2 posts tagged “aid”
I apologize for not really exploring the effect that economic aid has had in Africa. So I have done a lot of digging and figured that I would shed some light on the reality of aid in Africa. Do you remember Dambisa Moyo? She is the author of Dead Aid (you should read it if you care about this sort of thing-and you should), and a rather intelligent lady.
Moyo, who earned her doctorate at Oxford and has worked for the World Bank and Goldman Sachs Group Inc., focuses her criticisms on low-interest loans and grants from governments and multilateral lenders. Together, these make up more than 50 percent of the national budget in many African states.
“Africa is addicted to aid,” she says. “Like any addict, it needs and depends on its regular fix, finding it hard, if not impossible, to contemplate existence in an aid-less world.”
The West has funneled $1 trillion to Africa over the past 50 years, Moyo notes. Yet more than half of sub-Saharan Africa’s 700 million people live on less than $1 a day, and the poverty rate doubled between 1981 and 2002, she says, citing World Bank figures. Real per-capita income today is lower than in the 1970s.
Cutting off aid won’t affect most Africans, Moyo argues, because they don’t have access to it to begin with; only their governments do. The continent is full of aid-funded roads and schools that stand uncompleted while government leaders ride around in brand-new Mercedes-Benzes, stuff money into foreign bank accounts and travel abroad, sometimes in private jets.
Outright grants and low-interest loans are all too easy to steal, she says. Aid makes African leaders more responsive to Western donors than to their own people and engenders conflict by making government worth fighting over, she adds.
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It is my opinion that aid needs to looked at differently. Rather than being given on the basis of promises of reform, initiatives, and improving the quality of life, I think that it has to doled on based on merit. The only entity that has been able to display large-scale, consistent progress in regards to relief in Africa has been the Bill & Melinda Gates Foundation. They look at it like a business, and those with the best plan are awarded the aid. By tying the aid to something that is tangible, it therefore has real effects. I think that this is the only way to dole out aid in Africa, otherwise I would have to agree that we are just throwing our money away.
There is no doubt that Africa is a place in need of a lot of help, in a lot of different areas. In this post, there are two issues that I want to focus on however, and to a large degree, they are mutually exclusive.
The first of which is that the G-8 countries (G-8) that had pledged to supply $21.5 billion in aid to Africa by 2010 to help the continent get out of poverty and help with healthcare and education. With less than a year to go, there is a bit of a problem however. So far, only $7 billion has come through, with the remainder nowhere to be found. The two largest culprits are Italy and France, but there is more to this than the mere shirking of financial obligations.
The leaders of the world's countries didn't anticipate the economic maelstrom that swept the globe when they made their pledges. They were forced to spend billions of dollars bailing out their own economies (which was a contentious move in and of itself-and if you read this, then you know how I feel about it). The horizon doesn't look much better for anyone's economy either.
"As governments look to cut deficits, they will look to cut all parts of their budgets, and these parts that are to help the poorest may or may not be cut as part of that process," Bill Gates told reporters in London on Thursday after the release of the DATA report. The Bill & Melinda Gates Foundation operates in numerous African countries, and its $27.5 billion endowment makes it a far more significant donor than foreign governments are in some countries.
Why Wealthy Nations Are Stiffing Africa
There is, and has been for some time, a severe problem with aid in Africa. There is a fierce debate amongst aid and government officials about whether or not money for Africa is even worth it. There was a best-selling book (a very good one, and I highly recommend it) called Dead Aid written by Zambian economist Dambisa Moyo in which she argues that $1 TRILLION of Western aid during the last 50 years has actually left Africa more poor and dependant. Her sentiments were echoed by Rwandan President Paul Kagame, who wrote in the Financial Times last month that "as long as poor nations are focused on receiving aid, they will not work to improve their economies." But others have pointed out that carefully directed aid can play a critical role in removing obstacles to economic development. Gates told reporters that projects that focus on agriculture and health are "measurable and very impactful. The money had made a difference."
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I think that it is important to note two things not mentioned in this discussion however. There is overwhelming evidence that many of the African leaders have funneled vast sums of this money into their own personal Swiss bank accounts. Just as in any country, power corrupts. I also find it interesting that China isn't mentioned at all. China has-and does-donate more money to African aid than all of the G-8 countries COMBINED. Granted, it has one of the better economies currently, but it is a country that certainly has its own issues to deal with as well. I just find it rather curious that they are left out. To me, it is an acknowledgement that the G-8 countries are a relic of a bygone era. Formed with countries that had power and influence during the World War II era, I think that it is antiquated when looked at from a modern viewpoint that recognizes that China is one of the most powerful countries in the world.
Even if they (the leadership) are dicks.
