Dead Aid Book by Dambisa Moyo. Book review by Prof Owen Sichone
Prof Owen Sichone: PhD Cantab. (University of Cambridge), prof at University of Pretoria (Please credit all references when using this paper in your research, etc) Dambisa Moyo, 2009. Dead Aid: Why aid is not working and how there is another way for Africa, Allen Lane: London, 188p + xx ₤14.99/R182.00 188pp The most important message that this book contains is that Africa cannot live on aid forever and that the would be life support machine will have to be switched off at some point just as the Marshall Plan for the reconstruction of post-war Europe was only tolerated for five years. Unless one believes that Africa is a child forever doomed to depend on Europe's Lomé Convention and Live Aid food parcels, one had better start working for a world without systematic aid.
The path that takes Moyo to this startling yet obvious observation is actually a well trodden one. Many generations of African scholars have already argued against dependency in general and aid dependency in particular. Who among us does not know the Chinese saying about teaching a hungry man to fish?
And the critics of aid dependency have not all been African. Journalist and humanitarian aid worker Graham Hancock's The Lords of Poverty was just one example of a more detailed exposé of the corrupt and corrupting global aid industry especially the slow moving UN juggernaut and the blonde bombshell in land filled with flies variety that international NGOs thrive on. But Moyo as an economist offers much more than the moral critique of imperialism that Hancock gave– she actually suggests a ''better alternative” to the malevolent gift of aid in a language that the neoliberal Washington Consensus managers and other policy makers that have managed the 60 years of failure can understand. She is speaking truth to power in their own language a liberalized global market and it is thus rather difficult to brush her aside as just another dependencia hack from a Third World country.
Her formula is as follows: Aid tends to corrupt states, citizens and markets and has not delivered on its promises over the last 60 years, trade is better than aid for putting money in people’s pockets and taking them out of poverty; and the development of regional and Pan-African domestic markets is even better for it frees African producers from EU control. Moyo's main argument is thus that there are better alternatives to western aid as an engine for economic growth, several options have been used successfully by other countries and only African leaders seem to have put their countries' fates in the hands of foreign aid donors. The argument that African development should not be tied to European aid or even European markets is one that many people support and which several scholars, former aid workers and even African politicians have written about in the past. But what Moyo does that is new is that she spells out the alternatives in the language of the economist and not political activist, we shall see later that in the end the little matter of “political will” will loom large and veto most of well thought out suggestions. Politics, as far as development goes, is always in command – for better or for worse.
Dead Aid is dedicated to Peter Bauer and it is clear why for his argument that aid diverts our attention from production to politicking – and what a diversion! is central to Moyo's analysis of the African malaise. How many of us have not spent a good portion of our careers trapped in endless good governance, HIV, human rights, gender mainstreaming etc. seminars when we could have been in the field doing crop trials? Have the best of Africa's civil servants not spent the last twenty years dozing in donor funded air-conditioned hotel conference rooms waiting for the buffet while outside the planting season went unplanned? Yes aid does corrupt and stunt the growth of those doomed to playing the role of grateful recipient because the road to poverty is paved with development aid as many a critic of development in Africa has already proved.
Moyo's book opens with a sympathetic foreword from Niall Ferguson who announces that after reading it he was left wanting ‘…a lot more Moyo and a lot less Bono’ (pxii). Well nuff respec to U2 and all – but should Africans consult a pop star or a well trained economist when grappling with issues pertaining to their future economic growth and development? Moyo argues that only in Africa is this mistake made. And we have to agree: America does not pay much attention to Madonna's views on Iraq, the global melt down or even dieting does it?
In the preface she gives some background to her own upbringing in Zambia and her journey from UNZA where she was studying chemistry (until one Mubanga Luchembe decided to try and overthrow President Kaunda) to Harvard and Oxford. She argues that although Africa is not one country it nevertheless faces common challenges thus she contrasts Zambia (10 million people 72 different dialects) with Zimbabwe (similar population but only two major ethnic groups Shona and Ndebele). It is the British Colonial administrators that first claimed that Zambians speak 72 or 73 languages our own linguist Mubanga Kashoki’s research showed 30 years ago found only 20 or so different dialects and most are mutually intelligible. Would we be surprised to find that most Zambians today are probably competent in one or more of the seven main languages and society is a lot less heterogeneous than the figure of ‘72 tribes’ suggests? But that is just another example of how Africa remains a European idea even when conceptualized by young Africans who were born free.
