Zambian economist Dambisa Moyo has written a book — ‘Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa’ , in free translation – the book has no edition in Portuguese) — to denounce how the hypocrisy of political correctness has done nothing but impoverish the African continent through international aid.
Moyo holds a PhD in economics from Oxford University, a Masters in Public Administration from Harvard University, and has worked as a consultant for the World Bank for a few years and for Goldman Sachs, where she was head of economic and strategic research for sub-Saharan Africa.
The main argument of the African economist’s text is that the aid destined to Africa, instead of promoting economic growth, condemned the continent to poverty and to the continued dependence on international aid for its survival.
Moyo points out that while billions of dollars are received annually by Africa, its nations remain mired in misery. Economic growth is extremely slow and African nations are becoming increasingly indebted, their economies wrecked by inflation. This increases government instability, civil unrest and, of course, paralyzes social development.
The economist emphasizes that aid is a complete disaster in political, economic and humanitarian terms. She backs up her claims with data: “In the last 60 years, billions of dollars in development aid have been transferred from rich countries to Africa. 50% of the population lives on less than a dollar a day, a figure that has nearly doubled in two decades.”
She says the victimization of some African groups is the biggest obstacle to the continent’s development. “China has a population of 1.3 billion people and only 300 million live like us (with a high standard of living). There are 1 billion Chinese living below that standard. Do you know someone who is concerned about China ? Nobody.”
The background behind all of this is that aid money in Africa is used for hunger relief, medical emergencies, clean water supplies and other basic needs, which is extremely important, but they only target the symptoms and not the cause. If the money sent is not put into production, people will continue to survive badly on foreign aid, but they will never be able to overcome poverty. In addition, part of this money is sometimes used to perpetuate and sustain totalitarian regimes in power, as resources have to be passed through to the population, and a large portion is lost due to corruption.
What a continent like Africa needs is investment in economic fields that generate structures for sustainable development. This requires education, of course, but also the promotion of an entrepreneurial culture, to generate jobs and increase production on the continent, which is the only thing that can allow Africans to have their own homes and eat their own food in a few decades, without having to depend on the arrival of money from developed countries.
It is claimed that even international aid weakens the few local producers that exist in Africa, who send subsidized (even free) products to the region, which directly compete with the products made there.
In 1990, there were 280 million people living in extreme poverty in Africa; today that number exceeds 430 million. Countries like South Sudan and Niger have extreme poverty rates above 90%, so it is estimated that by 2030 approximately nine out of ten extremely poor people will be living in sub-Saharan Africa.
In contrast to the situation in Africa, according to the World Bank, there were 1.9 billion people in extreme poverty worldwide in 1990, and today that number has decreased to 736 million people. In other words, while more than 1.1 billion people worldwide have emerged from extreme poverty in the last 30 years, the opposite trend has taken place in Africa, where the number has increased by at least 150 million people.
In recent years, initiatives have been taken in Africa to boost the economy, tourism being one of them. In fact, over the past two decades this industry has grown by 9% annually, which is positive, but much more is needed. A continent like Africa needs a diversification of its economy, it needs more transparent and less authoritarian political systems and, at the same time, it demands constant training of the members of their societies to inaugurate sustainable economic projects.
The African reality can be transferred to all the nations of the world that go through similar processes of backwardness and poverty, some due to circumstantial and historical particularities, but the vast majority due to ideological and economic vices such as socialism, which led to the bankruptcy of different nations of Eastern Europe and Latin America.
The truth is that no nation can progress or grow the economy with eternal subsidies, without entrepreneurship and without private companies. Not all help is good, there is help that kills, as Dambisa Moyo shows.
Without economic structures, without education and training, without employment, handouts will simply postpone the bad times of societies doomed to external dependence. And without a doubt the African people are capable of much more.
©2021 Foundation for Economic Education. Published with permission. Original in English.
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