By David Himbara
The World Bank’s research paper, Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts, ought to be read widely.
The paper explores money stashed mostly in secret offshore banks when aid arrives in poor countries. The researchers found that when the World Bank disperses aid to a low-income country, the amount of cash in offshore accounts controlled by the country’s elites increases by about 7.5 percent.
In the case of Rwanda, the ruling elites transferred US$190 million into offshore banks in a twenty-year period from 1990 to 2010. This means Juvenal Habyarimana and company were able to eat some of the US$190 million aid money for four years — 1990 — 1994 — while the Paul Kagame elites ate for 16 years from 1994 to 2010.
The World Bank paper does not cover the looting before 1990 and after 2010.
