What is to show for the Outpouring of Aid to Africa?

An Examination of the IMF and its Racist Components

Jessica Hale
POL S 425 A
Word Count: 3,327
Puzzle
The aid provided to Africa from the United States quadrupled from 2000 to 2008, with
aid in 2008 toping out at $5.5 billion. However, even with this outpouring of aid, growth for
Africa was only projected at 1.7 percent for 2009.1 The United States does a good job funding
aid to Africa, however, the way in which aid is being distributed is questionable. It is my opinion
that for the amount of financial support the developed countries have provided, the resulting
progress and autonomy of the African states has not improved. The question is, why is the
condition in Africa not improving with the plethora of intelligent people working on foreign aid.
I will argue that the racist tendencies of our worlds government officials have limited the
potential of aid in Africa.

Main Arguments
Examples of racist theories are difficult to identify since the majority of people do not intend to
be racist. John W. Dower is one of few who are open to the idea of racism being a motivated
process. He identifies that during the Pacific War, both the Japanese and the Americans used
oversimplification to illustrate that the other was polar opposite from them.2 By the Americans
viewing themselves as good and fair, they portrayed the Japanese as terrible and threatening.
Dower takes this idea a step further with the role of confirmatory attribution. Our identity is
formed in relation to others, which means that how we choose to view others also indicates how
we view ourselves. 2 If we would like to view ourselves as good and fair, we in turn have to view
the other as terrible and threatening. This concept is what makes Dowers theory on race
motivated since we need to believe our position is the right position in order to continue thinking
of ourselves as better.
I contend that many of Dowers race theories can be applied to the way in which aid is provided
to Africa. The main difference between the Japanese in the above example and the African states
is that instead of the developed nations viewing the people in Africa as threatening, they view

1 "U.S. Assistance to Africa a Call for Foreign Aid Reform : Hearing before the Subcommittee
on Africa and Global Health of the Committee on Foreign Affairs, House of Representatives,
One Hundred Eleventh Congress, First Session, April 23, 2009." (n.d.): n. pag. House Committee
on Foreign Affairs. 23 Apr. 2009. Web. 5 Mar. 2016.
2 Dower, John W. War without Mercy: Race and Power in the Pacific War. New York: Pantheon,
1986. 27-28, 149-150. Print.
them as inferior. As demonstrated above, by viewing African states as inferior, the developed
nations views themselves as superior. Dower also examines that when there is a gap in values
there is often unwillingness to empathize or understand the other side leading to a strong in-
group identity and out-group discrimination. 2 With African culture being much different from
those in developed countries, I argue that the African people are often lump together and
discriminated against for their perceived lack of intelligence and poverty-stricken conditions.
The developed countries portray African states as the poor other and themselves as the liberators.
Finally, Dower discusses the role of fundamental attribution error, which is the idea that when we
have a bad image of someone, we expect him or her to live up to that image.2 I believe that the
developed nations view of African states as inferior is a bad image and the African people are
perceived to be incompetent without the help of developed countries.
To examine the validity of these racist theories between the developed nations and the
African States, this paper will focus on the role of IMF loans. The IMF operates in a way that is
drenched in western states feelings of superiority, indicating a racist component to its structure.
While loans to African states can be powerful and allow the state to grow their economy, I argue
that IMF loans often trap African states in perpetual debt with their contingencies.

Competing Arguments
There are numerous contesting views on my argument. One dissenting view is that the
developed nations do not need to change their foreign policy position in Africa and that the IMF
loans are working. Since the IMF usually provides loans to a country when they are in financial
crises and a period of instability, some individuals believe that is not the loans themselves that
are causing the painful interventions but the situation of the country who has called in the IMF
too late. This argument is deflecting the criticism that IMF involvement often leads to a
weakened political structure that jeopardizes the countrys chance of successful reform. 3 The
idea here is that the IMF is doing what is necessary, not what is easy. In order to rescue a country
from further turmoil, sometimes IMF interventions make things worse before they make things
better.

