Dead Aid:
Why Aid did not help Africa! A Better way without Aid!
8 June, 2009 | Fekadu Bekele, PhD
Dambisa Moyo`s book Dead Aid is a timely book which brings forth what
we have been thinking about Western aid, but did not dare to speak out.
Moyo showed that while many Asian countries intelligently modernized their
societies by mobilizing internal and external resources, the persistent flow of aid to
Africa over the last 6 decades has inflicted heavy damages which cannot be easily
repaired. Over the last 60 years almost a trillion of dollars has been poured into
Africa, and yet growth is decreasing. As a result of aid related economic policies,
instead of economic growth, the situation in many African countries south of the
Sahara is worse than 30 years ago. Between 1984 and 2002 the number of poor
people has increased at an alarming rate, while life expectancy has stagnated or
decreased. In many African countries life expectancy is below 50 years, which
shows that aid could not move Africa forward. This negative trend is visible in
many areas, like lack of clean water, bad sanitation systems, and ineffective health
facilities which are concentrated in few cities, the building up of slums and the
break up of social ties, increasing illiteracy rate and so on.
Though there has been remarkable growth in many African countries in
recent years as a result of raw material demands on the world market, still the 5%
growth rate could not mitigate all the negative effects what Western aid has caused
over the last 60 years. The gain from this export driven demand could not be
allocated wisely to create internal accumulation, and as a result the continent now
faces budget deficits.
Why Aid could not work in Africa!
the war, many Western capitalist economies had intact economic and social
infrastructures. The war did not destroy the physical infrastructures, like roads,
rail road systems, and machines which are the backbones of real economic
development. Besides these, many Western countries which were affected by the
war have long accumulated organizational experiences and know-how which they
could easily mobilize after the war. The money and other aid related resources
which came from America only helped the very existing structures to reorganize
effectively. The fact that America had great interest in counter attacking the
expansion of the Soviet communism, it did not have any other option than helping
Western Europe to rebuild its broken economy.
In comparison to the Western accumulated experience and knowledge,
many African countries lack so many things. By quoting Max Weber, many
African countries lack the protestant spirit which is the main driving force of
capitalism in many western countries. Others, like tribal and geographical factors
are also hindrances for the development of capitalism in Africa. Because many
African countries are organized more on the basis of ethnic solidarity than social
articulation, they fight for resources which share their valuable energy, and which
they other wise invest to create a generalized social wealth. The tribal structures
also hinder that many tribes could not develop effectively division of labour which
is the basis of exchange and integrated social structures. Due to the low level of
the development of social division of labour and social integration which can
destroy tribal barriers, state systems which organize resources effectively could
not develop. When Western capitalist countries began colonizing Africa, they
started to destroy the very existing social structures, and threw many countries
into mere appendage to make them the basis of capitalist accumulation. These and
the climatic conditions in many African countries, which are believed to be the
causes of economic backwardness, do not favour real economic development.
Though many African countries are endowed with strategic mineral resources
which are vital for technological development, the rich resources what Africa
possesses rather become a curse than a help.
Though these are factors that must be reckoned when one tries to analyse
the problem of development/underdevelopment in Africa, the main argument of
Moyo is different. According to her investigation which is evidenced statistically,
not only the nature of aid, but also the allocation of aid which is related to specific
policies blocks any meaningful development. At the beginning many African
countries received aid which helped them to build their infrastructures and other
big projects. But as of the 1980s many African governments must practice the
austerity policies of the IMF and the World Bank. The march of neo-liberalism and
the diminishing rolls of many states to stimulate their economies mean that many
African countries must adjust themselves to the changed environment. The
deterioration of their trade balances due to the rapid fall of world market prices for
raw materials left no other option other than accepting the new paradigm of a pure
market economy. Pure market economy which is strictly based on neo-liberal
ideology has been seen as the most effective medicine which could bring
economic growth in many African countries. Hence, African governments must
stop intervening in economic activities. This will motivate the private sector and
paves the way for the allocation of resources, which is a reflection of market
mechanism. Privatization, liberalisation and devaluation of the currencies become
the most effective parameters which loosen the market from the grips of
government intervention. The IMF, the World Bank and the donor community are
convinced that many African countries will have bright futures if they persistently
apply market economic policies as is prescribed in the school books. Aid packages
are tightened with the market principles of the IMF and the World Bank philosophy.
