Posted by: apscott | May 22, 2008

Thoughts on African Aid

The following is an article I wrote, to be published in the newest issue of GW Discourse. The topic is one I consider of utmost importance, African Aid, and serves as a draft proposal for change in our current policy toward Aid in Africa:

Catastrophe, a Charitable Cause

 

“Foreign aid undermines democracy”

         Andrew Mwenda

 

I. A Progressive Regression     

            If you gave money to a charity, you’d want to see where that money goes, right?  Surely you wouldn’t want that money to end up in the wrong people’s hands.  But what if the money you were giving was supporting an unstable, corrupt, likely violent environment?  Would you be upset? Or would you keep giving?

 

            This situation parallels one the United States faces today. President Bush has tripled direct humanitarian aid in Africa since he took the Presidency.  He has plans to double the current number by 2010 – a 500% increase in under ten years.  Noble, indeed, but this action exemplifies the kind of irresponsible economic policies that are un-developing the African continent.

 

            It might be hard to see how a 500% increase in humanitarian aid could be a bad thing.  Certainly supporters of such aid are elated with such an increase.  Perhaps the phrase “ignorance is bliss” is well suited here. 

 

            In the example of giving to a charity, the action is noble, but this action doesn’t always produce noble results.  The same goes for foreign aid.  Giving money to a poor and undeveloped country is a righteous and seemingly moral action to take.  Yet, a closer look at where this money goes will blur the lines between development and debauchery. 

 

            Africa has made great strides in development since the beginning of the 20th century.  Decades ago imperialism and the Cold War left vague and uncertain political boundaries throughout Africa, crumbling any foundation on which to build a stable nation.   Now, there are 53 autonomous nations in Africa.  Though it is perceived to be a continent wrought with civil war, only six nations are currently involved in such conflict.  Economically, South Africa, Botswana, Ghana, Kenya, Cameroon and Egypt have shown considerable economic success in past years.  Africa is also situated atop some of the most abundant natural resources in the world. Some countries, like Angola, Sudan, and Equatorial Guinea have begun to extract these resources and jumpstarted their economy, witnessing jumps over 10% in their GDP.

 

II. The Downside to Charity

            When aid is dumped into Africa, it is apportioned by economic need.  The poorest countries often get the most money.  Seems logical, no? 

 

            Look at it this way.  Unfortunately the poorest countries are often destitute because the government in power is corrupt and adverse to development.  Supporting such nations through foreign aid only sustains the corrupt environment that is in control. Thomas P.M. Barnett, a military strategist, addresses this issue in his book Blueprint for Action:

 …bad governments force their citizens to rely on their own, typically meager savings to self-finance entrepreneurship, which is just about the slowest way to grow your economy. Since many of these same economies receive significant amounts of foreign developmental aid… there is the additional destructive effect often associated with such charity: it tends to infantilize the local social, political, and economic institutions necessary for broadband development.[1]

 

            Foreign aid is often given with a “budget for construction, but not for maintenance.” When aid is poured into a country based on its economic situation, the money is often given to the wrong people, feeding a habit of instability and corruption. Rather than inadvertently supporting governments clearly incapable of using aid to better their nation, theorists like Ugandan journalist Andrew Mwenda argue for a more careful and perhaps more responsible appropriation of developmental aid. 

 

III. Less is More          

            At the recent G8 Summit in Berlin, it was decided that the solution to Africa’s problems should be a massive increase in aid.  Yet foreign aid already accounts for some 10-15% of many African states’ GDP.  As Mwenda notes, this is an “unprecedented transfer of financial resources from rich countries to poor countries.”

           

            Often what we hear about Africa carries strong undertones of despair, poverty, struggle and conflict, justifying any amount of developmental aid in the area.  It is hard to argue for reformation of African aid when all signals lead us to believe Africa ishopeless. The question of what to do with Africa has presented the solution of simply putting more money into the system to feed the hungry, help the poor, and spread peace through areas of conflict.  But in doing so, we have in a sense stripped Africa of its self initiative.

 

            Clearly, there are fundamental problems in Africa hindering its development.  On the same note, however, the area is filled with potential. As Andrew Mwenda notes in a conference on aid in Africa:

           

            We need to reframe the challenge that is facing Africa, from a challenge of despair, despair which is called poverty reduction, to a challenge of hope.  The challenge facing all those interested in Africa is not a challenge of reducing poverty; it should be a challenge of creating wealth.[2] 

 

             Rather than basing aid on the reducing the poverty of each nation, aid should be given to generate wealth.  In simpler terms, money should not be spent to stifle further loss of money; it should be spent in places where it can productively grow.

 

            Foreign aid today has distorted the incentives for national development.  Governments have little push to democratize or become legitimate when they can live off of such charitable contributions.  Right now it makes more sense for an African nation to go to the IMF for help than to go through the trouble in developing its economy.  In doing so, however, each benefactor of foreign aid loses its ability to listen to its citizens – to understand what its own people need for development.  Instead all ears are pointed toward the donor, and pretty soon institutions like the IMF are dictating policy – telling African nation X what its own people need for development.

 

            Herein lays the problem with the system.  Foreign aid should be used to reward nations who have shown capacity for positive change rather than to sustain nations who contest it. The answer to Africa’s problem is not moreaid; rather it is a reframing of the issue at hand, so as to promote the generation of wealth and to incite productive and positive change throughout.


[1] Barnett, Thomas P. M. Blueprint for Action. New York: The Berkley Publishing Group, 2005.

[2] TED Conference. http://www.ted.com/speakers/view/id/132.

 

Moral Capitalism looks at African Enterprise as an opportunity to reward entrepreneurs for developing their nations. It is also concerned with ensuring sustainable and responsible forms of aid which promote this entrepreneurship – promoting the Prosperity of Wealth, rather than Reduction of Poverty.

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