about.

The vast majority of the reduction in global poverty in the past 30 or 40 years has come from people being lifted out of poverty in China. Has aid actually made any difference?

PNG is on the cusp of being a failed state, and Australia's aid money, arguably, is a way to ensure that Australia keeps those problems over there and not over here.

You're listening to Conversations in Development, a podcast about foreign aid, development, and social change. I'm Olivia Rosenman and I'm here with Peter Mason, my co-host and the CEO of the international development agency Cufa. Hi Peter.

Hi Olivia.

And this episode is about how aid fails in conversation with Antony Loewenstein. Antony is a journalist and the author of the book Disaster Capitalism: Making a Killing Out of Catastrophe. He's turned that book into a documentary that focuses on conflicts between aid money and business interests in Afghanistan, Haiti, and Papua New Guinea. Antony, thank you very much for joining us on Conversations in Development. You've travelled the world investigating how aid dollars are spent, what's the worst example of a failure of aid you've ever seen? In terms of sheer finances, you'd have to say Afghanistan because the amount of money the US has spent in Afghanistan since October 2001 when they invaded has been more than they spent in Europe after the Second World War to rebuild Europe. We're talking about ... No one actually knows how much money the US has spent, but we're talking about in excess of 100 billion dollars. Having spent quite a bit of time in Afghanistan, no one could say nothing has improved. Yes, there are some new roads. Undeniably, kids go to school that didn't go to school before. There has been some infrastructure, there has been some progress on press freedom. There is some kind of media, people can now listen in parts of the country to different music, which was banned under the Taliban. In Kabul at least, women have got far more rights than before, although I'd say in much of the country lives of women have not changed very much.

So there have been improvements. It's not a question of saying all the money has gone to waste, but the fundamental point of where a lot of US money has gone, and I would say a lot of Australian aid money has gone, has actually been an incredibly short term thinking process. Meaning that, in vast parts of the country, the aid money actually is going to warlords. In other words, the way that areas of Afghanistan, it's a tribal culture in much of the country, warlordism is how Afghanistan operates. Both aid organisations and governments, Australia, the US, and others, have been far too willing to engage and partner with those warlords in a, I would argue, futile attempt to get stability, peace, whatever you want to call it.

The second issue has been not unrelated, that the US and Australia has backed deeply corrupt central governments in Kabul, Hamid Karzai, the first president, and now Ashraf Ghani, who are both deeply compromised figures, who are deeply corrupt, who have not achieved pretty much anything that they've actually wanted to achieve. One of the focuses I had in my book and the film that will be out in 2018 is to look at the potentially burgeoning mineral and resource sector. Many people won't know this, but a lot of studies have shown that there's potentially trillions of dollars of resources under the ground in Afghanistan mostly untapped. The Soviets discovered this when they were there and occupying the country 30 odd years ago, 35 years ago. They were kicked out of the country.

Fast forward to 2001, the US comes in, did some surveys, no one knows exactly how much is there because the country's very unstable, but the US has predicted anywhere between one to five trillion dollars of resources. The Bush administration, the Obama administration, and now the Trump administration, at various degrees of seriousness have pushed a mining industry. In other words, they've supported financially foreign companies to come into Afghanistan, mainly US companies, to try to exploit those resources. They've paid the Afghan government to try to exploit those resources. The thinking has been fundamentally mistaken, and I might add, this is regarded as aid. It's framed as aid support.

Obviously, the image we often have of aid is building a well or helping build a school, and that is undeniably a vital part of aid. As I said, there's certainly good examples in Afghanistan of some of that happening and benefiting locals, particularly women and kids, but if you're believing that aid should be intimately tied to business interests, which is how the US, and I would argue Australia, regularly sees it, when you are talking about a mining industry in Afghanistan, you've seen, A: virtually no mining industry at all, B: at least 500 million to a billion dollars spent, if not more, in the last year to try to support an industry which is inherently difficult because the country's at war, it's very unstable. People in fact who are making the most money from mining now are the Taliban. The Trump administration has made a key aim in Afghanistan to support the mining industry without learning anything about what's happened for the last 16 odd years.

