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.
You've really got under the skin of a lot of prominent people. Bob Geldof's advocacy organization has been trying to mobilize opposition against you. Jeffrey Sacks has even accused you of endangering lives. He said your ideas are "absolutely pernicious, and could lead to the deaths of millions of people." Are you telling us that all those people are wrong?
People like me who question the status quo always suffer personal attacks. So they say that I'm trying to kill African babies, or I'm not black enough. Jeffrey Sachs has said, "This woman has got no children living in rural Africa." But neither does he! I have significant obligations, taking care of my extended family across the African continent.
I am saying not only that they are wrong, but they know they're wrong. Sachs taught me for a year at Harvard. When it comes to Africa, he espouses a completely different solution from anywhere else in the world. They're being intellectually dishonest. They know a lot of money goes to corruption. The know many African leaders have abdicated their responsibilities. But instead of arguing against things like trade barriers, they'd rather spend their time doling out aid and capitalizing on Western guilt. Guilt and sympathy.
But aren't you just handing people an excuse to abandon Africa altogether?
Not at all. The predicament of Africa today is not an African problem. It's a global problem. Over 60 per cent of the population is under the age of 24. They're disaffected, with no job opportunities. These kids could go anywhere on Earth. What they desperately need is jobs. Things like malaria nets may make the West feel good, but they are Band-Aid solutions. They will not make Africa grow at the rates we need to get out of poverty.
So the remedies are ... ?
The second half of my book is all about solutions … trade, microfinance, foreign direct investment. That is the mix that is tried and tested across the developing world. Look at China. It has moved 300 million people out of poverty with no foreign aid at all.
You also say that China has done more for African development than all the Western aid agencies put together.
Let's get real. Their attitude toward Africans is completely different. It's not couched in sympathy and pity. They want to make money and create jobs. The Pew survey recently went to get evidence that Africans are upset with the Chinese. But they're not. The Chinese are providing jobs and helping to create a sustainable long-term society. We're not idiots. We're adults. We can run our own society. But Western pity is a terrible burden. It's hard to raise a teenager to be a teacher or engineer when the whole world's telling him he can't do it.
There are a lot of people in this country who are motivated to help Africans in some truly useful way. Are you saying there's really nothing they can do?
There's lots of things you can do. You can check out kiva.org - for as little as 25 cents, you can support an entrepreneur anywhere in the world, a shoemaker in Ghana, for example.
You're critical of the West for always focusing on the bad news about Africa. So, what's the good news?
There's lots of good news. We've got a very young, vibrant population who are hungry to be part of the modern age. They want to be on Facebook and Twitter.
The continent now has 15 stock markets. The International Monetary Fund is forecasting that Africa will grow by 3 per cent this year, while most of the rest of the world is contracting.
We've got an amazing proximity to Europe. We've got natural resources and a relatively sparse population. We speak English, so in terms of business opportunities, it should be a natural place to go.
But first, we have to end the pity party.