3 Mayer, Otto G. "The IMF Debate." Intereconomics. N.p., Mar.-Apr. 2000. Web. 1 Mar. 2016.
A stronger dissenting view on my argument lies in those that do not support the IMF, but for
reasons other than its discriminatory practices. A common argument against the IMF that
involves no racist undertones is the desire for the IMF to be more transparent. The IMF has been
criticized for its secretive and coercive practices that often put the country in more economically
vulnerable situations.4 While this argument supports my view that the IMF is not working, the
reasons provided are due to inappropriate programs, not the racist feelings of the officials. One
could stretch this idea and say that IMF lenders set up the borrowing countries for just enough
success to stay afoot, but not enough to become superior to the western lenders; however, this
extends well past the intentions of their argument. Other studies have been conducted that
suggest IMF assistance leads to worse health outcomes for tuberculosis patients. 5 Again, this
argument illustrates the potentially harmful nature of IMF programs, but does so in a way that is
not related to discriminatory practices. There seems to be growing disapproval of the IMF
programs, however, the argument that the IMF is failing due to racist components is not the only
reason to criticize the program.

Testing Evidence
When looking for evidence that would support my argument against the IMF, I looked for pieces
that not only found flaws in the IMF, but found discriminatory flaws. The only evidence included
in the text that follows comes from sources that explain the failings of the IMF as a component
of their racist nature. Using sources that do not include the race factor leaves room for alternative
hypotheses to be confirmed. The only claims that will fully support my argument and not any
others are claims that discuss race within the IMF.
For a source to demonstrate its racial understandings of the IMF, I looked for a variety of
indicators. One of these was if the source included the voices of the countries being impacted by
the IMF, not just of those that held the most votes. This showed that the piece understood the
power of where you come from and the race you associate with since these differences alter
ones perceptions on the IMFs impact. Another indicator I looked for was comments that

4 Aslam, Abid. "Dissatisfaction Over IMF Policies." Inter Press Service. LexisNexis Academic,
9 Dec. 1997. Web. 1 Mar. 2016.
5 Stuckler, D., LP King, and S. Basu. "International Monetary Fund Programs and Tuberculosis
Outcomes in Post-communist Countries." PubMed. NCBI, 22 July 2008. Web. 7 Mar. 2016.
challenged perceptions of the superior versus the inferior. If the source acknowledged the impact
of developed nations feelings of superiority, I felt more confident in the sources discussion of
the race factor within the IMF since this showed an appreciation that white is not always right.

IMF Loans
While there are 188 members of the IMF, a select few countries represent a majority of
the vote. The United States has 16.8% of its votes, which is more than 16 times the vote of the
majority of the members. Just five countries, France, Germany, Japan, United Kingdom, and the
US, represent an astounding 36.34% of the IMF vote. 6 This allows theses countries to have
significant sway over IMF operations and makes it easy to assume that most of the decisions
made by the IMF are centered on the view of the developed nations or at the least, all decisions
receive agreement from the developed nations. The IMF is one of numerous ways that African
states receive aid from others, but the amount they do receive from this fund is significant
enough 7 to critically examine the financial relationship between Africa and developed nations.
To become a member of the IMF, the organization determines a quota for the country and
the country must pay one-quarter of this upfront and then the remaining is paid later. With these
quotas, the IMF has a variety of specific and detail-intensive lending and borrowing
arrangements. For low-income countries, the IMF has three programs called the Poverty
Reduction and Growth Trust (PRGT), the Heavily Indebted Poor Countries (HIPC) Initiative,
and the Catastrophe Containment and Relief (CCR) Trust. 8 IMF loans have to be paid back,
usually with interest, and there are certain contingencies placed on the loans. These conditions
seek to overcome the problems that led it to seek financial aid and ensure that the country will
be able to repay the Fund. 9 The IMF does its best to provide conditions that are country specific
and involve the countrys best interests 9, but I would argue that their ideas for structural reform

6 "IMF Members' Quotas and Voting Power, and IMF Board of Governors."International
Monetary Fund. N.p., 13 Mar. 2016. Web. 13 Mar. 2016.
<http://www.imf.org/external/np/sec/memdir/members.aspx>.
7 Stone, Randall W. "The Political Economy of IMF Lending in Africa."American Political
Science Review. Cambridge University Press, Nov. 2004. Web. 1 Mar. 2016.
8 "Where the IMF Gets Its Money." International Monetary Fund. N.p., 29 Sept. 2015. Web. 7
Mar. 2016. <https://www.imf.org/external/np/exr/facts/finfac.htm>.
9 "IMF Conditionality." International Monetary Fund. N.p., 24 Sept. 2015. Web. 7 Mar. 2016.
<https://www.imf.org/external/np/exr/facts/conditio.htm>.
cannot fully appreciate the differences in each country due to developed nations preconceived
racist ideas.

