DEAD AID - gdsnet.org

1 DEADAIDWHYAIDISNOTWORKINGANDHOWTHEREISAB ETTERWAYFORAFRICAD ambisaMoyoFarrar,StrausandGirouxNewYorkF orewordbyNiallFergusonIthaslongseemedtom eproblematic,andevena littleembarrass-ing,thatsomuchofthepubli cdebateaboutAfrica' (PaulCollier,WilliamEasterly,JeffreySach s)totherockstars(Bono,BobGeldof), ,DambisaMoyoalsobringstohersubjecta rarecombinationofacademicexpertiseand're alworld' , ,shehasspenteighthighlysuccessfulyearsat GoldmanSachs, , ,asksMoyo,dothemajorityofsub-Saharancoun tries'flounderinaseeminglynever-endingcy cleofcorruption,disease,poverty,andaid-d ependency',despitethefactthattheircountr ieshavereceivedmorethanUS$300billioninde velopmentassistancesince1970, 'therichshouldhelpthepoor,andtheformofth ishelpshouldbeaid',therealityisthataidha shelpedmakethepoorpoorer, 'sstartlingwords:'Aidhasbeen,andcontinue stobe,anunmitigatedpolitical,economic,an dhumani-tariandisasterformostpartsofthed evelopingworld.

2 'Inshort,xForewordForewordXlitis(asKarlK raussaidofFreudianism)'thediseaseofwhich itpretendstobethecure'.Thecorrelationisc ertainlysuggestive, ,accordingtoMoyo, ,whenaidflowstoAfricawereattheirpeak,the povertyrateinAfricaactuallyrosefrom11per centtoa 'scrucialinsightisthatthereceiptofconces sional(non-emergency)loansandgrantshasmu chsameeffectinMricaasthepossessionofa valuablenaturalresource:it'sakindofcurse becauseit encouragescorruptionandconflict, ,Zaire'sPresidentMobutuSeseSekoisestimat edtohavestolenasumequivalenttotheentiree xternaldebtofhiscountry:US$ ,atleastUS$IObillion- nearlyhalfofMrica' ,asitisusuallyprovideddirectlytoAfricang overnments, ,perhapsmostimportantly, , , ,theyshouldencouragetheChinesepolicyofla rge-scaledirectinvestmentininfrastructur e.

3 (ChinainvestedUS$900 millioninAfricain2004,comparedwithjustUS $20millionin1975.)Third,theyshouldcontin uetopressforgenuinefreetradeinagricultur alproducts,whichmeansthattheUS,theEUandJ apanmustscrapthevarioussubsidiestheypayt otheirfarmers, , , 'sadviceandgranttheinhabitantsofshantyto wnssecurelegaltitletotheirhomes, ,DambisaMoyodoesnotpullherpunches.'Inape rfectworld,'shewrites,'whatpOOTcountries atthelowestrungsofeconomicdevelopmentnee disnota multi-partydemocracy,butinfacta decisivebenevolentdictatortopushthrought hereformsrequiredtogettheeconomymoving.' Inotherwords,rushingtoelectionsbeforeeco nomicgrowthhasgotunderwayisa question.

4 'Whatif,'sheasks,'onebyone, 'Thephrase'shocktherapy' ,asshepointsout,'justthirtyyearsagoMalaw i,BurundiandBurkinaFasowereeconomicallya headofChinaonapercapitaincomebasis'.Fore igndirectinvestmentandrapidlygrowingexpo rts,notaid,havebeenthekeytoChina' 'sprimarymotivationistoreduce,nottoincre ase, ' ~atmanagestobe,atoneandthesametime, ,andalotlessBono.) ,jxuForewordPrifaceInJuly1970,ninetystud entsgraduatedfromtheUniversityofZambia,i nthecountry'scapital, 'sfirstblackgraduates(includingsometenyo ungwomen), , ,fromdifferentpartsofruralcolonialAfrica :myfather,thesonofaminerinapartheidSouth Africa;mymother,thedaughterofamanwhowoul dlatertraintobea 'slanguage, (formerlyknownasNorthernRhodesia)hadbeen inde-pendentfromBritishcolonialruleforju stsixyears,andtheexcite-mentat ,upongraduation,mymotherhadelevenjoboffe rs(atthetimecompanieswereveryeagertoempl oyblackgraduates), scholar-shipattheUniversityofCaliforniaa tLosAngelesintheUSAand,verysoonafterward s, 'goalwasformyfathertofurtherhiseducation (latermymotherwouldcompleteanadvanceddeg reeinBritain)

