PDA

View Full Version : Why Aid Is To Blame For Africa's Dire Economic Straits



Vulpix
02-23-2009, 10:10 AM
'Everybody knows it doesn't work' (http://www.guardian.co.uk/society/2009/feb/19/dambisa-moyo-dead-aid-africa)

Despite receiving more than $1 trillion from the west over the last half century, Africa remains in dire economic straits. Dambisa Moyo thinks aid is to blame and should stop now. She talks to Aida Edemariam


The Guardian


*snip*


Rising oil prices in the 1970s meant that international banks were awash with money, lax with their policies, and lending at low interest rates; many African countries borrowed large sums to pay off existing debts - until 1979, when another oil crisis prompted banks to raise their interest rates, and those debts could no longer be serviced. In Africa, 11 countries defaulted. When their finances were restructured by the IMF - they were lent money to pay off what they owed - they simply sank deeper into debt. The 80s also saw aggressive trade liberalisation and privatisation: the IMF and the World Bank lent large amounts of cash on the condition that free-market policies were adopted - policies that often led to the destruction of local industries that could not compete. By the end of the 80s debt servicing meant a net reverse flow of money, from poor countries to rich. This could not continue, and campaigns for debt relief soon followed - but they were accompanied, Moyo notes drily, with campaigns, such as Live8, to send large amounts of new aid, "and thus the prospect of fresh debt, all over again".

More than $1 trillion has been sent to Africa over the last 50 years. And what has it all achieved? She wants to know. "Between 1970 and 1998, when aid flows to Africa were at their peak, poverty in Africa rose from 11% to a staggering 66%" - roughly 600 million of Africa's billion people are now trapped in poverty. She would admit that aid has done some good on a local level, however her conclusion is uncompromising: "Aid has been, and continues to be, an unmitigated political, economic and humanitarian disaster for most parts of the developing world" - and Africa in particular, which is "shearing off. The rest of the world is going one direction, on one growth trajectory, and Africa is going completely in the opposite direction. And yet we sit around and discuss sending another $50bn dollars of aid? I mean, come on."

Why is Africa different? Wisely, perhaps, she doesn't get entangled in generalities about colonial guilt, and refers only in one short paragraph to "the largely unspoken and insidious view that the problem with Africa is Africans - that culturally, mentally and physically Africans are innately different. That, somehow, deeply embedded in their psyche is an inability to embrace development and improve their own lot in life without guidance and help." Her argument is that, for whatever reason, the problem is "pity. We don't feel sorry for the Chinese. The Chinese have 30 million people who live like us, if you will. Western standards, but a billion people living in dire poverty. Do you think anybody feels sorry for the Chinese? No. What about Indians? India has a huge proportion of poverty-stricken [people] - does anybody feel sorry for them?"

And the pity, in her reading, has been devastating. It has meant a blind eye being turned to corruption - aid being like striking oil, or finding diamonds, in its potential to tempt. It has meant a kind of continent-wide addiction (with, as the policy director of Christian Aid pointed out in a letter to the Independent, the concomitant "loss of self-control, ability to think forward, the confidence to act for oneself and believe in oneself"). And it's not just the developing countries that become dependent: around 500,000 people, Moyo estimates, depend on disbursing aid for their livelihoods. It is self-perpetuating: multilaterals have to keep lending in order for debts to be serviced. It nurtures, she argues, civil war: it becomes worth fighting over resources. Over the past 50 years 40 million Africans have died in war - equal to the population of South Africa.

Increasingly, over the last decade, the stick that accompanies the aid carrot has been a demand for "good governance". What is meant is transparent institutions, rule of law, lack of corruption; in practice, this is often equated with multi-party elections. But, as she quite scornfully points out, "the western mindset erroneously equates a political system of multi-party democracy with high-quality institutions . . . the two are not synonymous." Many African countries have dutifully held elections - but that hasn't made them any more liberal, or improved the quality of their civil institutions.

Like many of us who grew up in Africa (in my case, Ethiopia, where, she claims, 97% of the government budget is attributed to foreign aid), she saw the aid economy in action - the flash 4x4s, the high salaries, the foreign workers living cushioned lives on nice exchange rates. "In addition it was clear how little say not only the citizens have, but the governments have. You hardly ever saw participation from domestic policymakers in designing and discussing what was, essentially, our future - Africa's future. I mean, there are so many classic examples of people's lives essentially being shaped and designed by policy that's not domestically constructed." She cites the donor who refused to give any aid unless an entirely new town be built in Zambia, despite the government's protests that they would be left holding the baby, as indeed happened; or George Bush's requirement that two-thirds of the $15bn he was giving to fight Aids had to go to pro-abstinence programmes, and none could go to any establishment that provided abortions.
*snip*


Hello Bono? Hello Geldof?...