I think it's really interesting what you say about the way that this aid money is tied to business interests, and how a lot of that money gets wasted because it's in the pursuit of these business interests. When did that happen? When did aid become linked with business interests? Has that always been the case? Or is that something that we've seen in more recent years?

I think it's mostly in the modern era. Certainly, it's been around for a number of years, but I think very much, and I write about this in the book, 9/11, I think in some ways was a bit of a turning point. 9/11 was a turning point for so many issues, mostly gone much more negative since, in the last 17 years. What the Bush administration in the US did, and certainly the so called leadership of John Howard here in Australia, was that they didn't see any inherent contradiction with those two issues, that if you want to go to a country and support them, that may potentially mean benefiting Australian companies for profit.

Now, I'm not inherently saying that any company in Australia that's made money is evil and terrible, not at all. There are exceptions of course, and there are a lot of examples where Australian companies for example, or US companies, have gone to country X or Y and helped people and then left, and people are happier than they were before. Unfortunately, too often there's a case where a lot of the way that the US government and therefore many of its allies: Australia, UK, many in Europe, New Zealand as well, view aid and business is that they are tied together because the argument is always, why wouldn't businesses from our countries benefit? One. B: the private security industry, which has massively expanded since 9/11, often is used to protect, A: aid workers, and B: areas and locals who are under threat. The result of that is that many locals in a lot of places are visited intimately now tie aid with someone delivering it with a gun.

In other words, aid organisation X, or the US government, regularly delivers its aid through at times the US military. That to me is inherently problematic because a person in Afghanistan or elsewhere regards those kind of potential benefits: food, schooling, whatever it may be, with a weapon: with military, with an occupation, and as we've seen in Afghanistan, the occupation now is the longest in US history. It's the longest war in US history with no end in sight. In fact, the US is building a massive Baghdad style green zone in Kabul. I mean, there's a plan there to be there indefinitely, which by definition means the conflict will continue, which by definition means that many of the groups that are providing aid to Afghanistan; whether it's American, or Australian, or elsewhere, will either have to have their arm twisted to provide it because the security for those aid workers is so tenuous. Much of Afghanistan now has become inaccessible because of security problems. In fact, a lot of estimates suggest anywhere between 40 to 60% of Afghanistan is now controlled by the Taliban.

So all these, I think, factors, and one of the things that came out finally with Edward Snowden, the former NSA whistleblower who came out a few years ago, and he released through The Guardian, amongst other publications, a lot of details about what US interests were in many places around the world using surveillance of the NSA and others. It was made very clear, the documents showed that the idea of a lot of US aid around the world was directly linked to profits for US companies.So it wasn't a by-product; it was a direct reason for what aid was about. So the idea of using US surveillance technology intelligence tools to benefit US companies, the only way you can do that is if you believe that the profit motive is the key motive of US foreign policy. Australian foreign policy, although not exactly the same, is increasingly following that model, and it's even been articulated that way by the current Liberal government here. It's not subtle; it's open and obvious.

This does not mean that all Australian aid is about that, not at all, and I've been to a number of places where Australian aid in the last five, 10 years has benefited people and it's not directly linked to a company or person making money, but increasingly it's viewed as a necessary by-product. The argument being, why shouldn't Australian companies make money from this?

Peter, Cufa works in a number of countries in Southeast Asia and the Pacific. Have you seen any obvious examples of aid that is directly linked to business interests there?

There's plenty now. I mean, since we've had the new regime of aid for trade, there's plenty of examples of that linkage where DFAT is now trying to actively pursue companies to work with them, mostly around the technology at the moment, but also through, for want of a better phrase, weaponising the market linkages, if you like, and really sort of joining the dots for companies here in Australia, but also providing that seed funding to be able to do that.

