The problem is not that poor countries cannot manage to drag themselves up the development ladder, the problem is that they are actively prevented from doing so. Beginning in the early 1980s, Western governments and financial institutions like the World Bank and IMF changed their development policy from one that was basically Keynesian to one that remains devotedly neoliberal, requiring radical market deregulation, fiscal austerity, and privatization in developing countries as a condition of receiving aid.

We were told that this neoliberal shock therapy – known as structural adjustment – would help stimulate the economies of poor countries. But exactly the opposite happened. Instead of helping poor countries develop, structural adjustment basically destroyed them. Cambridge economist Ha-Joon Chang has demonstrated that while developing countries enjoyed per capita income growth of more than 3% prior to the 1980s, structural adjustment cut it in half, down to 1.7%. When it was foisted on Sub-Saharan Africa, per capita income began to decline at a rate of 0.7% per year, and average GNP shrank by around 10%. As a result, the number of Africans living in basic poverty nearly doubled. It would be hard to overstate the degree of human suffering that these figures represent.

Robert Pollin, an economist at the University of Massachusetts, estimates that developing countries have lost roughly $480 billion in potential GDP as a result of structural adjustment. Yet Western corporations have benefitted tremendously. It has forced open vast new consumer markets; it has made it easier to access cheap labor and raw materials; it has opened up avenues for capital flight and tax avoidance; it has created a lucrative market in foreign debt; and it has facilitated a massive transfer of public resources into private hands (the World Bank alone has privatized more than $2 trillion worth of assets in developing countries).

Poverty in the Global South is not just a static given; it is being actively created. And the striking thing is that these atrocities are being perpetrated under the cover of aid. In other words, not only does aid serve as a powerful rhetorical device that cloaks takers in the guise of givers, it also operates as a powerful tool in the global wealth extraction system.