In a very short introduction Moyo spells out what our ‘culture of aid’ is and how it dominates our lives and tells us why it's ‘… the single worst decision of modern developmental politics’ (xix). Strong words indeed – no wonder the do good brigade is up in arms. But it is very difficult to disagree with her when one looks at the 60 years of failure. Indeed as long as the failure was only African it was easy to sigh and sign another cheque for these people who lack basic life skills but since Moyo blames the mistakes, the criminal negligence and the pestilential poverty in part on the aid policies and practices of the western donor nations, it has become a rather unpleasant task to review the record of aid.
And so in the first chapter she dispels the myth of aid as good and shows that in Africa stock markets predate development aid. Evidently one need not really ask whether private money markets can fund railways, telecommunications or new mines, we know they can. But somehow African politicians seem to have put their collective and individual hopes in foreign aid though it has so far failed to deliver them from poverty. Take for example the recent revival of economies across Africa was it due to increased aid? No, Moyo links it to 1) increased export revenues on the back of higher commodity prices in response to the boom in Asian manufacturing; 2) economic structural adjustment in the 1980s and 90s; and 3) political democratization in the 1990s. She does not say that the latter two were driven by the donor community (IMF conditionalities for example) but instead argues that most of Africa remains economically and politically dysfunctional – and why? ‘The answer has its roots in aid’ (p7). Humanitarian aid and charity aid respond to particular disasters and have their merits – generally, though even they engage in the five star lifestyles and corruption that Hancock exposed but also in market distorting activities that Dambisa the economist is most critical of. The main problem, however, and the subject of her critique is systematic bilateral or multilateral aid in the form of loans or grants - that is a key component of northern countries foreign policy tools and which from an African politician’s perspective provides an easy source of money. The Bretton Woods Institutions are a much criticized relic of the post-WWII Cold War power deals and we need not review their history here suffice it to say that they have fifty years of failure behind them and whether they like it or not – a change is gonna come.
Aid effectiveness studies suggest that countries like Botswana that prefer their own development agendas and what the Kaunda administration in Zambia once called ''growth from own resources'', are better at making use of aid. What the lesson of Botswana ought to be is that if you have a good team managing the ship of state, you will not need foreign aid. A NORAD study on the contrary claims that aid is most effective when made up of technical assistance -i.e. European money, European carpenters and plumbers, each with their own Pajero, computers for the African government offices – whether they need them or not, can use them or not, can afford the consumables or not. And this not including the accursed seminars and workshops that take our own most qualified technocrats out of their offices and laboratories into the slumber and idleness of the conference rooms, project reports and funding proposals for the next tranche of aid. If you have a well run administration and a sizable well educated civil service what do you need TA for? Former World Bank staffer Ashraf Ghani has also warned his own government in Afghanistan against donors offering TA that you do not need, small amounts of aid that will not deliver much by way of poverty eradication but will trap scarce office personnel in endless report writing. Aid should be short term, selected and prioritized by the host country and make as much use of local resources as possible.
Moyo's rejection of aid as panacea is based on the following aspects/impacts: 1) aid can be inflationary; 2) it chokes off the export sector; 3) it causes absorption capacity bottlenecks and makes poverty expensive and 4) politically, aid renders local tax paying citizens irrelevant for the well being of the donor driven regime that serves very happily on handouts from its cooperating partners and in the process “ Thus aid erodes the essential fabric of trust that is needed between people in any functioning society (p59). If you see yourself as a citizen of DANIDA as a Tanzanian NGO owner once described herself do you have any time for the local state or your fellow citizens? Aid works for some but for many it approximates a modern system of taxing the poor so that the rich can build their equivalent of pyramids and great walls in the freewheeling lifestyles, power, prestige and corruption that Hancock described in his book, resulting in the net transfer of capital from poor to rich countries, from aid receivers to donor countries that Moyo refers to.