Antony, you've mentioned a lot of examples focusing on the US government, and especially in Afghanistan, but let's talk a bit more about the Australian government. I wonder if you think that the absorption of AusAID into DFAT reflected a sort of an emphasis on that approach, that it's more about business interests than philanthropic interests. I noticed that Canada did a similar thing in 2013, so do you think that that's globally the way that a lot of developed countries are going with their aid?

I mean, the short answer is yes. Obviously I can say more than that, but I mean, yes it is. Again, this does not mean that all Australian aid or everyone in DFAT is directly thinking about how can we make money for Australian company X or Y, I don't think that for a second. I know that that's not true. Likewise in USAID, but the problem is that in so much of the aid delivery, of the US government particularly, but obviously the Australian government as well. I spent a lot of time in the last years in Bougainville in Papua New Guinea, and the record and the history of the Australian government in Bougainville from the beginning, and for those who don't know PNG became independent in 1975 from Australia; it's been independent now for 40 odd years. Bougainville in 2019 is looking to have a referendum to be independent from PNG. That referendum may or may not happen, it's still frankly very unclear whether it's going to happen.

There was a massive civil war that went on for about 10 years in the '80s and '90s over, at the time, the world's largest copper mine, which is run by Rio Tinto, which caused unbelievable environmental destruction, terrible pollution. Up to 20,000 people were killed in that conflict, which is one of the worst conflicts of our region in the last 50 years, and no one's ever heard of, or very few people have ever heard of. The Australian government's role in that was central and key: they were supporting, and arming, and training the PNG government that was supporting the Rio Tinto mining company. It's one of the few examples that I found in my work where locals beat overwhelming odds. On one side there was Bougainvilleans fighting for freedom, independence from at least the mine. Independence as a country certainly was part of that, and that's still obviously a work in progress. On the other side, there was the PNG government, Rio Tinto, private security, and the Australian government. Now, that was in the '80s and '90s.

Fast forward to now, not much has changed. There's no Australian troops with guns right now, but for those who aren't aware, Australia provides some of the hugest amounts of foreign aid to PNG every year; it's one of the second highest recipients after Indonesia now. It's about 550 million dollars, but some of that's obviously tied to the asylum seeker centre on Manus Island, but this was happening before that was set up by the Labor government years ago. In Bougainville, again with notable exceptions, we are now seeing a concerted effort by the Australian government, Julie Bishop as foreign minister, the PNG government, the Bougainvillean government, which is sadly deeply corrupt in the process as well, pushing for the reopening of this awful dirty mine. Nothing has ever been cleaned up from the past, Rio Tinto has now walked away from the agreement. Another mining company wants to take it over and is saying, "You as Bougainville cannot have independence essentially, unless you accept the mine reopens because financially you guys will not stand on your two feet without it." Many Bougainvilleans in poll after poll say they don't want that. So we're almost at a stalemate here.

The reason I think Australian government's record in Bougainville is so ugly is, A, there's never been an apology for what they did 20, 30 years ago, and a lot of Bougainvilleans I speak to and have spent time with are deeply resentful for Australia's role back in the day. Secondly, the idea of somehow believing that a reopening of a massive copper mine will somehow provide the kind of financial independence or environmental security that Bougainvilleans want, and asks the Australian government, "Name me three examples from other places around the world where your glorious mining support actually is helping locals?" The fact of the matter is, it doesn't happen that way. PNG is the worst case example, arguably, in the world of countless Australian and foreign mining companies getting Australian government support. Anyone who spends any time in PNG knows, PNG is on the cusp of being a failed state, and Australia's aid money, arguably, is a way to ensure that Australia keeps those problems over there and not over here.

My view of a lot of aid money in PNG is that it should be massively reduced. This argument that says let's keep having more, and more, and more aid. Okay, so what exactly are the metrics here of success? At what point do we say to ourselves, "I don't think PNG should be cast adrift." I'm not saying it's not Australia's problem, we have deep complicity in the problem, but to keep on giving more and more aid every year without asking, I would say in the wider community, where that aid is going, and is it actually helping people? In some places it is, it is, but in a lot of places it's not, and it's intimately tied to the mining industry, and that, I think, is a real problem.