As to Moyo, though conditionality seems good on paper, aid recipient
countries do not strictly follow the advices of the donor community, and allocate
them in areas whose rewards are either low or spent lavishly. Neither the donor
community controls from time to time whether recipient countries are following
the strict prescription as is agreed on paper. This is one aspect of the argument
that Moyo discusses in her book, why aid couldn’t work in Africa, and
perpetuates the existing structures so that Africa becomes more and more
dependent on the donor community for her very existence. The other argument
that Moyo discusses is that the aid program of the West has strategic aims from
the outset, and as such it is not designed to create a well-functioning economy
which is based on science and technology. Whether African governments are
democratic or not, as long as they fulfil the strategic interests of the West aid
flows will continue.
Negative Impacts of Aid
As aid has strategic purposes, it produces corruption on a higher scale,
strengthens dictatorial regimes and disenfranchises the masses. Moyo shows the
strong correlation between increasing aid dependency, corruption and the nature of
government structures in many African countries. As many African governments
rely on aid, they do not show any will to find other means to bring their economy
on the right track. As there are no organic links between the government
structures and the masses, governments rely more on repressive measures to hold
down any resistance from the masses. Irrespective of bad governance, human
rights abuses, and mass scale corruption, Western governments continue with
their aid programs. The government in Ethiopia is a good example, why donor
countries are not interested in fair election, good governance and accountability.
They have been financing a regime over the last 18 years which is disliked by over
90% of the population, and which is engaged in mass killings and practices ethnic
policies which lead the country to civil wars.
Continuous aid dependency has also incalculable social consequences. As
African governments do not feel responsible for their people, they do not have
social programs or any agenda to use the available human resources wisely. Due to
false investment priorities and concentration in few cities, these cities are
overcrowded and are becoming breeding grounds for criminality and social
upheaval which cannot be easily controlled. The mass immigration from the rural
areas to the cities has created on one hand new social structures which are not
productive and creative, on the other hand social ties which have existed for
generations are broken. As governments could not create economic structures
which create job opportunities for the masses, and do not generate sufficient
income, the saving and buying capacity of the masses are very low. In this case
governments do not have wide tax base with which they could finance
infrastructures, support small and medium size industries, and give special subsidy
for social programs which tightens the community together. In short, aid
dependency creates indifference, loss of creativity, non-self reliance, and social
irresponsibility which ultimately ruin the entire social fabric of a given country.
The Remedy
Interestingly Moyo proposes that if undeveloped economies want to become
prosperous they need benevolent dictators which are capable of mobilizing human
and natural resources. Unfortunately, she says, instead of becoming benevolent,
they remain dictators at the end. On the other hand, multi-party democracy cannot
work in Africa, since decision processes consume too much time, and parties fight
more on agendas that advance their interests, nation building which needs
profound knowledge and wise politics remain behind. In this case Africa finds
itself in a great dilemma.
Though things seem politically bleak, Moyo still believes that African
countries have ample opportunities to develop their economies. African countries
should follow the examples of Asian countries. First of all, they have to turn their
back on Western aid, and strengthen their ties with more friendly countries.
According to Moyo, China could be a very good strategic partner; and the Chinese
are showing more interests in the development of the African economy. Their
activities on more strategic sectors, and building highways and rail roads are
examples which could benefit the continent, and help her at the end to build a
strong home market. Secondly, African countries could mobilize internal and
external resources by issuing special state bonds, which could be allocated in areas
whose multiplier effects are great. Therefore it is very important to create new
financial instruments and organizing a capital market which help to mobilize the
existing money from within. Thirdly, African governments must push Western
countries to cut their subsidies for their farm products, and open their market for
African products. At the end African countries must apply market economy if they
want to grow and develop their economies.
