Africa is addicted to aid. For the past sixty years it has been fed aid. Like
any addict it needs and depends on its regular fix, finding it hard, if not
impossible, to contemplate existence in an aid-less world. In Africa, the West
has found its perfect client to deal to…And like the challenges someone addicted
to drugs might face, the withdrawal is bound to be painful. Drug-taker or
drug-pusher, in the end someone has to have the courage to say no. (Dambisa
Moyo: Dead Aid, page 75)
Ms. Moyo concludes that for Africa to develop, all economic aid should be discontinued forthwith, or at the latest, over the next few years, certainly not more than five.
The thinking that informs her worldview appears to be, “Everyman for himself, God for us all.” For those like her who are fortunate enough in this life, this philosophy may well apply, but not every African has a doctorate degree, or has parents who have doctorate degrees. In fact, in many parts of Africa, having a secondary school education is a considerable achievement. There are those who think that Africa contributes little or nothing to the world’s economy and this backhanded swipe is their indirect way of expressing contempt for what they perceive as Africa’s lack of performance. Their true intention is to ensure that Africa is denied any help whatsoever, and these intentions are couched in grand statements such as, “We don’t want your pity,” or “We can do it ourselves,” or other similar statements. We have heard these kinds of statements before, they mean nothing. The truth is, we live in an interdependent world, and no matter how much we may consider the contributions from certain parts of the world as inconsequential, we still need one another, and when we help one another we all do well. When we are selfish, we all lose.
That is the very reason even the big American banks got “bailed out” in the current global economic crisis, despite the fact that these banks engaged in questionable banking activities that caused the crisis in the first instance; from questionable financial activities to creating what was essentially a housing ponzi scheme, as well as other dubious activities, it was nothing but sheer greed. The worst part was that unsuspecting home buyers and investors were lured into schemes that resulted in these individuals’ financial ruin, while the banks themselves raked in ungodly profits, until the bottom fell out from under them. United States Federal Reserve chairman Ben Bernanke said the US government had to bail out the banks that were considered “too big to fail” because of fear of a financial collapse that could have equaled or surpassed the Great Depression. Ms. Moyo should be well advised to take a page out of the Bernanke playbook. Helping those in difficulty for the good of all is not a crime, even in this case where those receiving the help engaged in activities that bordered on criminality. And helping those in dire straits largely through no fault of theirs should be considered a real virtue. It was President Franklin Delano Roosevelt who in 1937 said, concerning the economic crisis that led to the Great Depression, “We have always known that heedless self-interest was bad morals. We now know that it is also bad economics.”
The basis for Dead Aid is heedless self-interest. It is bad morals. It is also bad economics. While there are those who might find Ms. Moyo’s views attractive, the very thought that stopping all economic aid to Africa would usher in a new period of prosperity is totally repugnant with common sense. Particular attention should be given to the above quote from the book, because it is emblematic of the book’s tone and tenor. Whatever message she is trying to convey, it is delivered with a level of insensitivity bordering on callousness that is hard to comprehend. The problem with the book is not just its insensitivity, it is also that its policy prescriptions are based on fuzzy math, and even fuzzier economic analysis. Its reasoning is remarkably superficial, and there is near-total ignorance of the fact that politics and economics are inextricably bound, and that every nation’s economic performance is directly correlated with its social and political history.
For instance, she says that Africa’s political situation may not necessarily benefit from democratically elected governance. As a solution she recommends a “benevolent dictatorship,” and for an example of a benevolent dictator, she names Augusto Pinochet. One may ask Augusto Who? The same Augusto Pinochet, former military dictator of Chile. It is a baffling choice. Augusto Pinochet has been described by Chalmers Johnson, former CIA consultant and author of the book Nemesis: The Last Days of the American Republic (American Empire Project), as “probably the most odious dictator (5:00 minutes into video, see transcript also) on either side in the cold war.” As a former CIA consultant, Chalmers Johnson should know, and he reveals in the linked C-Span video that it was the CIA-backed coup that helped overthrow Chile’s democratically elected government of Salvadore Allende on September 11, 1973 and installed Augusto Pinochet as military dictator. During his regime, Augusto Pinochet introduced death squads under whose clandestine operations thousands of Chileans simply disappeared, vanished, never to be heard from again by their friends, families, and loved ones. This was the man who by the time he died in 2006, had over 300 criminal cases pending against him, for crimes he committed while in office as Chile’s leader.
And so in Dambisa Moyo’s vision for Africa, what we need is for Augusto Pinochet-type dictators to bestride the African landscape, wreaking untold havoc on longsuffering Africans, as if we have not had enough of that already. Maybe Dambisa Moyo is right. Maybe what we really need in Africa – since according to her we are not yet deserving of fully functioning democratic governments – are Pinochet-type dictators who will turn us into the proverbial sacrificial lambs and make some of us disappear so that economic salvation can rain down on us like manna from above, that is, if we survive the death squads long enough to enjoy the benefits of this great benevolence! Perhaps that is the only way we will be ushered into the promised land of economic prosperity. And the question that should automatically follow becomes, as she herself asks in her book, “Who will bell the cat?” Who will be the first to go? Since some of us must disappear, how many will have to make the ultimate sacrifice that the rest may prosper?