Evidence
Now the question is whether the IMF is an inherently racist program that is limiting the potential
of aid for Africa. Dambisa Moyo would agree with the above statement. Moyo believed the IMF
was correct in understanding the need to lend money to struggling nations, however, she argued
that the way in which the IMF was structured only worsened the debt and increased the aid-
dependence for the borrowing countries.10 From the outside, the IMF looks to be doing good and
necessary work that will promote development in African states. However, once the program is
examined closer, it is guilty of doing the exact opposite of its intentions. Instead of providing
loans that help African states take steps out of poverty, IMF loans perpetuate the cycle of poverty
and derail sustainable economic growth. 10 Moyo uses the term maintain[ing] the status quo to
describe the implications of giving aid to Africa. 10
These arguments from Moyo tie in well with Dowers theories of race. The IMF takes on
a position of superiority by deciding what loans to give and how to give them. Using Dowers
theory of confirmatory attribution2, by the IMF leaders seeing itself as superior, they view the
countries in which they give loans as inferior. These feelings of superiority allow the leaders of
the IMF to believe they know the best ways help poverty-stricken nations out of poverty.
However, this hierarchical position causes them to suggest ideas that will maintain the status quo
as an effort to retain their superior status. While IMF loans appear to provide the means for
countries to become independent these loans only increase dependence, which illustrates the
inherently racist nature of the system. If countries no longer needed the support of the IMF, then
the developed countries most involved in the IMF would loose their superior basis. Ultimately, in
order for developed nations to continue viewing themselves as superior, they need other
countries to remain in poverty.
There is an organization called G-24 that seeks to increase representation and participation of the
developing countries for issues on the IMF agenda.11 This group understands the complex nature

10 Moyo, Dambisa. Dead Aid: Why Aid Is Not Working and How There Is a Better Way for
Africa. New York: Farrar, Straus and Giroux, 2009. 19-28. Print.
11 "About G-24." The Intergovernmental Group of Twenty-Four | G-24. N.p., 2015. Web. 14
Mar. 2016. <http://g24.org/about/>.
of the developing countries situations and aids in increasing this understanding among IMF
policymakers. 12 Upon review of the IMF in 2005, Yilmaz Akyz of the G-24 found that there is
no sound rationale for the Fund to be involved in development and trade policy. 12 The author
goes onto conclude that the IMF cannot be multilateral or provide equally for all of its members
until it stops depending on a select few countries for resources. 12 Since this group actively
engages the perspective of the nations that are experiencing the backend of the IMF process, they
are able to see past what the leaders of the IMF want to see. The role of oversimplification from
Dower is easy to bring in. By the G-24 focusing on teaching the IMF policymakers about the
complexity of developing nations, they show an understanding for the way in which
policymakers often lump together the countries they give loans to as the poor other. The leaders
of the IMF perceive themselves as the in-group, being in a position of wealth and able to
distribute that wealth out, and this creates out-group discrimination among the countries
receiving the loans. As a result, all nations that are in crisis and in need of a loan from the IMF
are perceived as similar and having made comparable mistakes. This gross oversimplification
leads to bad policy suggestions since each nations situation is unique and will require a different
approach. The distance the leaders of the IMF put between themselves and the nations that
borrow from their funds creates a worsened understanding of the other side and only detracts
from the success of their programs.
A conference at the University of Vermont in 1995 called, Challenging the World Bank: Whos
Really Running Our World?, featured speakers from government positions and individuals with
experience on the IMFs impact. There were many comments that provided insight on the
relationship between racism and the IMF. One such comment was made by Representative
Bernie Sanders by stating that IMF policies exacerbate poverty due to its power laying in only
the hands of a few. 13 With the entire IMF program being lead by a small subset of its members,
there is growing evidence for the existence of an in-group and an out-group within the IMF. The
in-group makes the decisions and views themselves as superior to the out-group. The out-group
receives the loans and are depicted to be inferior by the in-group. This perceived superiority

