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Kill Aid!

8 July, 2009 | 18 comments | Category: Africa, book snip, Current Affairs, peace & conflict, Senduq - Nani

 

Kill Aid! No more funny paper

(picture courtesy of agent_of.chaos)

by Nani

Finally! Phew! The debate has started… It’s a long time coming. Many Africans have often raised this issue among themselves; it’s a well-known secret.

Aid, as we know it today, is it hurting or helping Africa? Does it really reach the people it’s meant to? Does it even reach the continent at all, or is it true that it simply goes from one bank account to another, from the West’s to the Swiss belly of the African elite? … Well there are enough cases to purport that Aid has very rarely achieved its objective – i.e. to alleviate poverty, achieve long-term economic growth, and create jobs. Think of a country that owed exactly the amount of money its president had tucked away in the Swiss banks. No, Aid as it is implemented in Africa today has never, and will not ever achieve prosperity.

My first encounter with the now famous and rightfully acclaimed economist Dambisa Moyo was when I watched her interview on Charlie Rose of March 25th. I accidentally run into the interview online a day or two later while I was aimlessly wandering on the web. That same night I bought Dead Aid from Amazon.

This book is an absolute MUST read. Niall Ferguson who wrote the forward for the book gives us the perfect reason for why we should seek out and read the book, “The simple fact that Dead Aid is the work of an African black woman is the least of the reasons why you should read it. But it is a good reason nonetheless.”

Ferguson is quoted saying …“ It has long seemed to me problematic, and even a little embarrassing, that so much of the public debate about Africa’s economic problems should be conducted by non-African white men. From the economists (Paul Collier, William Easterly, Jeffrey Sachs) to the rock stars (Bono, Bob Geldof), the African discussion has been colonized as surely as the African continent was a century ago.” — The author herself thanks organizers of her recent debate at The Munk Debates in Toronto, Canada for ‘allowing (her) to say a few things about the state of (her) continent, even though (she)’s not a celebrity

;) Loved her feistiness there!

One particular country she likes to pick on is Ethiopia, -- and rightfully so. Some statistics show that about 90% of our annual budget is based on Aid, and our government does not seem to have any intention of changing that any time soon. Why should that be a problem? The simple fact that it (Aid) removes the basic incentive in a society is the simple answer. As Moyo put it – we all live in a world of incentives, individuals, governments, policy makers all are incentivized to do the right thing. Remove that and you lose the basic motive that binds all elements together. In an Aid system governments have no incentive to respond to their people. You vote, so what? The government does not rely on tax money for its existence so what its own people say has no bearing whatsoever on its agenda. Moyo points to the startling fact that NO country on earth has ever recorded meaningful economic growth or reduced poverty on an Aid based system. Yet, our government seems to support the notion that more Aid is the only way that the country can survive, (and I’m left thinking – when are we ever going to think beyond survival?) and is seen asking and insisting on getting more donor money year after year. Since the famine that preceded Haile Selassie I’s overthrow we have been known as the begging bowl of the world. But will that change anytime soon? Likely not.

What is also persuasive about Moyo’s argument is that she points to specific facts of how and when Aid has been effective, for Aid has its place. But like everything else, when it’s in check. She also offers specific alternatives countries should consider if they’re serious about developing, which is really what is lacking in most African governments. And despite all the rhetoric, the donors themselves are not really serious about being agents of development in Africa. They have chosen to ignore all signs and evidence that Aid does more ill than good, but they still choose the easy way out, offer and when given accept little band-aid solutions to shut quibbling rumors that the rest of the word does not give a whit. — And so they only give us funny papers, papers we’ve never seen, but are supposed to be thankful for, and are worth nothing! ‘Cause the harsh truth is ‘Africa is to development, what Mars is to NASA. No one really believes that Africa will ever develop, and no one really believes that we can live on Mars’

This post is to thank Ms Moyo for her outstanding work, for attracting attention to the subject and showing the true character of Aid – that it is really ‘the disease of which it pretends to be the cure’ (Karl Kraus).

 

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18 comments to “Kill Aid!”