This would all be immensely laughable if it were not so dangerous. The truth is, the very term “benevolent dictator” is an oxymoron, and for anyone to believe that this is the way to achieve economic success is really the quintessence of naïveté. There is no such person in human history for the simple reason that dictators are never benevolent. We describe people as dictators usually because we find their actions malevolent, not benevolent. It is therefore utterly naïve to believe that there are those who can be dictators and be benevolent at the same time. If in doubt, take a look at all the dictators already firmly ensconced in Africa, and show the world a benevolent one among them. This recommendation of hers is again one of the many problematic ideas in her book.
Niall Ferguson, who wrote the foreword to her book, enthusiastically endorses the idea of a “benevolent dictator,” as well as her other policy recommendations for Africa. Together they mercilessly mock the good faith efforts of Bob Gerdof and rock musician Bono; men who have been tireless in their efforts to promote development and reduce hunger, poverty and suffering on the African continent, a totally selfless effort, for which they receive no personal benefits whatsoever. In his foreword, Ferguson states with patronizing irony that Africans, not Europeans should be speaking for Africans. But he, Ferguson goes ahead to speak for us anyway, stating that we should all listen to Dambisa Moyo, and that reading Dead Aid left him “wanting a lot more Moyo and a lot less Bono.” Well maybe Ferguson should take his own advice and not speak for Africa. Maybe he should be well advised that we Africans know that not all Europeans are enemies of Africa, just as not all Africans are Africa’s friends. As an African, I feel a stronger bond of kinship with the European Bono, than with the African Moyo.
At any rate, Niall Ferguson is no economist. He is a historian who engages in a lot of historical revisionism, arguing that British colonialism and imperialism were good for the world, especially the Third World. This, after British colonial governments engaged in massacres against their former colonies, in places as far apart as Kenya and India. (10:00 minutes into video). All this occurred after the entire world, including Indians and Africans, stood and fought alongside Britain to rescue it from Hitler during World War II. Niall Ferguson unapologetically insists that British imperialism was good for the world. If Niall Ferguson’s sense of history is bad, his economic advice is much worse, and economics Nobel Prize winner Paul Krugman has dutifully alerted us to the truth that Ferguson’s economic analyses involve nothing more than mere posturing. Since it is impossible for me to match the eloquence of the irrepressible Paul Krugman, I will quote him verbatim. He says of Niall Ferguson, “I think he’s a poseur. I’m told that some of his straight historical work is very good. When it comes to economics, however, he hasn’t bothered to understand the basics, relying on snide comments and surface cleverness to convey the impression of wisdom. It’s all style, no comprehension of substance.” And that’s all there is to it. As they say, Ferguson’s economic knowledge boils down to nothing more than mere “sound and fury, signifying nothing.”
But this view of ending aid to Africa is nothing new. It is actually an old narrative that is steadily gaining new popularity. Paul Wolfowitz, while he was President of the World Bank, expressed similar views, insisting that African countries did not deserve to receive financial help from the World Bank because they were all corrupt, even as he was engaging in corrupt practices of his own, right within the Bank; corrupt practices that eventually led to his ouster. What is indeed possible is that some in the West, who have never believed that Africa deserves anything good, have found a willing ally in this African daughter of privilege to team up with to do their dirty work. Maybe they want to reintroduce a new era of colonialism through the back door, because in their minds colonialism never really ended but was temporarily abandoned as a matter of convenience when it was no longer feasible to continue the practice. The truth of the matter is, if aid disappears, Africa may well disappear with it. What Africa needs is not aid elimination but aid reform that will make aid work for Africa. With the ravages of hunger and poverty and disease, and in the absence of aid, we may come back in another one hundred years and find that what is left of Africa is nothing but a wasteland. Maybe that will provide justification for another round of “The Scramble for Africa.”
It is also instructive to note that the book is dedicated to Peter Bauer. Peter Thomas Bauer was a Hungarian-born British economist who taught in the London School of Economics. He was adamantly opposed to any form of economic aid and was an early proponent of the supply side, trickledown economics that promotes the idea that if the rich get even richer, some goodies will trickle down to the poor. But everywhere this economic model has been tried, nothing has ever trickled down. Instead what it always creates is a medieval economy, where the rich get super-rich, the poor become extremely poor, and the whole economy is in total chaos engendering a state of real and potential social, economic and political instability similar to what we are experiencing with the current global economic crisis. He was a darling of former British Prime Minister Margaret Thatcher, herself a strong advocate of this economic model. As Secretary of State for Education in Britain, Mrs. Margaret Thatcher became known as “Thatcher the milk snatcher,” when she implemented budget cuts that included taking away from school children, their daily ration of milk which the British schools had hitherto provided as a boost to adequate nutrition for the schoolchildren.
