Sunday, December 26, 2010

Dead Aid...Africa and Monetary Aid

Recently, upon some downtime in between finals I came across a video. In that video was an African woman named Dambisa Moyo. She is from the African country of Zambia. Moyo was very educated she had gone to Harvard, gotten her Ph.D in something I don't remember from Oxford and had written a book entitled Dead Aid.

In the book she says that the Western world, specifically the U.S. should stop sending aid money to Africa. Well of course dissonance kicked in and I at this point was pretty flustered at the idea of an African not wanting Africans to be aided financially. However being the fair person I am I continued to listen and understand her theories and came to the conclusion...that perhaps she's right.

You see to Moyo, all the financial [government to government] aid that the West sends to Africa is squandered by the state governments.
She differentiates medical aid [which is necessary] and this government to government aid. She states that the original purpose of this government to government aid was to help African governments invest in African citizens for economic growth. In other words to fight poverty and to her the financial aid to fight poverty in Africa has failed, for numerous reasons, but the top reason is that the African governments see this aid as INCOME.

What does this mean? Well the way she puts it: that African governments have been receiving financial aid [usually in the upper millions to billions of dollars] regularly for 50-60 years with no improvement to the population at large and no dent in African poverty. In fact those impoverished populations are poorer than before [the same can be said for America]. Therefore she says those African governments have decided not to pursue their own country's economic growth because they will continue to receive money under the pretense that they are poor. She believes cutting African nations off will force the governments to invest in their own nations and create jobs and wealth etc, in their own respective countries.

She also mentions the widespread corruption of African governments. It is fairly well known that many in African governments just pocket the money given to them for their people and never distribute it, or they distribute very little of it.

She also tells of how little Africans know of banking and markets. Now I won't bore you with the economics or statistics but the amount of banks in Africa are minimal. She says Africans have what economists call "dead money" [keeping money in places where it doesn't earn interest, i.e under the mattress] and thus all of Africa's wealth and her people's wealth die out over time.

She believes that by cutting aid, African governments would be forced to encourage economic growth within their own states and then those governments can start to look into making their citizens more economically intelligent with the money they have earned. All of this combined should spur more economic growth and pull Africa out of widespread poverty, or at least that is Moyo's theory.

Strangely enough I had never thought of it before. I had heard about corruption in Nigeria, Malawi, etc but I assumed all of that was corporate bribery which is something she oddly left out in the video [not to say it isn't mentioned in the book, I haven't read it]. Corruption in Africa is almost always followed by a corporate name: Haliburton, Exxon. I never thought about government to government bribery, or that these governments don't distribute wealth but rather see it as their paycheck to do with it whatever they wish.

Moyo's beliefs are not farfetched and in fact in these hard economic times in this country, these ideas should be considered even more. With the massive debt the U.S is in do we really want to keep funneling funds, we don't have, into Africa? Well no, but I would say in these harsh times we need to cut off all financial government to government aid, not only to Africa but to other countries as well.

Then it struck me...think for a second about the wealth of natural resources that sit in, gold, rubber, you really think Western capitalist governments and their corporations want to educate those people on the wealth they sit on? Imagine if they had to pay the governments and people what those commodities were really worth. How much more would we, here in America, pay for goods? Scary to think how much we benefit from African ignorance and yet some of us strive to see them awakened. Kwame Nkrumah's plan for Pan-African socialism would thrive and Africa would truly prosper, possibly beyond the Western world.

With that said, I fear Moyo's ideals will fall on deaf ears. They will continue to support corruption in African governments because it keeps the prices on African natural resources low and their corporate bottom lines fat. But also because we, the American public and Westerners in general, greatly benefit from Africa's ignorance with cheap goods.

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