Semhal, July 12th, 2009 at 1:06 am:

  • Interesting….well we can’t blame the donors…it’s not their responsibility to “develop Africa” unless we Africans come up with a plan and become the “go getters”…nothing will happen. Although this is a very complicated problem which has its own intrinsic reasons for every nation, Here is what i see mostly
    1. I think the underlying reason the adminstration keeps on seeking more and more Aid is because they are”content”.
    You can’t jump higher if you are content where you are..if you don’t seek and work hard and truly believe that all of your people (regardless of ethnicity) need sustainable peace and bread, change cannot come…and this attitude needs to come from everyone, not just the government.
    2. I think Laziness and corruption are eating our continent and discouraging those who wish to do the right thing.
    3. Pride: i have met many many people who are too proud to take “small jobs”, what is that about?
    4. Greed: There are millions of beggers walking next to millionairs….i don’t know why we can’t be more generous so that the ‘Aid’ can go somewhere else.
    5. Aid is going to building fancy government buildings…development does not necessarily mean fancy building, expensive furniture, glass doors, and pretty cars…may be if the fancy buildings and new cars are replaced with a more cost effective ones…well…
    6. And sometimes i wonder may be it’s just not God’s will yet…but even so, i think he wants us to keep trying and learn from our mistakes:)

Nani, July 12th, 2009 at 5:50 am:

  • Hey Semhal,
    Thanx for the detailed comment, here’s what I think;
    I completely do not buy the “It’s not God’s will yet”ideology, it’s simply too easy to point to our ‘unlucky’ stars and shrug and go ‘oh well there’s nothing we can do about it’. I think the most fundamental thing that we’re missing is that it’s not our fate.

    And you’re absolutely right, we can’t blame donors, but what I was trying to say was that they have knowingly chosen to NOT be AGENTS of development, as they have a huge influence; they can’t do the work, and quite honestly I don’t believe they should, Africa is for Africans, Ethiopia for Ethiopians … When there is evidence after evidence that the policies they are pushing forth is a complete failure though it leads you to question why do they continue to push for more Aid when they know it’s not getting the job done, when they know it’s not reaching its target?
    I so stand by what you said about the current administration being too content. Even with all the money put in there’s still food shortage, and Aid makes up the majority of our yearly budget. I agree, it needs to come from everyone, not only the government, in fact I think it’s highly unlikely that it would come from the government, as you said it’s simply too comfortable and content
    As to Laziness and corruption, Corruption is definitely a huge problem in Africa, although I find there are different ways of looking at laziness, when there are no jobs, you stay at home, but that’s because you can’t find a job, not because you’re lazy, and what Moyo shows and other experts as well, is that Aid makes all of that worse, it may not have been the cause, ’cause corruption is everywhere! but it sure makes it much worse, because again, it takes away the incentive for the government to respond to its people, as she (Moyo) explained it in one of her interviews when the government does not rely on its people’s tax money, there’s no reason why it should respond to its people’s needs, Aid brings about negative externalities among them Corruption, absence of jobs
    You’re right again, we Ethiopians are too proud, but I find that most people are hesitant to take ‘small’ jobs only when in Ethiopia, look outside and it’s a completely different story, I really don’t get that
    As for Greed, it’s getting worse, much worse, the life disparities between the rich and the poor is simply un-believe-able! But I don’t believe generosity is going to do the work, because generosity relies too much on the goodness of one’s heart, and let’s face it we’re all selfishly motivated individuals. I don’t believe a lasting solution can be had based on people’s disposition to be generous, call me a skeptic but that’s true.
    Fancy cars and buildings are a great example of wasted Aid, perhaps they’re better than sending the money straight to Swiss banks ’cause at least something is being done in the country, but too often it’s the few elite government officials that own them, they’re just funny papers making funny man made mountains ;)

Semhal, July 12th, 2009 at 5:02 pm:

  • Well said Nani… and i believe that even one person with the right motive can bring change. That’s why we all need to strengthen our knowledge and go back out there to bring about attitude change and/or replace the faulty leaders…. All the outsourced knowledge and wisdom needs to go back . Even if it means to pick up one person or few people , that’s where everything starts …right nanisha:PPPPPP

Nani, July 13th, 2009 at 3:37 pm:

  • Too right Semhal! So how about you and I set a date … for the exodus back? :)

Semhal, July 13th, 2009 at 5:13 pm:

  • anchi…..sarcasm meche gemersh???…lol

Nani, July 13th, 2009 at 5:46 pm:

  • LOL honestly I was not being sarcastic I was dead serious, am I that unbelievable ? :(

Semhal, July 16th, 2009 at 1:33 am:

  • Giddy up sister!

tpeace, July 17th, 2009 at 3:35 pm:

  • Great discussion.
    I have one thing to add and that’s the issue with the donors…and their incentives. The interesting scenario is that while people may be doing things from the goodness of their hearts – there is no way their NGOs/board of trustees/individual incentives can bring lasting change to African countries – because simply: the work gets done sustainably only when it is intrinsically tied to the Africans themselves and THEIR own incentives.

    here is a fantastic article written by The Shell Foundation elaborates on this point:
    6.1 Propositions for the international development community: Enterprise solutions to poverty
    http://bit.ly/j7BCR

    ‘The ‘failure’ of many projects in our portfolio and elsewhere can often be traced directly to the fact that the project partners were not focused on best
    meeting the needs of their real customers but were responding to other incentives – including donor agendas and their own professional interests’

    ‘The challenges involved in actually
    implementing it are obviously not. It requires donors and recipients to think very differently about how they do what they do. More importantly, it would lead them to work within a risk–return relationship and ‘consequence accountability’ structure similar to that which exists between an investor and a start-up business, and between shareholders and management – cultures that are foreign to many donors and grantees.’

Dr.Ethiopia, July 23rd, 2009 at 4:07 am:

  • I am glad that someone has taken the time to touch on this subject. I have, for a while now, been infatuated with the Aid argument. There are no winners here.

    We are to fail without the assistance of the western world, however you look at it. We need aid because countless lives depend on it. We need fair-trade but the westerners, again, wouldn’t let that happen. Weare in a catch 22 here. We can’t achieve independence from aid, unless the western world is to do business with us under the fair-trade.

    No fair trade = Endless need for aid

    Disadvantages of Aid

    Dependence

    When a country can continuously count on others to bail it out, it loses its need to reform internally. Aid, therefore, becomes the reason to kill all motivation to improve from within. Public officials lack any incentive to institute any macro-economic reforms when the amount of money available for the government to spend doesn’t depend on the performance of the economy.

    Corruption

    Aid from wealthy countries hardly reaches the intended beneficiaries. Instead, aid has widened the insatiable appetite of corrupt leaders, often becoming the way to get-rich-quick for corrupt strong-men. Transparency International, an organization that fights corruption on a global scale, has consistently ranked Sub-Saharan African countries among the governments with the highest levels of corruption worldwide.

    Markets

    Government-to-government aid often consists of surplus commodities and money that is earmarked to purchase goods from the donor country. This is particularly true of the United States. Due to price supports and production subsidies, U.S. farmers produce much more than Americans can consume. The government ends up with the surplus and donates it to poor countries. And guess what? This food aid has caused markets for locally grown farm products to collapse.

    Now tell me, why on earth do we need AID ???

    Ethiopia (and Africa in general) are like American consumers, always in debt, always worried about filling the immediate need and less worried about the long term risks.

    What is happening in Africa today is the biggest crime and robbery since slavery and colonialism. We are meant to fail, by design. Choice depends on the freedom to choose, and if you are shackled with debt, then you don’t have the freedom to choose. People in debt become hopeless, and hopeless people hardly do something about their problem.

    What we need is a fair trade, and not aid that is designed to keep us subordinate.

Nani, July 24th, 2009 at 4:23 pm:

  • Very interesting article there tpeace, and it’s true that projects are not focused on meeting specific challenges, because they weren’t designed to meet them in the first place (that’s me talking boldly) but as Dr Ethiopia said the Aid system was meant to fail by design, I’m not questioning the donors’ higher moral ground or their intentions, but when it comes to implementation the priority was never really to develop the continent, or to eradicate poverty,

    “The problem is not so much that development has failed (in Africa), as that it was never really in the agenda in the first place.” —Claude Ake, Democracy and development in Africa

