Editor's note: The above photo was taken by The Cord's Photography Manager,Nick Lachance. Used with permission.
On Friday, November 13th, Dambisa Moyo came to Waterloo to speak at UW's Hagey Hall. Moyo is a Zambian-born economist with a Masters degree from Harvard and a PhD from Oxford, who has worked for Goldman Sachs and the World Bank.
In April, she was named as one of Time Magazine's 100 Most Influential People (#37). She has debated Paul Collier and Stephen Lewis. And the book she was speaking about, Dead Aid: Why Aid Is Not Working And How There Is A Better Way For Africa, is a New York Times Bestseller. In short, she's kind of a big deal. Needless to say, I was excited to see her speak.
Dead Aid has drawn a great deal of criticism and instigated a lot of debate, particularly within the development community. It was the first book I bought upon my return from Sierra Leone, and my interest was no doubt piqued in large part because of my first-hand experience in development work.
And the fact her book has drawn such strong reactions is by no means surprising. Her central thesis is that aid has not only failed to help African nations escape poverty, but actually helped perpetuate further poverty. Moyo doesn't shy away from condemning the aid industry, and her criticisms are couched in a rather no-nonsense vernacular. Clearly, she didn't write this book to make friends.
But I think a lot of the criticisms levelled at Moyo stem from knee-jerk reactions that fundamentally miss the book's point. As is unfortunately common, most of the people asking questions at the lecture lacked even a basic understanding of Dead Aid, attacking Moyo for failing to offer alternate solutions to addressing the ills of the African continent, and thereby broadcasting to everyone in attendance that they hadn't read the book at all. In reality, the entire second half of the book does just that, arguing that rather than ineffective aid transfers that create a culture of aid dependence, African governments would benefit from market-based solutions.
I'm not really concerned with laying out the exact arguments of the book, as those who are truly interested will presumably read it themselves. But an extremely basic overview of her suggestions includes entering into capital markets; attracting foreign direct investment; cultivating strong ties with the world's largest emerging power, the Chinese; removing barriers to profitable trade, particularly amongst fellow African countries; and exploiting the opportunities of microfinance.
Otherwise stated, Moyo looks to cold, hard economics as the way out of poverty for the continent from whence she came. It's not nearly as warm and fuzzy as the aid "solution", nor does it allow Westerners to give themselves a moralistic pat on the back for their benevolence in nobly helping poor Africans who supposedly cannot help themselves.
And so, it really comes as no shock that it's met with some resistance. But the reality is that there are far more impoverished Africans in the world today than there were before the West started funnelling billions of dollars in aid transfers, so perhaps it's time we tried to understand why, as uncomfortable as it may make us feel.
First, it's important to distinguish that Moyo is not railing against all kinds of aid. Though she acknowledges problems with both emergency/humanitarian aid, "which is mobilized and dispensed in response to catastrophes and calamities", and charity-based aid, "which is disbursed by charitable organizations to institutions or people on the ground", she nonetheless allows them to escape her vitriolic fervour.
Instead, it is systemic aid - both bilateral (direct government-to-government transfers) and multilateral (transfered to individual governments via institutions such as the World Bank) - that Moyo picks apart with surgical precision. For me, the book's most compelling condemnation of this bilateral and multilateral aid was the idea that it props up corrupt governments.
In theory, these aid transfers come with conditionalities that must be met, regarding how and to what ends the aid is dispensed. But the reality is that we've created such an immense industry built around aid that the inherent systems discourage stemming the flow of money - even when conditionalities aren't met.
... there is simply a pressure to lend. The World Bank employs 10,000 people, the IMF over 2,500; add another 5,000 for the other UN agencies; add to that the employees of at least 25,000 registered NGOs, private charities and the army of government aid agencies: taken together around 500,000 people, the population of Swaziland. Sometimes they make loans, sometimes they give grants, but they are all in the business of aid ... seven days a week, fifty-two weeks a year, and decade after decade.
Their livelihoods depend on aid, just as those of the officials who take it. For most developmental organizations, successful lending is measured almost entirely by the size of the donor's lending portfolio, and not by how much of the aid is actually used for its intended purpose. As a consequence, the incentives built into the development organizations perpetuate the cycle of lending to even the most corrupt countries. Donors are subject to 'fiscal year' concerns ... Any non-disbursed amounts increase the likelihood that their subsequent aid programmes will be slashed.- "Chapter 4: The Silent Killer of Growth", page 54
In other words, systemic aid flows directly into the pockets of sometimes corrupt governments, who can choose to use or abuse it with remarkable ease and few repercussions. Unlike in the private sector, where a government could screw around once before the money is cut off, aid allows them to become increasingly corrupt, content in the knowledge that they're likely going to keep getting money regardless.