5 , ,andwiththatcamea deepsenseofdignity, ,worked,andstudiedintheUSAforeightyearsa nduponmyfather' ,in1978,theypromptlymovedbacktoZambia,co nvincedthattheirfuture,andthefuturesofth eirXIVchildrelJ, :lstlycommittedtotheviewthattheycanhelpt heircountry,theircolltinent(contributing intheirownsmallways), ,andrisingtobeChairmanofoneofZambia' ~primary,secondary,andtertiaryschool; , 'tlastlong, ,likemyf:ltherbeforeme,IendedupintheUnit edStatesonascholarship, ,likebothmyparents, ,twoyearsdoingaMaster'satHarvard, ,I missedkeymomentsinmycountry'shistory-our politicalmovefromone-partystatetomulti-p artydemocracyin1991(itwasthefirstformerB ritishcolonyinAfricatohaveitspresidentre movedbyballotratherthanbullet),theoverha ulofoureconomyfromsocialismtocapitalism, ,everytimeIlooked, , , (ofcoursetherewerehighlypaidjobsavailabl e)

6 'suniversities, ' 'tloveherjob, 'thelped,butbecauseshe,likemanyothereduc atedAfricanswholiveabroadbutaredesperate toreturnhome,feelsthathercountrycontinue stoflounderina seeminglynever-endingcycleofcor-ruption, disease,poverty, ,whatisgoingwronghere?Tobesure, ;acollectionofoverfiftynationswithoftenv astlydifferenthistories,withpeoplesasdis parateasthoseofNorthAmericaandsouth-east Asia,varyinglinguafrancJs, ,SenegalisquitedifferentfromMalawi, ,whichwasnevercolonized?(Ethiopia'sdefea toftheItaliansattheBattleofAdowa,in1896, meantthecountryremained,forallintentsand purposes, )Andeconomically,besidesbothbeingcommodi tyexporters,tea-producingKenyaisstructur allyquitedifferentfromtheex-Belgiancolon yoftheDemocraticRepublicofCongo,whichrem ainsa largeminer, ( )areundoubtedlyquitedifferentfromthosefa cedbySwaziland,wherereputedlywholevillag eshavebeenwipedoutbytheravagesofthedisea se(prevalenceisaround26percentofthepopul ation- it wasalmost40percentin2003).

7 Butthereare,sadly, ,XVIp,.~ra(('..p,.~ra(('XVlltheextentofc orruption,theincidenceofdisease,thedeart hofinfrastructure,theerratic(butmainlypo or)economicshowing,politicalinstability, ,albeitinvaryingdegrees, ,war-tornSomalia, ,whichtodayhasa populationofaround10millionpeoplewithsev enty-twodifferentdialects,orinnext-doorZ imbabwe,where,withroughlythesamepopulati on,theindigenousAfricanpopulationcanbelo oselysplitintojusttwolargetribalgrouping s(ShonaandNdebele),Africa' ,itisworthrememberingthatinthelongtermno countryinAfricacan ,findinga sustainablesolutiontoMrica' ,I feela strongdesiretohelpfamilieslikemyown, haveoftenwondered,whileotheremergingregi onshaveostensiblyturnedthecornertowardse conomicprosperity, ; ,I offermyperspectiveonhowwegotwhereweare, ,it , {f; ,overUS$ ,onthebackofLive8,MakePovertyHistory,the MillenniumDevelopmentGoals,theMillennium ChallengeAccount,theAfricaCom-mission,an dthe2005G7meeting(tonamea few).))))}

