Foreign Aid

A third way

Adrienne Villani
Beyond Profit Magazine
June 8, 2009

If you are at all interested in the “development conversation,” you could not have missed the Canadian doubles match that was played last week between Dambisa Moyo and William Easterly on one side versus Jeffrey Sachs on the other. It has been more exciting than watching Roger Federer win his first French Open (albeit without defeating Rafael Nadal at Roland Garros) and tie Pete Sampras’s record of 14 majors. What started out as a critique of Dambisa Moyo and her new book “Dead Aid”  by Jeffrey Sachs morphed into a full-on war – Jeffrey Sachs [PDF] and the pro-aid establishment vs. William Easterly and the aid skeptics. (Somehow, Moyo and her book have been lost in the fray.) It started on the Huffington Post but crept into mainstream media and even Twitter!

These two scholars have tried to make the aid debate black and white.  If you are pro-aid, you are somehow painted as a rent-seeking idealist (ironic, I know). If you are against it, you somehow want Africa to starve, both literally and metaphorically. But the debate around aid needs to be viewed on a spectrum: there is more to this than meets the eye. In fact, although aid has its obvious shortfalls, it broadly works: poverty would be higher in the absence of aid. We must look beyond reasons why aid has failed to reasons why aid has not worked better.

(I also happen to believe that Jeffrey Sachs and William Easterly are not diametrically opposed, but often, for shock value, purposely “misinterpret” each other’s arguments to make themselves appear as formidable foes. Jeffrey Sachs advocates a “Big Push” to get countries out of “poverty traps.” For Sachs, aid IS the solution. But even Easterly never finds that aid is BAD, it just simply has not been THAT good.  They may even get along at a cocktail party!)

But this post is not about the merits and pitfalls of aid. While I respect both Jeffrey Sachs and William Easterly immensely, I wonder if they should not take the lead in moving the debate forward, to concentrate on constructive solutions.

We need a new approach.  If our primary motive is to lift the “bottom billion” out of poverty, social enterprise is a way forward. It is a proven approach through which we can make lasting improvements in the lives of the poor, which is critical for the world, critical for the world economy, and critical for humanity. Why it has not even been touched upon in this debate (with what seems to be the “world” watching) confounds me.

Dambisa Moyo briefly touches on the topic in her May 26 blog entry [PDF] on the Huffington Post. “Finally, with respect to Mr. Sachs’ remark that I would see nothing wrong with denying US$10 in aid to an African child for an anti-malarial bed net — even labeling me as cruel; I say, if working towards a sustainable solution where Africans can make their own anti-malaria bed-nets (thereby creating jobs for Africans and a real chance for continents economic prospects) rather than encouraging all and sundry to dump malaria nets across the continent (which incidentally, put Africans out of business), then I am guilty as charged. Don’t forget that the over 60 percent of Africans that are under the age of 24 need jobs not sympathy.”

Why has this not been jumped on?  There is a way forward! Social enterprise gives people jobs. It empowers local communities. It builds skills and capacity. It creates mechanisms of ownership. And, perhaps most importantly, it gives people a sense of control over their own destinies. For example, the Acumen Fund Investee, A to Z Textile Mills [PDF] , which has decreased the cost of production of their long lasting anti-malarial bednets from $7 to $5, has also raised the standards of living for their workers and their families through the creation of better paying jobs. Everyone benefits!

The good thing about this debate is it is getting people to think about these issues. It is putting a face on poverty. It is mobilizing interest. But instead of tearing each other’s views of aid apart, can’t we find a common ground because at the end of the day, we all want the same thing – for there to be less suffering in this world. Isn’t the concept of social enterprise and the constructive role it can play in local job creation and public good, something that we can all appreciate and agree on?

To follow this debate as it unfolded:

Read the original article at the Beyond Profit Magazine website [PDFver here]

Categories: Foreign Aid

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