At independence in the 1960s, oil rich Nigeria and mineral rich Congo soon succumbed to civil war. Copper rich Zambia remained stable, recorded double digit growth on the back if ISI and implemented a far-reaching reorientation of its international trade from Southern Rhodesia and South Africa to East Africa. But in the end Zambia the front line state and Zaire the original kleptocracy wound up with huge debts and falling standards of living. The generic African republic of Dongo has a predominantly young population with no hope and no future. This is the reason why aid must stop.
Fela Anikulapo Kuti was once returning from a tour of Germany and saw Sam Nujoma's SWAPO entourage returning to Angola from a visit to East Germany. The SWAPO members were shouting ''Aluta continua!'- And Fela in his innocence did not know what it meant. When they translated it for him and when he saw that Comrade Nujoma was traveling first class he was moved to sing The Struggle Must Stop. How can you wish for the struggle to continue given all the suffering that it entails? If you sacrificed your business class privileges and transferred the savings to the war efforts would the struggle not end sooner? That was Fela's argument and we can see aid in the same way. So Moyo is saying: The Aid Must Stop! And the sooner the better.
But what is the alternative to aid? Well Africa could raise money through bonds from the capital markets where a stronger discipline will be enforced and the borrower is forced to repay as quickly as possible or suffer the penalties of higher interest payments. Bilateral aid on the other hand is designed to last forever in the name of international relations. There are no ready donors in the bond market, they have to be wooed and they are on the lookout for good managers rather than loyal Mobutus. Why can't Africa tap the markets? Probably because aid is easier to obtain. Clearly Moyo gives the money market more trust than it deserves but since Africa has never used that option on any significant scale and since we know what the trouble with aid is already the Bono, Jeffery Sachs cool aid campaign for doubling aid to Africa is clearly not the way we want to go.
What is to be done? 1) campaign for free trade and not more aid; 2) increase trade with and FDI from India and China to develop key infrastructures across the continent; 3) above all trade with other African countries - the Pan-Africa and even regional economic communities present opportunities for huge untapped markets; 5) bring the poor into money markets by micro financing and granting them secure tenure to communal and informal land and other property systems a la Hernando de Soto; 6) use remittances from migrant and diasporic workers as an alternative to aid; making people's savings work for the economy - and 7) get the politics sorted out.
And there's the rub. ''The Dead Aid proposal is dead easy to implement. What it needs and what is lacking is political will. Political incentives are stacked against making the call (148). So now you know why 60 years of failure in the aid industry has not resulted in a switch to better alternatives. Is a new generation of African leaders likely to say no to aid? Will business with China put democracy and human rights on the back burner until African poverty has been cut down to size? Did Barrington Moore not already demonstrate that there are democratic and non-democratic routes to economic growth, industrialization and higher standards of living? Is democracy possible in the land of the poor? Are human rights viable in a society of landless peasants, jobless workers and homeless orphans? Dambisa Moyo does not attempt to answer all these questions but she more than anyone else has declared that aid must stop, not immediately but maybe after five years. Aid has failed and will always fail to do anything more than keeping people alive in the face of natural and political disasters. But since aid has never really delivered on western pledges and promises, sooner rather than later we will have to “'Make the cycle stop’’ (p154). That is the message in Dead Aid and now we must all make it a political demand or repeat the cycle of debt, disease and dictatorship. Moyo's book is not a development economics textbook, it is not even a polemic against aid it is a call to rethink, look at the obvious and the undeniable and ask yourself how and when it will all end. References * Hancock, Graham 1989. Lords of Poverty, London: Macmillan
* Porter, Doug, Allen. BJ & Thompson. Gaye, 1991. Development in Practice: Paved with Good Intentions, London: Routledge.
* Sichone, O.B. 2005. ‘The Relevance of Liberation Ideology for NEPAD’ (PDF file), CODESRIA Bulletin. Number 3 - 4, (Article also in New Agenda South African Journal of Social and Economic Policy, Issue 23, Third Quarter 2006, 49-50pp.) Prof. Owen B. Sichone, (PhD Cantab.)
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