The Problem
Moyo sees African governments as passive agents, which accept the
advices of the donor community without examining whether the policies work or
not. That means African governments are either unwilling or capable to produce
their own ideas and implement them. On the other hand why the African elite
handle the issues like this is not thematically analysed. As long as we do not know
the root causes of such irrational handlings which ruin the continent, it is very
difficult to work out a viable development program.
Moyo fixes her analysis and the bad performance of the continent to aid
alone. Over the last three or four decades, many Third World experts like Prof.
Samir Amin and others, and many experts from the West who have humanistic
outlooks have developed complex theories and showed that the causes of
underdevelopment in Africa are more complex, and cannot be reduced to a single
factor. Slavery, colonialism, the international division of labour and the unequal
exchanges which African countries are exposed, are the few factors which are
responsible for why the African economy is lagging behind. Besides these, the
internal structures of the African societies, which are solely the result of slave
trade and colonialism, and the cultural and social structures which are created after
independence are factors which hinder the development of science and technology
in Africa. With this the nature of the state structure is not suitable to create internal
accumulation, and as such governments think that the resources of the continent
belong to few individuals. The militarization of the state apparatus and the
organization of the security to control any intellectual movement, and the strong
ties of these structures with foreign forces hinder Africa to go its own road.
Practically the absence of social and intellectual movements make the continent a
play ground of all governmental and non-governmental organisations. To use
Alavis words, the overdeveloped state apparatus from within, and its external
weakness, make the continent vulnerable for outside manipulation. In short,
Africa is still a controlled continent which must be freed from internal repressive
forces and external domination which drive the continent to more aggressive
wars.
Moyo sees the future of Africa only from the perspective of a market
economy. She knows better than I do that a market economy can work when
certain social relationships are created and organized. If we look at the economy of
Western Europe, it is based on certain political, social, cultural and psychological
mechanisms, and it is a product of at least four hundred years. That means for the
introduction of a market economy, certain factors alone are not sufficient. Since
the basis of any social structures is the existence of a social and technological
division of labour, any society must be organized on these principles. On the other
hand any society exists not for the sake of a market economy. Though any society
needs production, distribution and exchange for its existence, these aspects are the
reproduction bases of any society to lay the foundation for higher forms of
cultural and social organization. Societies which reduce themselves to a pure
market economy while neglecting social, cultural and spiritual factors will
inevitably create abnormal structures which cannot be cured easily.
From this perspective the African continent needs more than a market
economy. In order to develop Africa not only as a market economy, but also as a
society with all cultural features, the continent needs cultural renaissance. Africans
must take holistic approaches to mobilize the existing resources and forces so that
they can build aesthetically designed societies. As history teaches us, only the
simultaneous mobilization of all the available resources will lead countries to
effective and durable results.
In general Moyo`s book is a very challenging book, and addresses our
problems. It confronts those aid gurus, like Prof. Jeffery Sachs who manipulate
the African leaders with their neo-liberal agendas. It is a very good starting point
for further discussion, and can contribute to eliminate confusing ideas.
Fekadu Bekele, Ph D
The writer can be reached at fekadubekele@gmx.de
Why Aid did not help Africa! A Better way without Aid!
8 June, 2009 | Fekadu Bekele, PhD
Dambisa Moyo`s book Dead Aid is a timely book which brings forth what
we have been thinking about Western aid, but did not dare to speak out.
- As the introducer of the book
correctly stated, many have written about aid
but never questioned the relevance of Western
aid in creating a science based social wealth.
On the other hand Moyo has shown brilliantly
that Western aid, governmental or non-
governmental couldn’t help Africa in regard to
transforming to a better form of social
organization, by which innovation and
technological development become possible.
