Is aid killing Africa?
Over the past fifty years Africa has received approximately £1 trillion of aid from western countries, yet its dismal economic state remains. It seems inexplicable how such vast quantities of capital have contributed to no avail, surely this cannot be true. Nevertheless, the recent publishing of Dambisa Moyo’s book ‘Dead Aid: Why aid is not working and how there is another way for Africa’ sheds some light on the situation. Her most controversial and revolutionary proposal is to turn off aid altogether. Diverging viewpoints will no doubt arise as at first sight this appears on to maximise and prolong the suffering of those currently inflicted by poverty. Yet Moyo makes it clear that she is not ruling out all aid: she is concerned with ‘systemic aid’ which is passed between governments or global institutions. Many will have their qualms about pulling the plug on aid; it could potentially worsen the African predicament and set a precedent for discarding those desperately in need. Ultimately, the problem of Africa has yet to be solved and Moyo is offering solutions.
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£1 trillion of aid in the past 50 years has only caused the African economy to deteriorate
Financial contributions from the West have proved little help to Africa. Between 1970 and 1998 when aid was at its peak, poverty rose alarmingly from 11% to 66%. This statistic alone suggests aid is damaging to African welfare. Africa began borrowing money in the 1970s when interest rates were low, but a rising rates in 1979 caused 11 African countries to default. Even after restructuring, they fell deeper into debt. While the Marshall Plan had been a success, the same approach would not favour Africa; as Moyo contends, it lacks the required institutions to utilise capital efficiently. Debt servicing meant money was passing from the poor to the rich, leaving Africa in a precarious global position. Furthermore, countries which have rejected aid as an approach to combat poverty have prospered, indicating an additional correlation between aid and a ruined economy. (1)
While aid appears unsuccessful for Africa, the approach itself should not be criticised. Western countries have simply provided African countries with generous payments allowing them to stabilise their economy. It many aspects of life, emphasis is not often attributed to what resources are available but how they are used. Though more guidance on how to invest the money may have been useful, Africa itself must take responsibility for how it has spent the money. The evil behind aid is allegedly overreliance: a country becomes dependent on receiving more and more aid. However, a focused approach to budget and organisation of capital could certainly put aid to good use.
Africa deserves the opportunity to assert itself as an equal global partner
As Moyo and many others claim, Africa would benefit significantly more from enterprise-led development and involvement in business deals. In addition to delivering financial results, this would also encourage a pro-active approach on Africa’s part, allowing it to help itself prosper according to its own analysis of needs and objectives. Moyo asserts the Chinese have done more for Africa than the US, noting the impact of making equal business deals rather than patronising and preaching to governments. In China, African produce is welcome with a population of 1.3 billion and only 7% of farming land. Africa’s opportunity for success by such methods is evidenced from past conduct: its GDP has doubled from $130bn in the 1980s to $300bn today. (2) Rather than being pitied and condescended, Africa should be granted the independence to get back on its own two feet.
Africa lacks the resources for international trade. It is no surprise that westernised countries respond to its needs by throwing money in Africa’s direction; as a country in the business world it would simply slow things down. However, if Africa utilised aid payments effectively, there may be some potential for this position in future.
Furthermore, Africa’s trade with China is not an example that should be followed. Concerns have been raised as to China’s long-term interests in protecting its income by force. Moyo states this is irrelevant as we are only concerned with progress now. Surely there is no advantage in securing money temporarily for Africa, we need a solution that will last.
‘Systemic aid’ is detrimental to African society
While aid threatens the economy, it also poses hazards for society in Africa. As Moyo contends, it merely fosters civil war as people fight over scarce resources which cannot feasibly be equally distributed. According to Dr Napoleoni, $1.6bn of $1.8bn in aid received by Ethiopia in 1982 – 1985 was invested in military equipment. (3) Aid is limited in respect to where it comes from; some donors refuse to make payments unless a proportion is devoted to a specified cause or if some act is done in return. Moyo refers George Bush’s demand that two thirds of his $15bn donation towards AIDs must go to pro-abstinence schemes. Such requirements further impede Africa’s ability to create a domestic policy and think for itself. Aid is solely to blame for its dependent state.
Resources will only be scarcer without aid; further chaos and corruption will ensue. There would be no need for fighting should resources be shared out equally. If aid is transferred to governments there is surely a centralised method of doing so; aid itself is not the problem. Africa could escape the issue of receiving payments according to donors’ vested interests by administering a list of causes for which it desires support, accepting contributions where demands fall exclusively within its categories. Again, aid is not detrimental but its careless distribution and allocation is.
