Foreign Aid and its Role in Maintaining the Exploitation of the Agricultural Sector: Evidence from a Case Study in Africa

Abstract

Today most foreign aid donors are genuinely committed to the idea that development in Third World countries should start with rural development. Therefore, a sizable proportion of their development funds are invested in rural projects. However, donors channel these funds through local governments (most often representing local bourgeois interests) that are not as committed to the principle of rural development. These governments are often also embarked in policies that are actually—directly or indirectly—expropriating the surpluses generated by agriculture and investing them in the other sectors of the economy. The peasants are therefore footing most of the bill of overall national development. This paper contends that, because of this state of affairs, foreign aid directed toward rural development is actually filling the investment gap left by an internal system of unequal returns to production in agriculture. In so doing, foreign aid is indirectly financing the development of the other sectors of the economy, even if this result is unintended. This perpetrates maldevelopment without redressing the basic exploitation process of peasants which lies at the core of underdevelopment. Evidence to support this hypothesis is presented using data from a primarily agricultural exporting country: the United Republic of Cameroon.