In the past 50 years, more than $1-trillion in development-related aid has been transferred from rich countries to Africa. But a growing body of critics argues that the result has been utter failure.
The newest voice in the debate is that of Dambisa Moyo, a young economist who was born and raised in Zambia. She has degrees from Harvard and Oxford, and has worked for both Goldman Sachs and the World Bank. Fans and critics alike call her the anti-Bono. In her new book, Dead Aid , she argues passionately that aid from the West has been a disaster for Africa.
Ms. Moyo will be in Toronto on Monday for a Munk Debate on the proposition that foreign aid is doing more harm than good. Not surprisingly, she will argue the affirmative, along with Peruvian economics Hernando de Soto, who was in Canada just a month ago. Opposing them will be Canada's Stephen Lewis, former United Nations special envoy on HIV/AIDS in Africa, and Paul Collier, director of Oxford University's Centre for the Study of African Economies.
In a conversation this week, Ms. Moyo offered a taste what Mr. Lewis and his debating partner can expect.
Your argument is pretty shocking to a lot of people. What's so wrong with aid?
Look at the evidence. Over the past 50 or 60 years, things in Africa have got dramatically worse. In the 1970s, only 10 per cent of Africans were living in dire poverty. Now, it's over 70 per cent. Aid was supposed to alleviate poverty and promote long-term economic growth, and it has done neither. Africa has been shearing off from the rest of the world.
You argue that foreign aid is positively malignant. Explain.
Aid introduces a whole host of negatives into the economy. Corruption is just one of them. It causes inflation and creates an enormous debt burden, with no increase in living standards. It kills off the export sector. But the most fundamental problem is that it allows African governments to abdicate their role.
In most of the world, heath care, education and infrastructure are provided by government. But in Africa it's provided by aid agencies. African governments today depend on foreign aid for 70 per cent of their budgets. So there's no accountability to the people. Even if governments don't do their job, they can stay in power because they are underwritten by the donor community. The big problem with aid is that it disenfranchises Africans.
So why don't we just hold them to account and stop lending money if they don't perform?
The aid system only works as long as the aid donors are handing out money. If they don't hand out the money, they know they'll be cut back. So governments in the West are incentivized to give out the money, and African governments are incentivized to take it. And Western voters demand that aid go to Africa without understanding the political implications.
In the 1960s, we tried to target aid toward infrastructure growth. In the seventies, we focused on poverty. Then we tried democracy and institution-building. Now, we're into the 2000s and it's basically become a joke. We have thousands of NGOs across the continent, each with their own mandate and agenda. And now the celebrities have taken over the policy-making. And now we have a society of a billion people represented by rock stars.
We deserve better than that. We need African leaders to tell us what they're going to do, not celebrities. The system of economics and development that the world is imposing on Africa has never worked anywhere. Not a single country has reduced poverty and increased long-term economic growth by relying on aid.
Where are the African leaders in this debate? Do any of them agree with you?
Paul Kagame, the President of Rwanda, is also very much against aid. He does not believe you can build a society by relying on foreigners. He's sensitive about this because, during the genocide in 1994, the international community turned its back on Rwanda. He argues that it doesn't make sense to rely on foreigners to provide you with health care, education and so on. What happens when their own economies turn down? They'll slash their aid budgets.