It is impossible to address all of Dead Aid’s factual errors in one blog article. I can only address a few here. On page 35 of her book, Dambisa Moyo writes:
This is another of the many factual errors in the book, and this one is particularly troubling, because it is erroneous on so many levels. Whether it is due to fuzzy math or sloppy proofreading is difficult to determine. But with this particular error as with others in the book, her bias is clearly predictable. It is to unfairly stack her case against aid for Africa. Dividing one trillion dollars among the world’s over six and a half billion people does not result in “nearly US$1,000 dollars for every man, woman and child on the planet today.” The actual figure is closer to $150 each! Her numbers are off by over 500 percent!!Since the 1940s, approximately US$1 trillion of aid has been transferred
from rich countries to Africa. That is nearly US$1,000 for every man, woman
and child on the planet today. (Dead Aid, page 35).
But there’s more! Even the aforementioned one trillion US dollars is sheer fantasy. In a debate with John McArthur, Chief Executive of Millennium Promise on NPR’s On Point with Tom Ashbrook (26:00 minutes into interview), McArthur took her to task on her one trillion dollar figure and pointed out to her that estimates on amounts spent so far on aid to Africa were in the region of 800 billion dollars. She dismissively replied that she did not want to “quibble” about the difference! Well, if she doesn’t want to quibble, a difference of 200 billion dollars seems like an awful lot of money, especially when we are talking about amounts between 800 billion to one trillion dollars. It would mean that her numbers are off by as much as 25 per cent! If you are going to make a case that Africa has squandered aid money, then by all means use accurate figures. If she had good intentions in using approximate figures to support her argument, there would have been no need to exaggerate her numbers in Africa’s disfavor. This would seem the honest thing to do. It is better to truthfully state your case than building an entire thesis on incorrect information.
But perhaps the worst part of that statement is that she includes the 1940s as the time that Africa started receiving aid. In the 1940s, there were no independent African nations collecting aid money, since the only independent nations then were Ethiopia and Liberia, and there is no record that any of them received aid money. The push for African nations to gain independence began after WW II when the United Nations Organization was formed. This was when the process of African independence began on a serious note. If she is including as aid, money that colonial governments used to develop railroads and other means of transportation to enable them move goods out of Africa, that would be terrible indeed because it would really be incredibly misleading and rather insulting for an African to misrepresent as aid, money that was spent by colonial powers for Africa’s exploitation.
Finally, I will discuss two more aspects of her faulty economic analysis. One example she gives is how foreign aid could kill local entrepreneurship. In her example she states that providing free mosquito nets to a malaria-infested enclave would deny local mosquito net manufacturers the ability to remain in business. This conclusion is really incredible. Did she really imply that we should allow sickness and disease to ravage a population while waiting for local manufacturers to catch up with their production, in the name of promoting local enterprise? It is impossible to find anything sensible in this kind of reasoning. Do we allow people to suffer and die from malaria to promote local entrepreneurship? Is this really the way forward for Africa that Dambisa Moyo advocates? I hope not. Providing mosquito nets is a health issue which is as important, if not more important, than the economy, because the health of a community is the wealth of its people. A responsible government can work to improve the health of its people by accepting donated free mosquito nets to reduce the prevalence of malaria in its population, and still keep local production going so that job creation is not jeopardized. It’s simply a matter of adequate planning and proper prioritization.
For instance, the US is among the world’s greatest food producers, if not the greatest, but it still imports a lot of food. This has not killed off local production. The US simply gives subsidies to its farmers to ensure that they make reasonable profits, create employment for the local economy, and maintain an acceptable level of food production, because as a responsible government it wants to be able to feed itself and not have to rely too heavily on external sources for its food supply. A government that is serious can subsidize the mosquito net producers to help them remain in business and maintain their contribution to the local economy, while still working to maintain a healthy population and workforce. The two are not necessarily mutually exclusive as Dr. Moyo’s analysis seems to suggest.
Also the bond market which she so insistently recommends as the solution to Africa’s economic problems is hardly a panacea. It was the bond market that nearly ruined Latin America’s economy in the 1990’s in the infamous tequila crisis, which she mentions in her book, but without the proper economic perspective or context. The US had to bail out the Mexican economy with about 50 billion dollars in 1995 to prevent total economic collapse, precipitated by the crisis in the bond market. If relatively sophisticated economies like those that exist in Latin America could be so easily devastated by the bond market, it is not difficult to see how it could be much for worse for Africa to follow this path.
This article will continue at a later date with a statement about the sources of Africa’s economic problems and how to move forward for the future. Africa’s problems do not stem from mismanagement alone. The toxic political structure that subsists in much of Africa did not happen by accident. Much of it is the direct result of social engineering that is a relic of Western colonialism. This will be the subject of discussion in future posts.
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