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When help becomes harm.

DEAD AID: Why Aid is Not Working and How There is Another Way for Africa

by Dambisa Moyo

ALLEN LANE, PB, 14.99 [pounds sterling]


We've heard the stories about aid being siphoned off by corrupt regimes. We also know that pouring more than a trillion US dollars into Africa over the past 50 years hasn't solved the continent's problems. But Dambisa Moyo doesn't just regard the provision of aid as inefficient. She thinks it's a malignant enterprise: 'an unmitigated political, economic, and humanitarian disaster.'

Moyo wants us to move beyond our guilt. When confronted with Africa's woes, we instinctively reach for our chequebooks. She has no problem with individuals responding to specific environmental or medical disasters, but sees something deeply corrosive and counterproductive in governments or the World Bank systematically doling out grants or loans on preferential terms. She insists that this process hasn't worked: there has been no reduction in poverty, there has been precious little sustainable economic growth, life expectancies are either stagnant or in decline, and literacy rates have tumbled. Worse yet, aid is the ideal prop for Africa's worst regimes, a source of easy and regular cash that stymies entrepreneurship and creates an environment in which there is no reason to set up the sorts of institutions and regulatory structures that might encourage foreign investment.

We've heard this argument before, mainly because it contains a sizeable kernel of truth, but we haven't often heard it being articulated in such forceful terms. This is a gutsy book, and what it lacks in nuance (and it lacks a lot), it makes up for in passion. Moyo's indictment of the past 50 years of aid-giving is compelling. She traces how shifting fixations and economic theories have influenced the kinds of aid conjured up by the West. In the 1960s, the focus was on large-scale industrial projects with a healthy dose of self-interest thrown in: as much about cultivating Cold War puppet regimes as about making things better. In the 1970s, our attention turned towards the alleviation of poverty, and aid went towards social services, agricultural improvements, literacy campaigns and mass inoculations. In the 1980s, everything fell apart when countries found out they couldn't service their debts and a grand 'restructuring' was called for. Into the bargain, in those neo-liberal times, the mantra of laissez-faire economics began to dominate the aid debate, and everyone became excited about free market solutions. The past 20 years have seen us putting the blame on corrupt leaders, insisting that democracy is the panacea that Africa requires, and making the bold suggestion that all we need to do is write off all the debts in one fell swoop.

It's a sorry tale, and Moyo has a wealth of ammunition at her disposal. Whatever form it took, aid didn't achieve most of its objectives. What to do instead? Here, Moyo shows herself to be a loyal acolyte of the market. Stop the aid, she says. Instead of accepting handouts, African governments should enter the global capital markets, issuing bonds to international investors. Africans should encourage direct foreign investment, especially from China. Africa should try to level the economic playing field so that its exports stand a fighting chance; the protectionist subsidies and barriers so beloved of the West should be challenged. And then there are the little things: let Africans abroad send money home without incurring hefty charges from middlemen; establish decent banks so people are encouraged to save; make it easier for people to do business in Africa by providing reliable legal institutions and getting rid of all the red tape.

And hey presto, everything will soon be set fair. Or will it? Moyo rightly warns against blind faith in the idea that throwing money at a problem is always the best thing to do. But is blind faith in the market--especially now--much wiser?

Moyo has written a well-informed book, and her passionate commitment to improving Africa's fortunes drips from every page. Regrettably, she glosses over the fact that not all aid is bad aid and she didn't come close to convincing me that her ideas might work. That said, the effort, since it enriches an important debate, is more than welcome. Provocative ideas, flawed as they might be, are precisely what we, and Africa, need. As Niall Ferguson says in his foreword: 'More Moyo, and a lot less Bono.' More specific, less doctrinaire Moyo would be even better: ill-informed rock stars could then focus their energies on singing slightly out of tune.
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Title Annotation:Dead Aid: Why Aid is Not Working and How There is Another Way for Africa
Comment:When help becomes harm.(Dead Aid: Why Aid is Not Working and How There is Another Way for Africa )
Author:Wright, Jonathan
Article Type:Book review
Date:May 1, 2009
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