So Peter, Cufa does a lot of work in PNG, what do you make of Antony's argument that the amount of aid that's sent over there should be reduced?

People often say that the aid budget, "Why are we spending all this money on these countries that are corrupt? They don't have transparency, and they abuse human rights, etc.," but then, to lump all of aid into one basket and say, "Well then we just should reduce it or stop it," doesn't make sense to me. It's about saying, "Where are you targeting that aid?" Because there is a lot of need. There are schools that need to be built, there are roads that need to be built. Bougainville's a great example where it needs infrastructure. It needs huge amounts of infrastructure, and I do know that DFAT is building some roads and some bridges, but it needs so much more. So to cut the aid budget to PNG will be problematic in terms of that infrastructure at least. You know, the sort of work that we're doing over there working with young people that were disadvantaged because of the struggle, the struggle over the mines, missed out on education. So again, they need to be lifted up. So just cutting the aid budget because it's being wasted, I think it's better to actually say, "Where can we target this aid?"

But those conversations aren't happening. They may be happening internally, maybe. Obviously what's happening internally is impossible almost for an outsider to know, and I know people in DFAT and we talk about this. It may be, but aid there's virtually no discussion in the public, which is not solely DFAT's fault, it's more just our media in Australia is kind of broken, but that's a separate issue. Again, I agree with you completely to say that there is desperate need in Bougainville for support, and whether that comes in Australian government or increasing the Chinese government, I don't think it overly matters. I guess it depends what strings are attached in doing so, but again, don't we have to ask ourselves what exactly are those strings? If the massive pressure on Bougainvilleans is saying that, are we going to put pressure as an Australian government on the PNG governments not allowing an independence vote? Because that's very possible.

In other words, if Bougainvilleans rise up in some way, I'm not saying in a violent way, and say, "We don't want to reopen this mine. We've made a somehow c ollective decision," which is difficult to do in a place with not particularly good communication, but some kind of way that says we don't want to reopen this mine. The Australian government says, "Well basically, you have no choice," which is basically what we've been told now. The Australian government said that explicitly, so has the PNG government, and the Bougainvillean government. So again, I'm not saying all the aid is tied to the reopening of the mine; it's not, but if the end result in two odd years is to have an independence vote that grants independence, and a lot of countries, including PNG, are worried about what that actually means for sustainable issues in Bougainville, and that's not an unreasonable question, how is the country going to survive on its own two feet? But I would argue, and a lot of locals would say, that mining's not the answer, and that is where all the major power players are pushing Bougainville to go.

Could you argue that the move to bring AusAID into DFAT was a move to potentially obfuscate what's going on there, that there is less transparency in hiding it, or housing it perhaps, not hiding it, within another department?

I would say yes. You may disagree. I'm not saying that there was, again, some sort of nefarious kind of evil plan in the Liberal party bowels, I don't think that, but I do think that-

It's starting to sound like that.

No, not at all. Now this issue is bipartisan, this is not only directed to the Liberal Party. This is similar ... Labor policy is not exactly the same, there are differences obviously. There's, to me, unfortunate bipartisanship on these questions, with exceptions, and the US is similar. During the election campaign when Obama was running, one of his key campaign promises in 2007 was to massively change the way aid and contracting was done post 9/11, the fact that there was so much insane money spent on particularly Iraq and Afghanistan. He came into power and in fact the situation arguably became worse. It just wasn't a priority, other things came up, and it's not going to change any better under Trump, that's almost guaranteed. So it didn't change under Obama, then my point being that I do think there should be much more public discussion about this.

