Week #7 Aid To Africa

  1. African economies have seen the value in finding aid and funding to help advance their economies, this money does not always come from the traditional aid sources. Dambisa Moyo in her book Dead Aid she discusses the various issues involved with giving aid to Africa and possible changes to aid to benefit the people of Africa. Moyo discusses four alternative sources for funding African economies, which are, African governments should follow Asian emerging markets and take advantage of falling yields paid by sovereign borrowers. “Second, they should encourage the Chinese policy of large-scale direct investment in infrastructure”(Moyo). Third they should advocate for the genuine free trade in agricultural markets to allow Africa’s agricultural products to compete fairly on the global market. “Fourth, they should encourage financial intermediation”(Moyo). If these four steps can be achieved it will greatly increase the chance for African nations to truly rise above their current developing status. The problem is the implementation of these ideas while saying opening the global agricultural markets to free trade the idea of convincing countries like the US and Japan to stop subsidies seems far-fetched.Dambisa_Moyo_Black_Presence_UK
  2. In the history of aid the reasons for helping countries had little to do with helping their people but stopping the spread of certain political ideology. Two of the biggest givers of aid around the time of the cold war were the US and USSR. These two countries gave aid to stop the spread of the others political movements the US were willing to spend millions of dollars stopping the spread of communism. Their first large investment of aid was “the US funneled large sums to Europe through the Marshall Plan”(Moyo 13). They were committed to stop communism’s spread anywhere in the world as they gave money to war torn Europe, and later to areas in Africa and Asia that had struggling governments uncertain of their political futures the US tried to give aid to the side with more democratic ideology. I was surprised that aid started as a selfish means of control on the side of the developed countries.ciausaussr
  3. The Washington Consensus is a term coined by economist John Williamson that refers to a set of points that are said to help developing countries developed by Washington based organizations IMF, World Bank, and US Treasury. Their recommendations are prescriptions that developing countries can take to help their economic situation while attracting more foreign investment. Some critics have argued that some of the points in the Washington Consensus like opening markets to free trade are not allows the best way to instigate growth according to economists. Also if they follow the idea they should borrow little from foreign governments their ability to invest in infrastructure.
  4. Moyo’s website is a good insight into the woman behind the book Dead Aid. What stood out to me was the amount of areas she has an expertise or interest, it seems she is interested in all aspects of the economic system.fta
  5. When Moyo quotes a critic of the western aid model saying “my voice can’t compete with an electric guitar.”(Moyo 27) because the critic is saying rock stars and famous musicians overshadow an informed voice on the issue. When the critic and others speak who really understand and know the situation firs hand they are not listened to with much enthusiasm. When someone like Bono comes in and has a concert for a cause such as giving aid to Africa even when he knows very little on the issue his voice is heard and overshadows all others. When Rwanda’s president Kagame makes remarks about geopolitical rivalries when talking about how the US and USSR propped up regimes just because of their political beliefs without any real desire to develop these countries. If they had focus on helping truly develop these countries much of Africa would be much better off today than it is.
  6. Moyo describes many reasons why she thinks that aid is not working in Africa from historical to cultural reasons. She emphasizes the importance of not focusing only on some of the reasons aid is not working but looking at the whole picture to get a holistic view of the issue at hand. If we look at the history of aid in Africa and the effect it had on development since it was going towards propping up governments and not infrastructure and development. Along with the cultural issues in many countries as the boundaries were decided by imperial powers did not take into account cultural differences which can split a countries public. If we only focus on these two issues it may appear to not be any fault of the developing countries as others have disadvantaged them for years and years. The truth is even after these issues Africa has done little to help them allowing corrupt governments to use funds incorrectly. I think her argument is clear as to why aid is not working and the varies reasons needed to be taken into account to understand why.phoca_thumb_l_aid-trap
  7. Aid is seen as such an important part of the African landscape that it is hard to imagine an aid free Africa. Those who have been giving the aid don’t see anything but chaos coming from a reduction of aid. Moyo sees a different path for economic successes in the region with “better ways for Africa to finance its economic development; ways that have been tried and tested in places as far-flung as India, Russia and Chile”(Moyo 68). If these countries can find a way to take of the shackles of aid and find other forms of investment and growth for their nation it will foster confidence and improve foreign interest and investment. I think this method of avoiding aid can be beneficial to certain nations if they are ready to open up their markets and can survive without the aid. Some nations such as Liberia who are going through crisis because of Ebola, the aid they receive is vital to helping stop its spread and contain the damage of the virus. Moyo does not want all aid to stop merely the method of aid, which involves “throwing money” at the problem. Things such as food supplies and other physical aid items she believes still have value to the most in need while the monetary aid is being syphoned off to the countries elite. In Liberia “With enough support from outside, “we could see a good sign of improvement” during the next two months, Jeremiah Sulunteh told The Associated Press”(AP The Big Story) shows that without outside help the Ebola problem will become an epidemic.
  8. Some of Sach’s recommendations to escape the poverty trap include, improving food security, agricultural productivity, stop preventable disease, access to drinkable water, and investment in infrastructure. Some weaknesses in his argument for breaking the poverty trap are the implementation of his recommendations. With such corrupt governments in charge when aid is given it is hard to dictate where the money will be spent, usually it is spent in ineffective ways. While investment in infrastructure would help a nation rise above the poverty trap, convincing a foreign nation to put forward the initial investment can be hard when the developed nation is not gaining any advantage. Moyo would argue to get a nation out of the poverty trap the nation must find other ways to bring money into the nation by following the example of nations such as China. If Sach’s ideas can get the right investment and implementation they can be viable options but if this becomes difficult or impossible looking at solutions such as Moyo’s can be valuable.

https://www.youtube.com/watch?v=9dL19B32rxU         Dambisa Moyo Dead Aid                               Part I: The World of Aid 48-68 Jeffrey Sachs The End of Poverty                   Chapters 13    pp. 244-265 Edward Miguel Africa’s Turn? – Readings-MDG&Africa-Africa: (pdf) foreword, 1-49 Goretti Kyomuhendo Waiting: a novel of Uganda at War pp. 71-87

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