Montreal, May 15, 2012 • No 300

 

Harry Valentine is a
free-marketeer living in Eastern Ontario.
 

  THE EMPEROR'S DERRIČRE Share

The Benefits and Drawbacks
of Aid to Poor Communities
 

by Harry Valentine
 

          We’ve all seen the print ads and television commercials that appeal for donations to help communities in underdeveloped countries. Many of the private organizations that call for such donations use the donations efficiently, perhaps allocating some 90% of their income to actually doing something productive in some overseas location. There are also organizations that solicit for donations and claim to be affiliated with various long-established charitable groups. A former insider from one such “awareness raising” organization recently blew the whistle, advising that they used some 90% of donations internally and provided comparatively little revenue to the frontline charities.
 

          The legitimate organizations often have much to show for their frontline efforts, such as the installation of wells and water pumps in villages where people had previously suffered through drought and famine. Their efforts often lessen the impact that misguided government policies have inflicted on local populations. While famine can result from drought, it has also occurred in the absence of drought, as was the case in Sudan during the late 1980s and more recently in the nation of Malawi. In Sudan and Malawi, it was government agricultural policies rather than drought that led to famine.

Water, Water Everywhere, and Not a Crumb to Eat

          During the late 1980s, water flow volumes were at a cyclic peak in the Nile, when Sudan’s dictator ordered farmers to grow cotton for the export market. Cotton was an export cash crop that could earn the government much revenue. But food markets were empty during the time of the harvest and several million people starved. One third of the area of Malawi is a deep freshwater lake that was full of fresh water, and sunshine was abundant at the time when Malawi faced a near famine, also caused by misguided government policies.

          While several legitimate charities based in North America provided assistance in both Sudan and Malawi, government policies overseas caused them to misallocate precious resources that could have been used more productively. Politicians in developing nations are of course aware that if their programs fail, they can likely depend on overseas assistance to provide for the local citizens during a time of crisis. Such was the case in Tanzania during the rule of Julius Nyrere, whose socialist policies turned a formerly self-sufficient national economy into a bottomless pit for foreign assistance.

          Government policies in Ethiopia long forbade private ownership of land, and local agriculture consisted of subsistence farming. A private organization from Ottawa, Canada stepped in to install wells and water pumps at a few locations in Ethiopia. The nation’s government had long controlled resources such as water and did comparatively little in the way of irrigation and water storage. While drought occurs in some regions of Ethiopia, the capital city of Addis Ababa ranks fifth in terms of annual rainfall among large cities in the world.

          Much of Ethiopia’s excess rainfall either flows into the Nile River or becomes groundwater. Local villagers had no means to access that water until an overseas charity installed a few hand-operated water pumps in a few villages. During a drought that followed a rainy season, the water pumps provided local villages with access to water that had soaked into the ground. Over the short term, private foreign assistance such as installing water pumps provides benefit to small villages.

If It Belongs to Everyone, It Belongs to No One

          A different result emerges over the longer term, however. Local communities are supposed to undertake routine repairs and maintenance on water pumps, fog fences and wells, but they rarely ever do so. In Peru and Chile, several villages located along the Pacific Coast were provided with fog fences that could collect water from mist and fog blowing in from the Pacific Ocean. The population of some villages soared as fresh water became available every day. But local villagers undertook zero maintenance and zero repairs on the communal fog fences, which fell into disrepair and produced less and less water.
 

"The population of some villages soared as fresh water became available every day. But local villagers undertook zero maintenance and zero repairs on the communal fog fences, which fell into disrepair and produced less and less water."


          By comparison, privately owned fog fences in the same regions were subject to ongoing maintenance and repair, continually supplying their owners with a daily supply of fresh water. These examples from Peru and Chile illustrates the disadvantage of communal ownership of property. While some commentators may claim that fog fences failed in South America, it was a failure of the communities to maintain a technology that was providing a needed service.

          The South American example has been repeated in regions across Africa, where communal water pumps, communal wells and communal agricultural tools have fallen into disrepair. Villagers allowed children to play with agricultural tools that ended up lost and broken. Bushings and clevis pins located under the handles of water pumps broke and were never replaced by villagers. Foreign workers had to conduct repairs to get the water pumps working again. Sand accumulated at the bottom of some communal wells and was never removed.

          There are many privately owned water pumps, wells and dams across much of Africa, especially Southern Africa where wells and dams have remained in operation for several generations. In Zimbabwe and South Africa, recent government policy required farmers of British and European ancestry to give up their farms. While farmers in South Africa received compensation for their farms, such was not the case in Zimbabwe, where forced redistribution without compensation prevailed.

          Within two years of the forced change of ownership, farm production dropped drastically to near zero. Like donated fog fences, donated water pumps and donated wells elsewhere in Africa and South America, the new “owners” in Zimbabwe and South Africa did no maintenance and undertook no repairs on their newly acquired property. They expected perpetual production and over the short term, they actually enjoyed “free” production. However, over the longer term, the “free” production declined.

Government Causes Wealth to Evaporate

          Australia provided one of the worst examples of the effects of communal water, when a state government built a massive dam and outlawed private dams on private property. The private dams had served several generations of residents in one rural region, where seepage water sustained some agricultural production during the dry season and a cover minimized evaporation. During a drought, the combination of unproductive seepage and massive evaporation literally emptied a state-owned dam.

          Government officials were in charge of the state dam, but they seemed powerless to do anything worthwhile. It is likely that had the particular drought-affected region of Australia been an independent nation, this government policy would have caused a famine. Private people owning private dams on private property in Australia and areas of South Africa had for generations had successfully managed farms in regions prone to annual drought.

          Innovation in drought-prone regions can prevent famine. Large vertical caves occur naturally in many locations internationally and can store water with near zero seepage and near zero evaporation. Technology can access underground caverns to store water, produce water out of humid air in South America and pump water from underground porous rock in Ethiopia. Private ownership has succeeded in water resource management in drought-prone regions. Communal ownership of water resources has resulted in numerous failures of otherwise useful water resource technology, mainly as a result of the absence of maintenance and repairs.