LIVE AID OR DEAD AID?

Does aid to poorer nations deepen dependency or stimulate growth?  The debate has just intensified. 

 

Dambisa Moyo is making quite a stir.  The former Goldman Sachs economist argues in her book Dead Aid that the one trillion dollars pumped into aiding Africa’s economies since the 1940s has had no discernible effect on a region where the number of poor people has continued to rise.  Aid is said to foster corruption and deepen financial dependency on foreign donors.  Describing Africa like a drug addict who has been addicted to aid, she advocates a cold turkey solution to the problem.  If an American right-wing think tank had diagnosed an illness like this it would scarcely have registered.  Coming from a young female Zambian this idea has exploded onto the development scene and polarised opinion.

Criticism of Moyo’s thesis has centred on two points.  The first is the lack of an effective critique of exactly why aid has failed to deliver as well as hoped for.  The impact of the debt crisis and the IMF’s infamous structural adjustment programmes are not calculated, though both have left wreckage in their wake.  The other is an existing body of academic evidence suggesting that aid tends to raise growth levels, though establishing causality between aid and growth is difficult, hence its vulnerability to critique.
Dambisa Moyo
Dambisa Moyo

Richard Dowden, Chairman of the Royal Africa Society has also questioned what kind of impact the argument that aid is bad will make on the Christian tradition of giving.  Moyo says that her objection does not extend to humanitarian aid or direct giving to verifiable projects and we should take note of this because these are just the kind of allegations that are made to the Church when it seeks to raise funds for African development.  Her concern is with government to government aid.  Nevertheless, we can expect the cause of private giving to take a hit from her thesis, unfair though this may be.

Foreign aid has been worn as a badge of honour by many western governments – even George W. Bush was keen to be seen to offer it.  Moyo’s question: ‘what if African countries each received a phone call…telling them that in exactly five years the aid taps would be shut-off – permanently?’ is unlikely to get a sympathetic hearing when about five million African children do not reach the age of five because of preventable diseases which aid can – and does – treat.  Yet she raises issues which we have been conveniently ducked.  What really matters is improved terms of trade, but the Common Agricultural Policy stands in the way of a constructive European response.

Meanwhile, China is beginning to assert itself in Africa.  Beijing’s lack of scruple over human rights and labour conditions are adding an unwelcome dimension to Africa’s imagined future.  Any criticism that western nations make over this is likely to be met with impassive disinterest in the Far East and some incredulity in Africa.  For decades the United States and the countries of the European Union have supported many corrupt and unsavoury African regimes while sucking out natural resources in pursuit of strategic goals.  Our record, though vastly improved, has compromised us.

Richard Dowden is not alone is expressing confidence in Africa’s future.  Despite media caricatures there is renewed hope for the continent.  For the time being, however, the global financial crisis is likely deflect the major power priorities elsewhere, making the short-term harder in Africa than possibly anywhere else.  The historian Niall Ferguson has called for ‘more Moyo and less Bono’ in supporting Africa.  Not quite yet, perhaps.