Entrenching dependence

The European Union has decided to double the amount of taxpayers' money it will give in aid by 2015. The EU mandarins are obviously more comfortable giving other people's money as charity than allowing poor countries to prosper through trade. According to Oxfam:

The financial losses associated with import restrictions in rich countries outweigh the benefits of aid. Import tariffs, the least significant weapon in the protectionist arsenals of rich countries, cost developing countries around $43bn a year. The total costs of all forms of trade barriers – including tariffs, non-tariff barriers, antidumping measures, and product standards – are more than double this amount, rising to over $100bn, or more than double the total sum of development assistance.

The extra aid will amount to $40 billion. If the EU chiefs were genuinely concerned about third world poverty, they would dismantle their corrupt, insane, barriers to agriculture, textiles and clothing. Especially since, as Oxfam continues:

Such figures understate the real impact on the poor. They do not capture the costs of protectionism in terms of reduced opportunities for employment, reduced income for essential goods such as food and health care, or the long-term economic losses associated with restricted opportunities for investment. Nor do they capture the disproportionate impact on very poor households. Because Northern governments impose the most punitive import restrictions on goods produced by the poor, they systematically diminish the potential for trade to act as a catalyst for poverty reduction.

It looks very much as though EU governments are trying to replicate on an international scale the disastrous, enfeebling welfare dependency they have created at home. Perhaps they are more interested in control than prosperity.

Technorati tag Economics