Breaking the myth of aid. Dambisa Moyo’s remedies

Marie Martine Buckens
The Courier
September 30, 2009

The best way for Africa to overcome its underdevelopment is by benefitting from international flows of investment – rather than aid programmes. Especially not aid, emphasises Dambisa Moyo, a Zambian economist, whose book, Dead Aid, already figures in the top ten best-seller list in the United States. The book is subject to much controversy… or debate at least. The Courier encourages comments from readers to this heated debate that has been a talking point in international institutions (the European Commission in particular) for many months.

“So there we have it: sixty years, over one trillion dollars of Africa aid, and not much good to show for it. Were aid simply innocuous – just not doing what it claimed it would do – this book would not have been written.  The problem is that aid is not benign: it’s malignant. No longer part of the potential solution, it’s part of the problem – in fact, aid is the problem.”

The pitch is given. Dambisa Moyo has launched a battle against today’s widely practiced and praised current policy that sets aid as the preliminary condition to any development policy. She is at war against her former professor, American economist Jeffrey Sachs – father of the Millennium Development Goals – a man who has undertaken the task of taking Africa out of its current state of poverty, unhealthiness and illiteracy, armed with billions of dollars.

Aid, argues Dambisa Moyo, does not eradicate some of Africa’s first rank scourges such as civil wars and corruption. Quite the reverse: development aid encourages corruption and allows some regimes to stay in place artificially. Because of the significant amounts that aid invests, it triggers envy and can stir up ethnic tensions, which sometimes lead to civil wars.

Circular logic

Better still, aid is intrinsically linked to upholding the entire corpus in charge of cooperation: World Bank (10,000 staff) and the International Monetary Fund (2,500), to which she feels it would be right to add the 5,000 other persons from United Nations agencies, more than 25,000 attachés to NGOs, charity organisations and the plethora of other experts of governmental aid agencies. “In total” she writes, “around 500,000 persons, the population of Swaziland”. And she continues: “their bread and butter depends on this aid, just like the officials who receive it”. The economist goes further still and fustigates the logic of fear that animates the donors who worry that in the event that poor countries cannot finance their programmes, they will in turn be unable to reimburse their debts to donor countries: “it is specifically this circular logic that allows aid to perpetuate its ploy”.

Thus, it is not by chance, pursues the author, if between 1970 and 1998, a period when aid to development was at its peak, poverty increased from 11% to 66%. It seems that aid suffers from one essential flaw: it destroys any incentive to evolve, to reform and to develop. The solutions that Dambisa Moyo proposes are essentially based on the “capacity of countries to create richness”, like their Asian counterparts. She stresses that the priority should be given to the respect of property rights and quotes the exemplary case of Botswana, a country that has experienced an average growth of 6.8% between 1968 and 2001 because of its policy favouring economic growth, which includes opening up to international competition, a non-inflationist monetary policy and moderate fiscal pressure.

Furthermore, the economist suggests that American and European governments should be pressurised to end the massive subventions that they grant to farmers. African peasants could thus access global markets and live off their production, which would be far more efficient than to grant them development aid.

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