Perpetual Castes, Poverty and Foreign Aid

The Wall Street journal today carried an op-ed piece which succinctly captured why India has been and remains the greatest foreign aid sinkhole imaginable.  

In their splendid piece “India Has a Caste System – for Drivers“, Shan Li and Aakash Hassan.  I won’t spoil your read but this sentence captures the essence and the absurdity:

Lawyers, government officials, journalists and even retired military officers are among a set of professionals who adorn their private vehicles with decals to publicize their occupations and the special status they say it confers.

Since its independence from Great Britain, India has steadfastly refused to make the policy changes which would lift its now billion plus people out of poverty.  While the greatest obstacle has always been refusal to restructure its agricultural sector, the traditional caste system and the inherited British class-based bureaucracy have never been challenged.

Donor nations bear a significant responsibility for this failure.  We keep pouring in the foreign aid which keeps India afloat.  India is the largest debtor to both The World Bank and the Asian Development Bank.  Processing and supervising lending to India has provided well-paid careers to generations of development and domestic Indian bureaucrats who are only too happy for India to remain poor.  

If we can’t DOGE foreign aid, what can we DOGE?

Over 60 years of India failing to achieve more than modest progress seems to have worked for everyone.

Even India’s elites seem to like it that way.  My counterpart at the Asian Development Bank was fond of telling me that it is the sovereign right of India to maintain its policies and not follow the policy advice of the United States.  

My rejoinder never changed.  I repeatedly told him that he was absolutely correct and I totally agreed with him.  However, I told him, it is the sovereign right of the United States not to pay for India’s resulting poverty.  

Unfortunately, my superiors at the Treasury did not feel the same way.  Nor do they now.  And that was 40 years ago. We keep the spigots wide open.  

The first Trump administration ponied up more billions to the World Bank and its sister institutions.  Reforms never came.  President Trump’s appointee to the World Bank presidency presided over a major expansion of Global Green New Deal lending and DEI policies and training.  Once the money was flowing, they ran him off.

It is well past time for this whole charade to be brought to an end.  Congress should include withdrawal from The World Bank and all of its sister “development” banks among many its program eliminations.  As explained here, this can be included in the coming reconciliation legislation.  Even in the Senate. 

Withdrawal from these institutions has a feature not found in other authorization changes – it does not run counter to the Byrd Rule that legislation be a germane to spending changes.

All of the agreements between the United States and these institutions provide for repayment of our contributions when we withdraw our membership.  The budget impact is a cool $70 billion revenue.

Do any readers think $70 billion is worth going after?  

Seems like a good idea. If we can’t DOGE foreign aid, what can we DOGE?