Of course, Moyo's clarion call for the abandonment of the current aid model would be considerably less compelling were she not offering another road. Consider this:
In December 2005, at the Second Conference of Chinese and African Entrepreneurs, China's Premier, Wen Jibao, pledged that China's trade with Africa would rise to US$100 billion a year within five years. Forget the capital markets, forget FDI [Foreign Direct Investment], forget the US$40 billion a year aid programme, and forget trade with any other country in the world - this is just trade with China. Assuming that nothing else changed, that could be US$100 billion in 2010, US$100 billion in 2011, and the year after that, and the year after that, and the year after that.
By 2015, just five years later, that would be US$500 billion of trade income - 50 per cent of the trillion dollars of aid that has made its way to Africa in the past sixty years. The difference is, of course, one is laced with bromide, the other steroids.- "Chapter 8: Let's Trade", page 114
I am by no means an expert in economics, and in fact often find myself wildly indifferent to it, given that my capitalist impulses rarely go beyond how to buy my next batch of CDs. I'm in no position to give Ms. Moyo a peer review in any academic journal. But if I understand what she's saying at all, it makes a lot of sense. And it builds on modes of thought that began to germinate for me while in Sierra Leone.
About four months into my time in Salone, I attended a movie night put on by IMATT. One of the films they showed was a documentary about Freetown around the time it gained its independence in 1961. The footage was interesting, but also shocking and more than a little depressing.
The country had double-decker buses and a functioning train system. There were movie theatres. The roads were well maintained. It was home to the first university in sub-Saharan Africa, where countries that are now considered leaps and bounds ahead of Sierra Leone, like Nigeria and Ghana, would send their best and brightest. In short, it was bubbling with promise.
Fast forward nearly fifty years and the movie theatres were gone. The train system was no more. Many of the roads remained, sure, but few looked as though they'd been touched since. It was a society that had clearly regressed.
Obviously, I'm not advocating that a return to colonialism is the answer. But there were certainly days when it seemed a tempting option.
My work with JHR doesn't fall into the category which Moyo so vehemently opposes in Dead Aid. JHR seeks to build a country's knowledge and skills in the field of media, thereby enabling a well-functioning fourth estate, one of the crucial components of any healthy political system. I believe in that work. But on days where you don't help one of your reporters produce a story that makes a difference, it can be deflating. At times, you wish you could just point to a well-paved road and say, "That's what I contributed."
In essence, this is what the Chinese have been doing across the continent in recent years - investing a ton of money in building roads and infrastructure. Their motives are not altruistic, but self-interested, as making the continent easier to do business in has tangible benefits for them. But something tells me Africans don't really care about the motives. If anything, they'd probably prefer someone whose end goal is creating business opportunities that will lead to jobs.
At its core, Dead Aid derives its strength from Moyo's willingness to work from somewhat unconventional assumptions - like, for example, that self-interested actions need not necessarily have negative impacts on others. Or take this excerpt about the ideal political conditions for economic growth:
The uncomfortable truth is that far from being a prerequisite for economic growth, democracy can hamper development as democratic regimes find it difficult to push through economically beneficial legislation amid rival parties and jockeying interests. In a perfect world, what poor countries at the lowest rungs of society need is not a multi-party democracy, but in fact a decisive benevolent dictator to push through the reforms required to get the economy moving (unfortunately, too often countries end up with more dictator and less benevolence).- "Chapter 3: Aid Is Not Working", page 42
Here, again, Moyo counters prevailing wisdom that democracy = good and dictators = bad. Rwanda, though mentioned only in passing in the book, provides an instructive example, and one which Moyo drew on considerably more in her lecture.
Rwandan President Paul Kagame is a vocal opponent to reliance on aid. And though his regime, particularly in its earlier days, could more accurately be described as authoritarian than democratic, he's done a remarkable job of pulling his country - which was a veritable portrait of Hell on Earth just 15 years ago - up by its bootstraps. Of the four countries I visited in sub-Saharan Africa, it was easily the most developed. And Kagame is one of the only heads of state across the continent that Western governments advocate doing business with.
The bottom line is this: Dead Aid is not without its imperfections. At times, Moyo comes off as a little over-the-top, oversimplifying the issues to paint aid as the sole reason for Africa's underdevelopment. But on the whole, her arguments are compelling enough to forgive any overzealousness conjured by her passion to see her native Zambia and the rest of Africa move forward with the rest of the world.
My friends Brandon and Jen have first dibs on borrowing the book, but if you find the contents of this post even mildly stimulating, I highly recommend you add your name to that list.
