Francis Chigunta Reads Dambisa Moyo's "Dead Aid"

Dambisa Moyo is certainly doing what she set out to do, her book Dead Aid is becoming a major talking point.  This blog maintained earlier that this would be one of the most import books this year. We, that is, I, hope to continue facilitating a discussion on the book, so if, like Tinashe Murapata, you wish to send a review, let me know.  

Francis Chigunta, another reader,  has already taken up my invitation.  Here is his take on the book.  (You may also be interested to read this interview of Dambisa in the New York Times, where this photo is from. Sorry, New York Times, but it is such a great picture (I really like her style, check out the killer heels) that I could not resist filching it.  

On to Francis:

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Dambisa Moyo’s book is a refreshing addition to thinking on development aid.  She is urging all of us to begin to think outside the box. In my view, Tinashe Murapata missed the thrust of the argument in Dambisa’s book. Contrary to what Tinashe says, it is written in very simple, non-technical jargon that easy to follow.

Like Dambisa, I am not against forms of emergency or humanitarian aid that save lives but against the so-called development aid.  I feel terrible about the damaging impact of aid on Africa. So far, we are told that we have received over a trillion American dollars in aid since the 1940s, but what is there to show for all this apart from mass poverty? Which single country in Africa or indeed anywhere has developed as a result of western aid? Read also some of the references that Dambisa gives – books like Paul Collier’s The Bottom Billion and two recent ones by William Easterly formerly of the World Bank, which all support Dambisa’s arguments.

The success of come countries that have in the past relied on aid, but no longer do so today, is seen as testimony by some that aid works.  These countries are known as the International Development Association (IDA) graduates. They comprise 22 of some the most economically successful emerging countries– including Chile, China, Colombia, South Korea, Thailand and Turkey, with Botswana as one of the three African countries.  These countries have meaningfully lowered poverty, increased incomes and raised their standards of living, thanks to large-scale aid interventions. However, as in the case of the Marshall Plan, their aid flows have been relatively small – in this instance, generally less than ten percent of their national income – and the duration short. 

Today, as a result of aid, African countries have found themselves stabilised in a condition of non-development. African countries need to make the transition from aid dependency and aid dependent ‘development’ to endogenous processes of political, social and economic transformation and sustained accumulation. This means that we as Africans should serious begin to focus on broad-based, diversified, innovative, well-articulated and inclusive productive capacity development and trade, which Dambisa emphasizes. 

Paul Collier warns about the deformation of strategic thinking that results from over-emphasis on aid in poor countries: the strategies turn into shopping lists because the objective is not growth but aid. This is the dilemma that many African countries face today as their growth strategies are nothing more than shopping lists designed to get more aid from donors. African countries should seriously begin working on changing the structure and dynamics of their public expenditure to support and crowd in private investment and the development of viable, sustainable and competitive productive and trade capacities. This is what Dambisa is saying. 

We need to promote viable and sustainable entrepreneurship in highly competitive environments that will make it possible for us to maximise our gains from the globalisation process. In my view, the Chinese are welcome. 

Why are Western leaders falling over each other to go to China? China today is the engine of the world and is playing a critical role in stabilising the world economy at a time when the American economy is falling apart.  And yet some Africans are whining about the Chinese.  Which African country has China ever colonised? The Chinese Admiral, Gen. Hu, visited the coast of East Africa long before western powers did so, but the Chinese never colonised Africa. We need investment from, and trade with, China. That is the message of Dambisa’s book. No country in the world has developed on the basis of aid. 

The critical challenge for us as Africans is how to eliminate aid dependency and how can aid be used to achieve this goal. The fundamental issue is not how to manage aid dependency, but how to eliminate it. If one wishes to identify one single and simple indicator for aid effectiveness and efficiency, it should be the rate at which aid helps to end dependency by helping to develop broad-based, diversified and sustained dynamics of productive capacities, economic accumulation and social development. This cannot be a gift coming in form of aid, but a right to be sought and fought for through local ownership of the development process. 

We need new growth and development models that (1) link macro-economic and productive capacity development; resource mobilisation and investment for productive capacity development (not the unproductive ‘casino-type’ investment from Wall Street that has brought the world to the brink of economic disaster) and trade; (ii) that are consistent with sustainable poverty eradication, not only by reducing the number of people with income below the poverty line, but that eliminate the structural causes of poverty; and (iii) are broad-based, diversified and properly articulated.  We also need to go beyond the funds aid brings to explore the multi-dimensional impact of aid in recipient countries, especially on the psyche of the recipient people.  

The bottom line is that the World Bank and IMF have run of ideas. All they do is repackage old theories that are irrelevant to our situation. This is why Dambisa is encouraging us to think outside the box! Her ideas and suggestions are gaining currency. Let us all take up the challenge.