- The Washington Times - Sunday, August 14, 2005

Rich countries are watching the crisis in Niger unfold with horror, as pictures of severely malnourished babies appear in newspapers everywhere. Food shortages in Niger, the second-poorest country in the world, were caused in large part by back-to-back waves of drought and locusts. The problems were exacerbated by donor nations’ refusal to act more quickly to provide humanitarian assistance to famine victims; press reports have also blamed the Niger government’s refusal to provide free food aid for the fact that the crisis ravaged the country so quickly. But less attention has been paid to a politically incorrect reason why the situation is so dire: the role of the International Monetary Fund in pushing the government to raise taxes.

Although the IMF’s role in Niger’s woes is often exaggerated, the agency has acknowledged some of its errors. In an Aug. 5 letter to The Independent of Britain that the IMF sent in its own defense, it acknowledged that its lending to Niger required a “gradual increase in domestic revenue to supplement assistance from development partners.” In other words, Niger was required to raise taxes. The IMF went on to acknowledge: “This January, the government introduced some revenue measures, including the extension of [value added tax] to milk, sugar and wheat flour.”

True, the government of Niger was forced to drop the tax three months later due to the resulting public outcry. Nevertheless, it is difficult to believe that the technocrats at the IMF supported a food tax as a famine was afoot.

But in other ways, wealthy countries were so slow to react to Niger’s troubles that they will now be much more expensive to address. Instead of shipping food aid, it must be flown in, which is about three times more costly. Rather than establish food and supply links from within Africa, nongovernment organizations must pay more for resources from outside the continent.

That slow response might be due in part to a desire on the part of wealthy countries to see poor nations become self-sufficient. Indeed, the bulk of foreign aid should go towards rewarding good governance in poor countries and helping the developing world fend for itself. Still, donor countries should not muddle policy. Distinctions must be made between development aid and humanitarian aid. With the latter, industrialized countries no longer have the luxury of thinking about long-term objectives, and instead must react quickly to save lives. Some humanitarian aid, particularly the doling out of food aid, does cause some shorter-term problems, such as lowering the price of food for struggling local producers. Therefore, early intervention, which more readily allows for the purchase of food from farmers in the area, is a better approach.

Governments in wealthy countries should understand that when the pictures of starving babies hit the papers, they will be forced to react to a famine. Donor countries and the African Union should continue thinking about how they can put the continent on the road to self-sufficiency.

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