Due to persistent aid dependency many African
countries could not mobilize their natural and
human resources, and are hindered to build a
self-reproductive economy. If African
countries south of the Sahara want to become
prosperous they must be cured effectively
from aid cancer. The only effective medicine to
cure this cancer is to stop begging for Western
aid and start relying on other sources which
can create social wealth which is based on
science and technology.
Moyo showed that while many Asian countries intelligently modernized their
societies by mobilizing internal and external resources, the persistent flow of aid to
Africa over the last 6 decades has inflicted heavy damages which cannot be easily
repaired. Over the last 60 years almost a trillion of dollars has been poured into
Africa, and yet growth is decreasing. As a result of aid related economic policies,
instead of economic growth, the situation in many African countries south of the
Sahara is worse than 30 years ago. Between 1984 and 2002 the number of poor
people has increased at an alarming rate, while life expectancy has stagnated or
decreased. In many African countries life expectancy is below 50 years, which
shows that aid could not move Africa forward. This negative trend is visible in
many areas, like lack of clean water, bad sanitation systems, and ineffective health
facilities which are concentrated in few cities, the building up of slums and the
break up of social ties, increasing illiteracy rate and so on.
Though there has been remarkable growth in many African countries in
recent years as a result of raw material demands on the world market, still the 5%
growth rate could not mitigate all the negative effects what Western aid has caused
over the last 60 years. The gain from this export driven demand could not be
allocated wisely to create internal accumulation, and as a result the continent now
faces budget deficits.
Why Aid could not work in Africa!
- Moyo compares
the effectiveness of aid
between Europe and
Africa. After the Second
World War, many
Western European
countries received aid
which had helped them to
rebuild their broken
economies. Due to the
Marshall Plan they couldn’
t only rebuild their
economies within a short
time; they could also
become competitive and
easily dominate the world
market.
the war, many Western capitalist economies had intact economic and social
infrastructures. The war did not destroy the physical infrastructures, like roads,
rail road systems, and machines which are the backbones of real economic
development. Besides these, many Western countries which were affected by the
war have long accumulated organizational experiences and know-how which they
could easily mobilize after the war. The money and other aid related resources
which came from America only helped the very existing structures to reorganize
effectively. The fact that America had great interest in counter attacking the
expansion of the Soviet communism, it did not have any other option than helping
Western Europe to rebuild its broken economy.
In comparison to the Western accumulated experience and knowledge,
many African countries lack so many things. By quoting Max Weber, many
African countries lack the protestant spirit which is the main driving force of
capitalism in many western countries. Others, like tribal and geographical factors
are also hindrances for the development of capitalism in Africa. Because many
African countries are organized more on the basis of ethnic solidarity than social
articulation, they fight for resources which share their valuable energy, and which
they other wise invest to create a generalized social wealth. The tribal structures
also hinder that many tribes could not develop effectively division of labour which
is the basis of exchange and integrated social structures. Due to the low level of
the development of social division of labour and social integration which can
destroy tribal barriers, state systems which organize resources effectively could
not develop. When Western capitalist countries began colonizing Africa, they
started to destroy the very existing social structures, and threw many countries
into mere appendage to make them the basis of capitalist accumulation. These and
the climatic conditions in many African countries, which are believed to be the
causes of economic backwardness, do not favour real economic development.
Though many African countries are endowed with strategic mineral resources
which are vital for technological development, the rich resources what Africa
possesses rather become a curse than a help.