Beorn
02-23-2009, 10:23 AM
"the largely unspoken and insidious view that the problem with Africa is Africans - that culturally, mentally and physically Africans are innately different. That, somehow, deeply embedded in their psyche is an inability to embrace development and improve their own lot in life without guidance and help."


This (http://www.theapricity.com/forum/showthread.php?p=18548#post18548)article clearly shows the true face of this incompetence.

ReichGirl
03-15-2009, 01:41 AM
we need to send them more aid :D

RoyBatty
03-15-2009, 02:14 AM
It's not quite as simple as the rich "white" countries handing out "charity" to Africa.

Let's take the tearjerker brigade like Geldof and Bozo (Bono? forgot his name). These "Aid" Concerts generate a huge amount of money and public interest but the real winners from those events are the artists (massive media exposure), the broadcasters (advertising... kerchinggggg), the organisers..... kerrrrchingggg, the various middlemen and event sponsors who all take their pounds of flesh and the "aid" agencies who cream off whatever remains.

Whatever is left (by this time not much) makes it to Africa. Once there, the local chiefs steal what can be stolen while a few bags of flour would make it to a village where the prepped western filmcrew are already waiting to film the joyous scenes. That's the "Live Aid" scam.


Then there are the World Bank / IMF's "help" to African countries. They're quite shrewd here. What they do is to convince the local dictator / chief to take out a massive loan at low interest for a local "white elephant" infrastructure project. The project will naturally run over budget and be behind schedule. The chief and his cronies will pocket huge kickbacks. The Western engineering firms will make massive profits. The country will now be in massive debt to the IMF / World Bank.

Next step.... they have to now "open" their economy for "investment" by foreign corporations. Local infrastructure gets taken over. Mines get taken over. The entire country ends up in the pockets of Wall Str and the City of London. From this point they're in a trap from which there is little escape and they'll be ripped off for decades to come thanks to their corrupt and greedy leaders and the crooks in the world's financial capitals.

This documentary explains the system quite well:

http://www.youtube.com/watch?v=yTbdnNgqfs8

http://www.youtube.com/watch?v=29GhXsx7-Rs

Maelstrom
03-15-2009, 04:10 AM
I have been telling people this for ages :rolleyes:

Aid...

Aid is not designed to actually help African countries, but rather to put them in debt. As soon as African country X recieves aid from industrialised country Y, Y will have salesmen at X's door, telling them they need this, that and the other thing. Overwhelmed by the nice images or videos, X hastily signs his money away back to Y. However, being the great salesman that he is, Y has a whole lot of fine-print. What has actually happened is that Y has sold X a story. X has bought things off Y that he never really needed or that won't actually help his country all that much. Added to that, because of the fine-print, X actually now owes Y more money than the aid just given to him.

Lahtari
03-30-2009, 09:08 PM
http://www.spiegel.de/international/spiegel/0,1518,363663,00.html


"For God's Sake, Please Stop the Aid!"

The Kenyan economics expert James Shikwati, 35, says that aid to Africa does more harm than good. The avid proponent of globalization spoke with SPIEGEL about the disastrous effects of Western development policy in Africa, corrupt rulers, and the tendency to overstate the AIDS problem.

SPIEGEL:

Mr. Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa...

Shikwati: ... for God's sake, please just stop.

SPIEGEL: Stop? The industrialized nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.

SPIEGEL: Do you have an explanation for this paradox?

Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.
...


"When there's a drought in a region of Kenya, our corrupt politicians reflexively cry out for more help. This call then reaches the United Nations World Food Program -- which is a massive agency of apparatchiks who are in the absurd situation of, on the one hand, being dedicated to the fight against hunger while, on the other hand, being faced with unemployment were hunger actually eliminated."


"If one were to believe all the horrorifying reports, then all Kenyans should actually be dead by now."
...
"AIDS is big business, maybe Africa's biggest business. There's nothing else that can generate as much aid money as shocking figures on AIDS. AIDS is a political disease here, and we should be very skeptical."


"Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide."


"When an aid organization needs a driver, dozens apply for the job. And because it's unacceptable that the aid worker's chauffeur only speaks his own tribal language, an applicant is needed who also speaks English fluently -- and, ideally, one who is also well mannered. So you end up with some African biochemist driving an aid worker around, distributing European food, and forcing local farmers out of their jobs. That's just crazy!"


"If they really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own two feet."

SwordoftheVistula
03-31-2009, 08:57 AM
Can we stop aid to Detroit and New Orleans too?