Aid is donated inefficiently as a quick-fix solution
Moyo points out that intelligent African women with the potential to rectify the situation are pushed to one side by globally recognised figures promoting ‘glamour aid’ such as Bob Geldof and Bono. Nothing suggests such people have any expertise or knowledge in such a field; they are simply talking because they are listened to. While their efforts should not be dismissed, they undermine the powers of those elected. Large multiple payments make little difference to Africa’s economic climate. They are simply gut reactions stemming from our pity and guilt at African poverty, allowing us to sit back without getting too closely involved. Moreover, it is evident from aid given during the Cold War that intentions are not absolutely altruistic, but simply a tool to build alliances in the world of geopolitics.
While African politicians are often unheard in comparison to public figures and celebrities, at least someone is taking action. The Live AID and Live 8 concerts raised colossal sums for Africa in addition to enormous global awareness. Though these might not be the desired campaigners, it is surely better that some measures are taken than none at all. Furthermore, philanthropic contributions on such a vast scale are nothing but altruistic; the West is under no duty to provide Africa with such means but has done and continues to do so. While the Marshall Plan in the Cold War had its ulterior motives, it is unlikely that western countries would opt for a country so far away and lacking in resources when hoping to win over an ally.
The global economy in its current state facilitates this move
Though Moyo suggests banning aid completely, she also proposes borrowing from bond markets rather than international governments and institutions. The bond market allows for the buying and selling of debt securities, with no credit risks and higher interest rates. Such an arrangement suits Africa as aid lending has become too relaxed; more money is lent when a country defaults. Capital markets will not take the same attitude, which will help Africa to control its finances. The global economic downturn presents a valuable opportunity for plans to be reviewed. With a shortage of capital all round, Africa would benefit from resorting to market-driven interventions that have impacted hugely upon the economies of other countries.
Many would assert this is not a sensible position to take in the current financial climate. Many countries who have resorted to borrowing from capital markets are now starting to struggle. High interest rates are not desirable on any loan. Rather than expending further resources in interest, Africa would benefit from using the donations and transfers it currently receives in a more effective manner. While Moyo sees the recession as an opportunity for major reform, each country has immense problems of its own to tackle; sufficient time and effort could not be devoted to Africa as well.
Turning off aid is a controversial and capitalist experiment
Naturally our gut reaction to the prospect of turning off aid completely is one of disapproval. It is hard to see what effects such a move would have other than rapidly increasing the death rate. While Moyo suggests generations in the near future will benefit from this approach, the argument is unconvincing as 50% of the population in most African countries are under the age of 15. Currently, the most common response of the west is to contribute financially. If we put a stop to this, are we not just offsetting responsibility? Such an attitude should be discouraged as it conflicts with ideas of charity and interdependence. While aid may not be the perfect solution, it surely has its benefits.
Though the solution is one most would not dare to utter, the fact that Moyo herself is African and proposes a theory upheld by many Africans suggests this is no capitalist experiment on Africa. In addition, Moyo notes that while capitalism has exhibited many flaws in its history, it has also made the best efforts at combating poverty. Rather than leading to a further decline in poverty, the solution will provide security for the children of those currently experiencing the conditions. Moyo reminds us that African parents are no different from American parents in that they will be willing to comply with such a method despite the challenges it will pose to their own welfare.
This argument has been made before: why have such plans not been implemented?
Moyo is not the first to promulgate such a theory. William Easterly, Peter Bauer and inhabitants of Africa among other authors and philosophers have put forward similar opinions and solutions. It seems questionable why these proposals remain passive if there is such force to their arguments. Perhaps there are justifications as to why such plans would fail, or are people merely sceptical?
As Moyo argues, people are not listening to those who disagree with the practice of donating aid. Many of those who believe in such a theory have experienced the situation first-hand. African women, representatives and elected politicians are not recognised nearly as much as they should be. Instead, a vague altruistic awareness is raised by public figures in the US and UK who cannot properly confront the circumstances in Africa and assess what must be done. Furthermore, Moyo asserts the time is now ripe for review with huge economic changes being made globally. Perhaps in the past such opportunities did not exist.
Aid serves a purpose and should not be discouraged
While generous donations of aid may not have delivered the solution anticipated by the West, its attempts should not be ignored. Firstly, we learn through our mistakes and would not have been able to discover the effects of aid without testing it for a period of time. Secondly, philanthropy and charity should be supported and encouraged in a way which promotes interdependence rather than dependence. While African welfare and economy has diminished somewhat in the same years as it has received payments, this is not to say that aid has done no good. Clearly there is no absolute solution to such a high-scale issue. Nevertheless, balanced interdependence and careful management of resources could present opportunities in future for enterprise-led development, allowing Africa to prosper by itself.
It seems clear from Moyo’s analysis and justifications on a great number of issues as to the detrimental effect of aid that it is not a desirable solution by any means. While such contributions may inspire humane attitudes in society, this cannot alone validate the passing of vast quantities of finance to Africa which serve no useful economic purpose. Interdependence is something to strive towards but by relying on the help of western countries, Africa merely exhibits dependence. In order to gain recognition as an equal global partner, independence is crucial. Aid must be prohibited.
What do you think?