I think there should be more accountability of leaders who are giving out insane amounts of aid every year. I think there really should be, because I think a lot of the public ... It's not about, because the public would be uncomfortable with it, therefore let's cut aid, but I'm saying that I do think that the public should have far more engagement, which I guess you could blame the public for not being interested, or not really caring, or whatever it may be, but I think that's a problem in a democratic society. There's virtually no polls about it, there's virtually no public discussion about it. That's a problem, isn't it? A lot of money every year that we're giving out.

It is a lot of money, but there are benefits back to Australia, which I think you're-

Which should be better explained potentially, if you think that they exist.

Potentially, yeah. I mean, I think Australia being a middle country needs to have influence, and certainly influence in our region. What do you think the aid budget's used for? Of course it's to have some of that influence, but if we can have that influence and do good at the same time, why not?

I agree.

Yeah, so-

If we're often doing that.

The aim of aid is to lift people from poverty. Millions have been lifted from poverty in the past few decades, but I want to ask how much of that is actually thanks to foreign aid? Now, according to the World Bank, the number of poor people in the world fell by 700 million between 1981 and 2010. In China, over that same period, the number of poor people fell by 627 million. So really, the vast majority of the reduction in global poverty in the past 30 or 40 years has come from people being lifted out of poverty in China. Has aid, has the billions of dollars that has been spent by governments, and NGOs, and international organisations around the world actually made any difference?

I think there's undeniably in some countries, the answer is yes. Aid has provided lifesaving help. I mean, the short example in South Sudan, for example, the country that basically is a failed state, it's propped up by the UN and various NGOs. On the one hand, I have profound problems with the country essentially being run by unelected bodies. That is, to me, a deeply problematic ... Which is very common now in many conflict zones around the world. On the other hand, that does not lead me to say, "Kick them all out." If they left tomorrow, South Sudan would collapse far more than it is now, I don't deny that. I've seen that with my own eyes when I was living there and working there. So that, to me, is not an uncommon problem in growing parts of the world.

So to answer your question, I think aid has certainly provided a great deal of life saving support, but then when I look at a lot of other examples, like when I was in Palestine, there's been huge amounts of aid given to Palestine in the last couple of decades, mostly to the Palestinian authority. I think, arguably that's in fact entrenched the occupation even more because it's allowed Israel to not actually take care of people under its occupation. It basically says to the Palestinian authority, which is a corrupt body, to say, "You guys look after all NGOs, look after ..." So the EU gives insane amounts of money every year, so does Australia. Often these infrastructures are destroyed by the Israeli government forces, destroyed by them. I've seen it happening in the West Bank, and the EU's response often is either, "Please don't do that," or it says nothing. This happens time and time again. So you ask yourself, well hang on a minute. Again, that's one example, there are many exceptions. I think aid in Gaza for example, in many cases has been lifesaving. So it's not a black and white issue, but I do think there's a lot of questions about how much aid is either given for the wrong reasons, namely for geopolitical reasons rather than helping people come out of poverty, and there should be more discussion about it.

What you're really arguing for is just a bit of honesty in aid.

A lot more honesty.

Okay, a lot more honesty. You're not disputing the fact that it can be used-

It can.

For geopolitical purposes.

Obviously, I mean that's the nature of-

You say 'obviously,' but we keep going back to, well aid is about alleviating poverty. If we're honest with ourselves, it is about more than just alleviating poverty.

Of course.


Yeah, it's trying to ... Yes, make a political point or curry favour with friends or make new friends, which is not inherently evil. Of course, it's the nature of geopolitics, I get that, but again I think there is a question too often about whether a lot of that money has been spent wisely and simply giving more and more money without really asking those questions in a lot of countries I've spent time in in the last 15 years, I think is foolish. I worry that we're not really learning a lot from those failure because I don't really see much learning from a lot of aid organisations, or the UN, or others, and that worries me. Simply giving more money, or throwing money at a problem, with exceptions, does not generally work, and I've seen that in at least two dozen countries.

