[This professor is at New York University and he is saying something
which Whites in Africa have been saying for decades - that aid alone
won't actually help Africa. Foolish Bob Geldof is again busy trying to
raise money for Africa which will go to the wrong people. Take note of
what a Professor of Economics has to say on the subject of Debt, Aid,
etc. He is saying exactly the same things I have been writting about for
a long time. This article was run in Australia. Jan]
BOB GELDOF has assembled well- known bands for his Live8 concerts to
lobby G8 leaders meeting in July to "Make poverty history" in Africa.
Veterans of the 1985 Live Aid concert such as Elton John and Madonna
signed up, as well as Coldplay. It is wonderful that so much energy will
go into addressing Africa's problems.
Unfortunately, this campaign is so far spending most of its effort on
causes that will not help the African poor. The objectives are to make
trade fair, drop the debt and increase aid. Removing rich country
protectionism is a worthy cause, although economists' estimates of the
effect on Africa are modest. As for the other two causes - excessive debt
and insufficient aid - history has already shown that insufficient
Western generosity is not the main cause of Africa's woes.
The mythology of African debt is that huge amounts of money are being
sucked out of the continent to go to international creditors. The truth
is that much of Africa's debt has been fictional for a long time. When
the debtors had difficulty coming up with the repayments, creditors gave
new loans, postponed the repayment of old loans, or forgave the old loans
altogether. The G7 has already spent 20 years giving ever more debt
relief to Africa at each successive summit. Maybe the best argument for
dropping the debt is just to end this charade, freeing up the time of
people such as Geldof, G7 politicians and African leaders to concentrate
on the real problems of African aid.
Debt relief itself shows that insufficient aid was not the problem in
Africa. African governments could not repay zero-interest World Bank
loans that required no repayment until 10 years after the loan was made
and then had a 40-year repayment period. What does that say about the
pay-off to the money lent in the first place? The International Monetary
Fund and World Bank gave debt relief even to such long-standing "success
stories" as Uganda. If a businessman could not generate enough profit to
repay a loan with a 10-year grace period and 40-year maturity at zero
interest, you wouldn't call that a successful business.
We know that aid is ineffective from the record of the $568 billion
already given in aid to sub-Saharan Africa. This aid was not successful
in preventing decades of stagnation. Yet campaigners and politicians are
jostling in the public square to call for ever more aid to Africa, from
Geldof to Tony Blair and [Chancellor of the Exchequer] Gordon Brown. Even
George Bush pledged to increase US aid to Africa, although he resists the
more sweeping aid and debt relief program that Blair carries to
Washington this week.
Gordon Brown said in a speech in January that more aid could get 12-cent
medicines to children to prevent half of all malaria deaths. Jeffrey
Sachs says in his new book The End of Poverty that "ending the poverty
trap will be much easier than it appears". At the World Economic Forum in
Davos in January, these two got the actress Sharon Stone so excited about
easy solutions that she jumped up and raised $1 million (from an audience
made up mostly of middle-aged males) for bed nets to protect against
malarial mosquitoes in Africa. Isn't Mr Brown a little curious as to why
hundreds of billions in aid have not already delivered 12-cent medicines
to dying children? Isn't Professor Sachs a little worried that four
decades of aid efforts have not already ended the easy poverty trap?
Isn't Miss Stone a little troubled billions in aid have not already got
$4 bed nets to potential malaria victims?
These latest calls for increased aid echo a long tradition that
emphasises aid volume as the measure by which we judge success on world
poverty. But aid volume measures costs, not benefits. General Motors,
which Wall Street has just downgraded to junk-bond status, would not help
its case if it cited its high costs of production as an achievement.
Bob Geldof and his fellow campaigners should direct their outrage to the
question of why the current sums of foreign aid do not reach the poor.
(The campaign makes a token reference to "better aid," but this is not
the focus of the effort.) A big problem is that what sells politically in
the North is not what is most helpful to the poor in the South. The
slogan "Make poverty history" is so general that it does not hold any
single, rich government or aid agency accountable for making poor
peoples' lives better. If poverty does not become history, who will you
blame? Everyone, and thus no-one. The aid community proposes worldwide
goals for which all aid agencies are collectively responsible. Collective
responsibility does not work, for the same reason that collective farming
has never worked. Hold aid agencies individually responsible for what
their own programmes achieve.
It also doesn't help that the goals are so utopian. African poverty is a
complex problem that has such roots as past Western exploitation,
artificial states created by the colonisers, murderous kleptocrats
(presently exemplified by Robert Mugabe), ethnic conflict, and
dysfunctional bureaucracy in both the Western aid system and Africa's
civil service. To its credit, Tony Blair's Commission on Africa (of which
Bob Geldof was a part) recognised many of these factors - but they didn't
follow it through to its logical conclusion. Aid agencies are even less
accountable for results if they can blame poverty on factors beyond their
In contrast, you could hold aid agencies accountable for results if the
aid agenda was less utopian, just concentrating on specific tangible
steps to help poor people. Researchers have found many programs that
reach the poor: subsidies to parents to keep children in school, free
textbooks for school children, de-worming medicines, nutritional
supplements, education on condoms and treatment for other sexually
transmitted diseases to prevent Aids, indoor spraying to control malaria,
fertiliser subsidies, vaccination, and water provision.
Aid agencies need independent evaluation of the effects on the poor of
their programs. What aid agencies do today is mostly self-evaluation. Aid
agencies are only accountable if independent evaluators judge them. In
short, three steps - individual responsibility of aid agencies, a less
utopian agenda for aid and debt relief, and independent evaluation - are
more likely to help the poor than even more utopian campaigning for more
aid and debt relief.
To all of you who will be listening to Madonna and Coldplay at Live8, you
deserve congratulations for your compassion for Africa's desperate poor.
Direct your energies at the outrage of aid and debt relief dollars not
reaching those same poor. Ask the aid agencies why those 12-cent
medicines have still not reached children dying of malaria. Don't let aid
agencies shun individual accountability and hide behind utopian agendas
and self- evaluation. Once that outrage is fixed, let's go ahead and
increase foreign aid.
William Easterly is Professor of Economics (Joint with Africana Studies)
at New York University.
Source: The Canberra Times