Though these are factors that must be reckoned when one tries to analyse
the problem of development/underdevelopment in Africa, the main argument of
Moyo is different. According to her investigation which is evidenced statistically,
not only the nature of aid, but also the allocation of aid which is related to specific
policies blocks any meaningful development. At the beginning many African
countries received aid which helped them to build their infrastructures and other
big projects. But as of the 1980s many African governments must practice the
austerity policies of the IMF and the World Bank. The march of neo-liberalism and
the diminishing rolls of many states to stimulate their economies mean that many
African countries must adjust themselves to the changed environment. The
deterioration of their trade balances due to the rapid fall of world market prices for
raw materials left no other option other than accepting the new paradigm of a pure
market economy. Pure market economy which is strictly based on neo-liberal
ideology has been seen as the most effective medicine which could bring
economic growth in many African countries. Hence, African governments must
stop intervening in economic activities. This will motivate the private sector and
paves the way for the allocation of resources, which is a reflection of market
mechanism. Privatization, liberalisation and devaluation of the currencies become
the most effective parameters which loosen the market from the grips of
government intervention. The IMF, the World Bank and the donor community are
convinced that many African countries will have bright futures if they persistently
apply market economic policies as is prescribed in the school books. Aid packages
are tightened with the market principles of the IMF and the World Bank philosophy.
As to Moyo, though conditionality seems good on paper, aid recipient
countries do not strictly follow the advices of the donor community, and allocate
them in areas whose rewards are either low or spent lavishly. Neither the donor
community controls from time to time whether recipient countries are following
the strict prescription as is agreed on paper. This is one aspect of the argument
that Moyo discusses in her book, why aid couldn’t work in Africa, and
perpetuates the existing structures so that Africa becomes more and more
dependent on the donor community for her very existence. The other argument
that Moyo discusses is that the aid program of the West has strategic aims from
the outset, and as such it is not designed to create a well-functioning economy
which is based on science and technology. Whether African governments are
democratic or not, as long as they fulfil the strategic interests of the West aid
flows will continue.
Negative Impacts of Aid
As aid has strategic purposes, it produces corruption on a higher scale,
strengthens dictatorial regimes and disenfranchises the masses. Moyo shows the
strong correlation between increasing aid dependency, corruption and the nature of
government structures in many African countries. As many African governments
rely on aid, they do not show any will to find other means to bring their economy
on the right track. As there are no organic links between the government
structures and the masses, governments rely more on repressive measures to hold
down any resistance from the masses. Irrespective of bad governance, human
rights abuses, and mass scale corruption, Western governments continue with
their aid programs. The government in Ethiopia is a good example, why donor
countries are not interested in fair election, good governance and accountability.
They have been financing a regime over the last 18 years which is disliked by over
90% of the population, and which is engaged in mass killings and practices ethnic
policies which lead the country to civil wars.
Continuous aid dependency has also incalculable social consequences. As
African governments do not feel responsible for their people, they do not have
social programs or any agenda to use the available human resources wisely. Due to
false investment priorities and concentration in few cities, these cities are
overcrowded and are becoming breeding grounds for criminality and social
upheaval which cannot be easily controlled. The mass immigration from the rural
areas to the cities has created on one hand new social structures which are not
productive and creative, on the other hand social ties which have existed for
generations are broken. As governments could not create economic structures
which create job opportunities for the masses, and do not generate sufficient
income, the saving and buying capacity of the masses are very low. In this case
governments do not have wide tax base with which they could finance
infrastructures, support small and medium size industries, and give special subsidy
for social programs which tightens the community together. In short, aid
dependency creates indifference, loss of creativity, non-self reliance, and social
irresponsibility which ultimately ruin the entire social fabric of a given country.
The Remedy
Interestingly Moyo proposes that if undeveloped economies want to become
prosperous they need benevolent dictators which are capable of mobilizing human
and natural resources. Unfortunately, she says, instead of becoming benevolent,
they remain dictators at the end. On the other hand, multi-party democracy cannot
work in Africa, since decision processes consume too much time, and parties fight
more on agendas that advance their interests, nation building which needs
profound knowledge and wise politics remain behind. In this case Africa finds
itself in a great dilemma.