We've spoken about the need for more transparency. Antony, you said you think that aid should be more of an election issue, but I wonder if Australians actually care. Many Australians would say, "No, stop aid. We're not interested and we shouldn't be sending all this money overseas," and if you make it more transparent, people will react-

Yeah, and look, I think that's right. It's obviously impossible to say because these things are not generally polled really. Even though it's not really votes, or I don't think it's generally part of election issues, and you're right. I don't think everything should be sort of asked of the population so to speak. I mean, we elect politicians whether we like them or not. There is discussion within the aid world obviously about well-targeted aid, bad program, good program, and that's good. You're right, I mean, a lot of Australians oppose foreign interventions in Middle East wars, doesn't stop Australia getting involved. So there's a lot of issues where the public is right, wrong, and everything in between, and one doesn't always have to have the majority of the population, like a lot of issues, to change a policy, or to influence a policy, but I just would like there to be a lot more interest by first, aid bodies, but secondly, DFAT to actually want to try to explain and justify what they do.

I mean, ultimately something with DFAT, it's taxpayer dollars. I'm not saying that from a right wing Murdoch perspective, I'm saying that from a very left wing perspective that says I'd like to know. I've done a lot of research, so I know more than the average person, but I don't know everything about it of course. I would like there to be ... Now, the public may well respond saying, "Cut aid to PNG." I don't know how that's going to be assessed, but, "Cut aid to PNG. Cut aid to everyone. Let's help us," which is very much, I think, one of the reasons why Trump was so successful in the US, sort of saying, "We've helped the world for too long, it's time to help us," and that obviously appealed to a lot of Americans.

And he's only learning now that he has to backpedal.


You have to engage with the wider world. So it's easy to say, but the reality is it's harmful for the country.

I agree.

Yeah. So we won't be putting any power into the Australian public to make those decisions, thank you very much. No. I mean, you know, you look at what's happening with the States, and as an NGO we get people trolling us on Facebook.

What are they saying in general?

"Stop aid altogether." You know? It's this xenophobic sort of closed mind, let's put up the walls and let's just look at our own people, but who are our people? Our people actually come from a lot of these countries as well. A lot of our people have linkages back into those countries, so you can't put up walls.

That debate doesn't inherently have to be xenophobic. I completely agree with you, there is a-

No, but once we start closing our view to the world, we start to look inward, and that can be problematic.

For sure, and I am completely a big believer in engaging with the world. I think, too often though, our geopolitical interests and our business interests trump human rights time and time and time again. This is not just Australia, obviously the US, and much of Europe. I think the results speak for themselves in a lot of countries. In the last, some would say forever, but particularly in the last 17 years since 9/11, I think the evidence for that is pretty clear.

I'll ask you both the closing question. Does aid do more harm than good?

On the balance, it does far more good than harm, but that's not to negate the harm that it does do.

No doubt aid organisations and governments save people's lives, there's just no doubt about that. I think the harm though is massive. I'm not saying in those particular cases, but the harm is huge. The harm being that increasingly this kind of NGOisation of issues, and conflicts, and environments means that the sovereignty of nations is reducing and this is not someone who doesn't believe that sovereignty should ever be breached, there can be cases where it should be for whatever it is, egregious human rights abuses for example, but I think that harm is not often enough addressed. A lot of people in these countries who I speak to and report about don't feel their voices are being heard, that are saying that, "That we are sort of almost invaded, so to speak, by NGOs." Like in Haiti, as an example, that is a real problem. I wish aid organisations were more aware of that, or at least publicly acknowledge that if they do privately. So yeah, generally a lot of good, but a lot of bloody harm as well.

Antony, thank you so much for joining us.

My pleasure.

Conversations in Development is produced by me, Olivia Rosenman, with music by Studio Gary. The podcast is brought to you by Cufa. Cufa is an international development agency whose work creates infinite value alleviating poverty, reaching more than four million people across the Asia Pacific. To learn more about Cufa's work, and for further information on our guests, visit ConversationsinDevelopment.com.au, and for more Conversations in Development, make sure you subscribe to the podcast to catch all our episodes.