8 ,UK'sPrimeMinisterofthetime,TonyBlair,re markedthat'TheStateofAfricaisa scarontheconscienceoftheworld',andthatth eWestshould'providemoreaid'as,thusfar,am idstthemultipleproblemsfacingAfrica, ,onebeliefcannotbecompromised:therichsho uldhelpthepoor, ,filmstars,rocklegendseagerlyembraceaid, proselytizetheneedforit,upbraidusfornotg ivingenough,scoldgovernmentsfornotdoinge nough-andgovernmentsrespondinkind,fearfu loflosingpopularityanddesperateto\\ ,touseTonyBlair'sOWI1words,'oneofthepeop lethatIadmiremost'.Aidhasbecomea S$[ trillionindevelopmentassistanceoverthela stseveraldecadesm;ldeAfricanpeoplebetter off? lct,;Krosstheglobetherecipientsofthisaid areworseoff; , <1imacentrepieceoftoday' ,andhasdoneso, ; ,andcontinuestobe,anunmitigatedpolitical ,economic, ,howtheworldwasgrippedwithanideathatseem edsorightbutwasinfactsowrong, willdismantletheassumptionsandargumentst hathavesupportedthesingleworstdecisionof moderndevelopmentalpolitics,thechoiceofa idastheoptimumsolutiontotheproblemofAfri ca' viciouscircleofcorruption,marketdistorti onandfurtherpoverty-andthusthe'need' 'spoorestcountries:onethatofferseconomic growth,promisestosignificantlyreduceAfri canpoverty.]

9 AroadIl:' ,morexx1l1troduetio/ldemanding,morediffi cult,butintheendtheroadtogrowth,prosperi ty, :whyitisright,whyithasworked,whyitistheo nlywayforwardfortheworld' , ,itwaseasytopainta ,corruptionwasram-pant,socialcapitalwasd ebilitated,tyrannicalstatesweretheordero ftheday, , , ,thesurgeincommodityprices-oil,copper,go ld,andfoodstuffs- ,onthebackofthemarket-basedpoliciesinsti tutedinthelate1980s,Africancountrieshave bene-fitedfroma 'smacro-economicfundamentalsontheup(grow thontherise,inflationdown,moretransparen t,prudent,andstablemonetaryandfiscalperf onnance).Anddespitethenewsheadlines, ,forexample, ,therehavebeensomenotablestridesinthepol iticallandscapeacrossthecontinent; ,offorty-eightsub-SaharanAfrican'countri es, (forexample,Angola,Ghana,Senegal,Tanzani a,Uganda,and,yes,evenNigeria)pointtoa !

10 FAidTheMyth(1 Aid5 Ifyousimplybelievethemediaheadlines,aret akeninbythesoundbitesandquips,youwouldal mostforsurehavemissedoutonsomekeymilesto nesinAfrica' ,theJohannesburgStockExchangeissub-Sahar anAfrica' 'sexchange,inwhatwasthenthecolonyofRhode sia,in1896,andthenWindhoek's,inpresent-d ayNamibia, (Botswana,Cameroon,Ghana,Kenya,Malawi,Ma uritius,Mozambique,Namibia,Nigeria,South Africa,Swazi-land,Rwanda,Tanzania,Uganda ,ZambiaandZimbabwe),withmarketcapitaliza tionin2008(excludingSouthAfrica)aroundU5 $200billion(aroundhalfoftheregion'sGDP). Whileitistmethatstockmarketliquidity-the easewithwhichaninvestorcanbuyorsellshare s- acrossmostAfricanexchangesisrelativelylo watanannualturnoverratioof6 percentin2008(versusanaverageof85percent inmore-developedemergingeconomiessuchasB razil,Russia,IndiaandChina),between2005a nd2006thegrowthinliquidity,measuredastur nover, , , (oneofAfrica'slargestagri-businesses,inv olvedintheproduction,processing,dis-trib utionandretailingofbeef,chickens,eggs,mi lkanddairyproducts))