    The Aid system came about after the success of the Marshall plan in Europe was such a success and mostly in Africa after independence, but it did not come without strings attached. Take the cold war …
    As to your arguments Dr Ethiopia, I agree we are on a catch 22 here, BUT it’s time to re-think our long-term plan, we need Aid today, but we can rid ourselves of it, so long as we are committed, which is really what is lacking in our administration and the donors’. The West are pretty influential, but even they are losing their strong hold; The Chinese are our friends (Moyo dedicated a whole chapter to this argument), the difference between the Chinese and the West is that the Chinese are there to do business, of course you can argue they don’t have a very impressive human rights record … but ensuring that is up to the individual African governments, so we do have alternatives. Doing business with the West is not our only option.
    On the disadvantages of Aid, I couldn’t have put it better, one thing I would like to point out though, when farmers in the west have surpluses and they “donate” their left overs, [and I think they rarely 'donate' their surpluses they dump it at a much reduced price, unless in emergency food Aid instances, in effect making their products cheaper and more competitive than the locally grown] First off it’s not fair trade as they receive government assistance, and then they bring their surpluses and dump it on the third world market at a much lower price than the locally grown products. The West’s producers don’t lose much because of government subsidies, but the locals lose their market, because now their produce is more expensive and can’t compete in the market and in effect the local economy is affected as people lose their jobs, no market for local produce no jobs.
    But our hands are tied, by Aid, we can’t refuse it because we need it at least in the short term, and to rid ourselves of it in the long term we need committed and responsible administration that is willing to sacrifice short term comfort to long term success

Mamitu, July 31st, 2009 at 2:16 pm:

  • I love Dr. Moyo,

    I got her book as a birthday present and have been reading it. Aid has been destroying Africa just like welfare programs have destroyed the very fabric of African American society. I am opposed both to an open ended commitment Aid and continuous welfare. Aid makes the African governments answerable to the Aid giver and not the very people the government is supposed to administer. IMHO Aid should be short and targeted to help fix a temporary problem.

Nani, August 4th, 2009 at 12:03 am:

  • Interesting analogy, Hernando de Soto, the Chilian economist who was debating with Dr Moyo was specifically pointing to the fact that the same policies – Aid, failed welfare programs and overall failed policies have made Indigenous people in the very same country that the West (donors) are from to live in a vicious cycle of poverty. I believe his exacts words were something along the lines of …”You don’t have to go too far, look at your Indian reserves, …”
    And I couldn’t have summarized how Aid should be any better,
    What I found even more puzzling is that Paul Collier seemed to oppose what Moyo was suggesting; that African countries should rid themselves of Aid, in how long a time they should do that may vary, but still open-ended commitments should stop. Well I’m reading his book right now – The Bottom Billion, it’s a really well written book, but almost everything he says agrees with what Moyo is saying, I’m getting the impression that he is not (and others) are not comfortable to suggest any tangible solutions/action. One thing I’ll give credit for is Moyo’s not afraid to suggest alternatives based on evidence, while I can’t say the same for the other economists.

Pablo (yo), September 7th, 2009 at 12:02 pm:

Nani, September 22nd, 2009 at 2:29 am:

Sofi, September 24th, 2009 at 3:10 pm:

  • very insightful…loved reading your thoughts Nani, the comments are fascinating as well.

Nani, September 25th, 2009 at 5:09 am:

  • Thanks Sofi!

    Welcome back! You’ve been Missing In Action/Inaction for a while … look forward to your next blog … hopefully coming soon?

senduQ » A Saturday at the Wharton Africa Business Forum, November 30th, 2010 at 9:28 pm:

  • [...] Most recent dialogue in the international development sector points out the pitfalls of Dead Aid, and the distortion that charity and ‘free stuff’ introduce to an economy and a [...]

spacefog, December 10th, 2010 at 1:05 pm:

  • First of Aid is an industry now. Its not the delivery of grains to a half awake hungry kid. Its more of a systematic approach to development. It has its own studies in which we all have or look into to specialize. It has consultants who build program , train ppl and design strategies. I don’t think just because I person is working in development doesn’t mean they have to be poor or get paid crappy. Its professional serivces they are provided and they should be compensated well for that.
    There are a number of reasons as to why aid has not been effective in africa but that doesn’t mean it should be replaced with bond selling BS. how do we make it effective and make sure it reaches the right people in a way that doesn’t make them dependent is a question to look into further.

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