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Stop Giving Aid to Africa

Stop Giving Aid to Africa

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Development aid does more harm than good in Africa, says Zambian economist and author Dambisa Moyo, so we should stop it. She has the ear of at least one African president, Paul Kagame of Rwanda. 'Why should Bono be the one to determine economic policy in Africa?

It was during her studies at Harvard that she first started wondering why Africa is the only continent that is forever struggling. Later, as she was working on her thesis at Oxford, she tried to figure out why poor Asian countries like South Korea or Thailand managed to join the world of emerging nations when no African country did. For the next eight years, she worked for the US investment bank Goldman Sachs. Gradually her conviction grew stronger: Africa will never get on its feet unless it makes a clean break with the system of development aid.
Development aid does more harm than good in Africa, says Zambian economist and author Dambisa Moyo, so we should stop it. She has the ear of at least one African president, Paul Kagame of Rwanda. 'Why should Bono be the one to determine economic policy in Africa?

It was during her studies at Harvard that she first started wondering why Africa is the only continent that is forever struggling. Later, as she was working on her thesis at Oxford, she tried to figure out why poor Asian countries like South Korea or Thailand managed to join the world of emerging nations when no African country did. For the next eight years, she worked for the US investment bank Goldman Sachs. Gradually her conviction grew stronger: Africa will never get on its feet unless it makes a clean break with the system of development aid.

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Published by: Track and Trace Committee on Mar 12, 2009
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Dambisa Moyo has been described as 'the AyaanHirsi Ali of development aid'.
Photo Geraint Lewis
'Stop giving aid to Africa. It's just notworking'
Published: 6 March 2009 16:57 | Changed: 9 March 2009 10:10By Dick Wittenberg
Development aid does more harm than good in Africa, saysZambian economist and author Dambisa Moyo, so we should stopit. She has the ear of at least one African president, Paul Kagame of Rwanda. 'Why should Bono be the one to determine economicpolicy in Africa?
It was during her studies at Harvard that she first started wondering whyAfrica is the only continent that is forever struggling. Later, as she wasworking on her thesis at Oxford, she tried to figure out why poor Asiancountries like South Korea or Thailand managed to join the world of emerging nations when no African country did. For the next eight years,she worked for the US investment bank Goldman Sachs. Gradually herconviction grew stronger: Africa will never get on its feet unless it makes aclean break with the system of development aid.It is aid itself that is keeping Africa poor. This in a nutshell, is theargument Moyo develops in the first half of her book, Dead Aid, whichcame out last month. She is referring only to government aid, not toemergency humanitarian aid or charity. "Development aid simply doesn'twork," she says. "It was supposed to lead to sustainable economic growth
NRC Handelsblad http://www.nrc.nl/international/Features/article2172883.ece/Stop_g...1 of 5 3/12/09 12:51 PM
 