Though things seem politically bleak, Moyo still believes that African
countries have ample opportunities to develop their economies. African countries
should follow the examples of Asian countries. First of all, they have to turn their
back on Western aid, and strengthen their ties with more friendly countries.
According to Moyo, China could be a very good strategic partner; and the Chinese
are showing more interests in the development of the African economy. Their
activities on more strategic sectors, and building highways and rail roads are
examples which could benefit the continent, and help her at the end to build a
strong home market. Secondly, African countries could mobilize internal and
external resources by issuing special state bonds, which could be allocated in areas
whose multiplier effects are great. Therefore it is very important to create new
financial instruments and organizing a capital market which help to mobilize the
existing money from within. Thirdly, African governments must push Western
countries to cut their subsidies for their farm products, and open their market for
African products. At the end African countries must apply market economy if they
want to grow and develop their economies.
The Problem
Moyo sees African governments as passive agents, which accept the
advices of the donor community without examining whether the policies work or
not. That means African governments are either unwilling or capable to produce
their own ideas and implement them. On the other hand why the African elite
handle the issues like this is not thematically analysed. As long as we do not know
the root causes of such irrational handlings which ruin the continent, it is very
difficult to work out a viable development program.
Moyo fixes her analysis and the bad performance of the continent to aid
alone. Over the last three or four decades, many Third World experts like Prof.
Samir Amin and others, and many experts from the West who have humanistic
outlooks have developed complex theories and showed that the causes of
underdevelopment in Africa are more complex, and cannot be reduced to a single
factor. Slavery, colonialism, the international division of labour and the unequal
exchanges which African countries are exposed, are the few factors which are
responsible for why the African economy is lagging behind. Besides these, the
internal structures of the African societies, which are solely the result of slave
trade and colonialism, and the cultural and social structures which are created after
independence are factors which hinder the development of science and technology
in Africa. With this the nature of the state structure is not suitable to create internal
accumulation, and as such governments think that the resources of the continent
belong to few individuals. The militarization of the state apparatus and the
organization of the security to control any intellectual movement, and the strong
ties of these structures with foreign forces hinder Africa to go its own road.
Practically the absence of social and intellectual movements make the continent a
play ground of all governmental and non-governmental organisations. To use
Alavis words, the overdeveloped state apparatus from within, and its external
weakness, make the continent vulnerable for outside manipulation. In short,
Africa is still a controlled continent which must be freed from internal repressive
forces and external domination which drive the continent to more aggressive
wars.
Moyo sees the future of Africa only from the perspective of a market
economy. She knows better than I do that a market economy can work when
certain social relationships are created and organized. If we look at the economy of
Western Europe, it is based on certain political, social, cultural and psychological
mechanisms, and it is a product of at least four hundred years. That means for the
introduction of a market economy, certain factors alone are not sufficient. Since
the basis of any social structures is the existence of a social and technological
division of labour, any society must be organized on these principles. On the other
hand any society exists not for the sake of a market economy. Though any society
needs production, distribution and exchange for its existence, these aspects are the
reproduction bases of any society to lay the foundation for higher forms of
cultural and social organization. Societies which reduce themselves to a pure
market economy while neglecting social, cultural and spiritual factors will
inevitably create abnormal structures which cannot be cured easily.
From this perspective the African continent needs more than a market
economy. In order to develop Africa not only as a market economy, but also as a
society with all cultural features, the continent needs cultural renaissance. Africans
must take holistic approaches to mobilize the existing resources and forces so that
they can build aesthetically designed societies. As history teaches us, only the
simultaneous mobilization of all the available resources will lead countries to
effective and durable results.
In general Moyo`s book is a very challenging book, and addresses our
problems. It confronts those aid gurus, like Prof. Jeffery Sachs who manipulate
the African leaders with their neo-liberal agendas. It is a very good starting point
for further discussion, and can contribute to eliminate confusing ideas.
Fekadu Bekele, Ph D
The writer can be reached at fekadubekele@gmx.de
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