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... in the mendicant nation-state, its necessary that aid be in hard currency, because the in-country purpose of aid is to balance the current account while allowing for an overvalued exchange rate so that the elite can afford nice imports.

And since the donor-country purpose of the aid is to generate demand for the products of the donor country, the two purposes are in perfect alignment.

Real aid would entail a hard limit on the hard currency portion of the budget with the balance in soft currency, generating demand for domestic capacity to supply whatever the aid is focused on, and the cap would be steadily reduced as the project developed a capacity to generate hard currency earnings to meet its own needs ... since unless the aid project is developing a capacity to generate hard currency that is equal to the hard currency requirements of the project, its not sustainable.

Some of the volunteer workers have a positive impact ... unlike USAID, where there is no statistical evidence of there being a general benefit from having a USAID project, there has been some evidence that Peace Corps programs can have some benefit. That's probably primarily because the Peace Corps is seen as window dressing, and volunteers are paid at the level of their local peers, so in the end they mostly either share some useful information or they don't, and rarely have a large enough budget to do any offsetting damage.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Sep 8th, 2010 at 04:27:46 AM EST

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