and a reduction of poverty. Name one African country where this hashappened."Dead Aid caused a sensation in Great Britain. Here was a young,successful, educated African woman trespassing in a world dominated bymiddle-aged white men. Economist like William Easterley and JeffreySachs. Rock stars like Bono and Bob Geldof. What's more: she wasarguing for pulling the plug on development aid."The danger is that this book will get more attention than it deserves,"wrote
The Guardian
. "Her proposal to phase out aid in five years isdisastrously irresponsible: it would lead to the closure of thousands of schools and clinics across Africa, and an end to the HIV antiretroviral,malaria and TB programmes, along with emergency food supplies, onwhich millions of lives depend.In
The Independent  
, Paul Collier, arenowned development expert andMoyo's former mentor, wrote that"Moyo is to development aid whatAyaan Hirsi Aliis to Islam," a referenceto the Dutch-Somali politician whosecritique of Islam has forced her intohiding. Like Hirsi Ali, she is criticizingthe system from the inside.Moyo is unfazed by the criticism. "Idon't see why Bono should be the oneto determine Africa's economic policy," she says during a hurried friedsquid lunch in Oxford. She is due at a reading shortly, and later tonightshe is aguest on Newsnight, the popular BBC current affairs programme,together with Nobel Prize winner Muhammad Yunus, the Bangladeshi whodeveloped the concept of microcredit.She speaks fast, without pausing for breath. "I am fairly aggressive," sheadmits. Asked about her age, she offers instead that the average lifeexpectancy in her country of birth is between 36 and 37. "I have passedthat particular milestone."If most people have focused on the first half of her book, Moyo herself thinks the really explosive material is in the second half. There she offersAfrican government a series of tools to balance their budgets without theneed for development aid: issue government bonds; attract foreigninvestment; boost exports by concentrating on emerging markets likeIndia or China; put remittance, the money sent home by Africans livingabroad, to good use... "It's not rocket science," she says. "Other countrieshave done it with success."
Your verdict about development aid is pretty harsh.
Moyo: "I'm really not saying anything new. In fact, I'm plagiarising. Iquote other people's research. As early as the sixties, Peter Bauer, thedevelopment economist, was describing development aid as 'a tax on poorpeople in rich countries that benefits rich people in poor countries'. He wasignored. In the world of development aid it is not a secret that it justdoesn't work. But aid organisations and celebrities like Bob Geldof arekeeping the myth alive. My own family suffers the consequences of development aid every day."
NRC Handelsblad http://www.nrc.nl/international/Features/article2172883.ece/Stop_g...2 of 5 3/12/09 12:51 PM
 
What are those consequences then?
"First and foremost the widespread corruption. The people in powerplunder the treasury and the treasury is filled with development aidmoney. The corruption has contaminated the whole of society. Aid leads tobureaucracy and inflation, to laziness and inertia. Aid hurts exports.Thanks to foreign aid the people in power can afford not to care abouttheir people. But the worst part of it is: aid undermines growth. Theeconomies of those countries that are the most dependent on foreign aidhave shrunk by an average of 0.2 percent per year ever since theseventies."
But surely donor countries have checks and balances. Theydemand good governance.
"But at the end of the day they let the African countries get away with it.World Bank research has shown that 85 percent of development aid wasused for other than the intended purpose. Donor countries are proppingup the most corrupt regimes. From 1980 until 1996, 72 percent of WorldBank aid went to countries that did not abide by the rules. The need fordonor countries to just keep on giving appears to be insatiable."
So why do Western countries keep on giving if it doesn't help?
"The cynical answer is: because it distracts attention from the tradebarriers they have erected in order to protect employment in the West.These trade barriers cost Africa an estimated 500 billion dollars everyyear. That's ten times the amount Africa is given in development aid. Andbecause they secretly don't believe that Africa is ever going to pull ittogether. They feel sorry for the Africans. So they buy themselves aconscience.
But hasn't Africa progressed enormously at the social level? In1960, fifty percent of children went to school. Now that's 82percent. Child mortality has dropped by more than half in the pastthirty years. Don't you care about this?
"You can pay school fees for a 12-year-old girl. You can makes sure shehas an education. You can say: look what development aid canaccomplish. But what good is that for the girl is she can't find a job aftershe leaves school? Because they are no jobs to be had. Every time I gohome to Zambia, there are more street children. They can read, they canwrite, they speak English. And the only thing they can do to make a livingis to hustle. More and more parents in the countryside are keeping theirchildren out of school. If there are no jobs in the cities anyway, they say,the children might as well start working on the land right away."
But isn't pulling the plug on development aid a recipe for massmortality?
"Only the elite will feel the pain. The poor won't even notice thedifference. It's not like they ever saw any of that money anyway."
Development aid experts like to point out that for decades the richnations have used development aid as a weapon in the cold war,as an instrument of foreign policy. Unlike you, They plead for moreand better direct aid.
"So where are we going to direct the aid now? In the sixties aid wassupposed to be used for big infrastructure projects. In the seventies it was
NRC Handelsblad http://www.nrc.nl/international/Features/article2172883.ece/Stop_g...3 of 5 3/12/09 12:51 PM

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