12 Akyz, Yilmaz. "Reforming the IMF: Back to the Drawing Board." (n.d.): Iii-Vii. 2005
United Nations Conference on Trade and Development. EconPapers, Nov. 2005. Web. 1 Mar.
2016.
13Kaufman, Chuck. "50 Years of World Bank & IMF: Enough!" Peacework. Proquest, May
1995. Web. 7 Mar. 2016.
leads to the small subset of individuals making decisions without regarding the opinions of the
inferior out-group. By not involving those who are directly affected by the IMF to contribute to
its programs, the organization will not be able to understand all the conditions that cause their
situation of crisis, which will ultimately lead to an inadequate attempt to alleviate poverty.
Another speaker at this conference, Peggy Law, made a perceptive comment that connects well
to Dowers view on dehumanization. She states during the conference that once the human is
taken out of economics, everything is much easier to justify.13 By dehumanizing the other it is
simpler to view the them as in the wrong and yourself as in the right.2 This is what the leaders of
the IMF did with the nations that needed loans. They stopped viewing these countries as people
and instead saw them as something to fix and a way to get a return on their investment. For the
IMF leaders to justify their conditional policies, they degraded those receiving the loans until
they no longer looked like humans but like dollar signs.
While these three examples illustrate the racist operations of the IMF and help to make
sense of the minimal impact aid has had in Africa, I am not convinced that discriminatory
practices are the entire story. First, the racist underpinnings brought up in these examples can be
explained both as cognitive and as motivated practices. While I found a motivated argument for
each case that shows the leader of the IMF acting on their racist beliefs to maintain their superior
status, an argument can be made that while the IMF leaders were racist, they did not intend to act
this way. This idea comes from Zoltn I. Bzs with his belief that it is a cognitive process for
individuals to want to distinguish their group from another group.14 Bzs claims that prejudices
are formed through cognitive limitations and people therefore have little control over these
misperceptions.14 While racism being a cognitive process does not entirely negate by argument, it
does allows for both a motivational and cognitive interpretation, indicating there is room for
alternative hypothesizes. One such alternative hypothesis is also found in Bzss argument and
that is the idea that race within the IMF is epiphenomenal. I believe that race did influence some
of the decisions made by the IMF and has limited the success of the organization, however, I
believe that there are other factors that limit the IMF as well. By opening up the search to
include article that oppose the IMF without needing to discuss its racist connotations, a more
complete picture is formed. These article show the IMF is not only hurting the economies of the

14 Bzs, Zoltn I. "The Color of Threat: Race, Threat Perception, and the Demise of the
Anglo-Japanese Alliance (1902-1923)." Security Studies. Routledge, 1 Nov. 2013. Web. 7 Mar.
2016.
borrowing countries, but the people as well, with decreased health outcomes and worsening job
markets. 15 Race is part of the failing equation for the IMF, but there are other variables that are
necessary to consider for a holistic understanding of its impact.

Conclusion
As often the case with international relations, one theory is unable to explain why there
has been minimal impact from the aid provided to Africa. There is a clear case for racist
underpinnings within the role of IMF loans, however, the myriad of alternative theories for the
IMFs shortcomings suggest racism is not the only answer. The implications that come from this
paper are not meant to suggest ending loans to African states or even ending the IMF. I believe
that providing countries in crisis with a loan can have immense benefits to their ability to get
back on their feet. However, these loans must be lent with caution. The lenders must check their
own racist prejudices and engage the country to understand how the loan could best be used. The
first step is becoming aware of our racist tendencies. Whether we discriminate through a
cognitive process or a motivational process, providing aid to other countries will bring out racist
ideas and we must use our knowledge of these propensities if we hope to challenge them. Then
when moving forward to work with other countries, we must always involve alternative theories
in order to refrain from choosing the most available racist theory. I believe that by addressing the
racist undertones within the IMF, the loans will not only be more successful for the borrowing
nations economy but for the nations overall quality of life.

15 Stuckler, David, and Sanjay Basu. "How Austerity Kills." The New York Times. N.p., 12 May
2013. Web. 7 Mar. 2016.