Foreign Aid

Africa’s ‘dead aid’

Patricia Adams
Financial Post
June 2, 2009

In one corner, we have two well-meaning members of the Western establishment, whose advice over the decades has, as much as anyone’s, brought the Third World to its knees. Their view: The Third World needs more of their advice.

And in the other corner we have two people from the Third World, one from Africa, one from South America, who tell these Westerners, and all the paternalistic people they represent, to stop the harm: Stop undermining our economies with food aid that destroys our farmers’ ability to compete, they say. And stop the other development aid whose main effect has been to empower our dictators against our people by supplying the dictators with the largesse needed to maintain their secret police while rewarding their cronies and themselves.

The foreign aid champions are Paul Collier, Oxford author of The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, and Canada’s own Stephen Lewis, former Canadian ambassador to the UN and special envoy on African crises. Last night they debated Peru’s Hernando de Soto, the economist whose widely acclaimed book, The Other Path, in the 1980s delivered a body blow to the foreign aid industry, and Zambia’s Dambisa Moyo, Collier’s former student and the author of The New York Times best-seller, Dead Aid: Why Aid is Not Working and How There is A Better Way for Africa, a new book that so powerfully threatens the foreign aid industry that many of its leading exponents are mobilizing to stop her.

Last night’s match, in fact, was an early round in an emerging global debate between the choices on offer:Will it be top-down development, with Western governments dispensing development aid to their Third World counterparts, as Collier and Lewis and various rock stars prescribe? Or will development be allowed to rise up from the grass roots, as de Soto and Moyo recommend? The top-downers, sensing that a fight to the finish may have begun, have rapidly ramped up the rhetoric.

The United Nations’ human development report office accuses Moyo of “blaming the fire engine because it is near the fire.” Harvard’s Jeffrey Sachs, perhaps the world’s leading aid guru, finds her ideas to be “absolutely pernicious, and could lead to the deaths of millions of people.” Uganda’s Infectious Disease Institute claims she would cause “death on a genocidal scale.” And Bob Geldof’s charity, ONE, warning that Moyo’s proposal “would quite literally lead to the deaths of millions of Africans,” has even launched an e-mail campaign to enlist African NGOs to counter Moyo.

To date, the campaigns to discredit Moyo — whom Time magazine just dubbed one of the world’s 100 most influential people–have failed, with some organizations, like Zambia’s Centre for Infectious Disease Research, rallying to her side. Many if not most people in the Third World consider foreign aid to be a joke, and are incredulous when they learn that Westerners think it actually does some good.

But Moyo is also making headway among people in the west. Her allies are the facts: Africa received $1-trillion in aid over the last half-century with disastrous results. When aid to Africa was at its peak, between 1970 and 2000, Africa’s poverty rate actually shot up from 11% to 66%. All told, the countries that have been most reliant on aid saw their economies go backward — they experienced negative growth in GDP.

The Stephen Lewis-Paul Collier camp, in other words, has it backwards. The top-down government aid that they specialize in kills national economies and African livelihoods. Moyo’s Dead Aid is aptly named. – Patricia Adams is executive director of Probe International and author of Odious Debts: Loose Lending, Corruption and the Third World’s Environmental Legacy.

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