Regardless of the feasibility of her suggestions, Dambisa Moyo, a former World Bank Consultant and author of “Dead Aid” is at least bucking the system somewhat and proposing a new direction for Africa. In her book Ms. Moyo reveals some pretty shocking statistics:
- More than 300 million people are still mired in poverty after decades of international aid.
- In 1960 GDP for Africa as a whole was equal to that of East Asia – by 2005 East Asia’s GDP was five times higher.
- Over the past 30 years the most aid-dependent countries in Africa have suffered an economic contraction of 0.2% per year.
- Total aid to Africa over the past 50 years exceeds $1 trillion.
The problem is dependency, argues Ms. Moyo, which in turn provides little incentive to develop sustainable country-specific growth models. The aid spigot is a rushing river that signals to many African countries, “Hey, no matter what happens, we’ll still be pouring money in no matter what.” The “business of aid” employs 500,000 worldwide and once Bono and countless other celebrities jump in compassionate pleas for additional financial support typically result in the blind issuing checks to the blind.
The most controversial argument in Moyo’s book is her belief that democracy is not the key to solving Africa’s problems. Rather, she posits a “benevolent dictator” who can push forth reforms might be better suited for many African countries at the moment. My rolodex of “benevolent dictators” is full of cobwebs so maybe you all could offer someone up.
Nevertheless, I like Ms. Moyo’s challenge, and her focus on economic growth being the prerequisite for democracy rather than the other way around has some legs. A long-term focus on the creation of bond markets (in the past 10 years 43 developing nations have issued international bonds and only three were from Africa) is an excellent suggestion.
More than anything this is a lesson in incentives. The continent is accustomed to aid and this is not good. Ms. Moyo references Botswana and South Africa as two shining stars that have prospered by not allowing themselves to be dependent on aid, but I’d argue the correlation of less aid to their respective development paths is far from clear.
All of this leads to hard decisions that will not be viewed as compassionate. Yet, where do we realistically go from here? Am I a bad person if I don’t give to Bono? Does anyone with any significant political, economic, or social clout want to lead the charge for less not more?