Sunday, March 11, 2012

Dead Aid: counter proposal

What if, one by one, African countries each received a phone call, telling them that in exactly five years the aid taps would be shut off - permanently? Although exceptions would be made for isolated emergency relief such as famine and natural disasters, aid would no longer attempt to address Africa's generic economic plight.

Would many more millions in Africa die from poverty and hunger? Probably not - the reality is that Africa's poverty-stricken don't see the aid flows anyway. Would there be more wars, more coups, more despots? Doubtful - without aid, you are taking away a big incentive for conflict. Would roads, schools and hospitals cease being built? Unlikely.

Isn't it likely that in a world freed of aid, economic life for the majority of Africans might actually improve, that corruption would fall, entrepreneurs would rise, and Africa's growth engine would start chugging?

-- Dambisa Moyo, Dead Aid

Moyo her scenario is thought-provoking. In the end, we all want to see a world that no longer depends on aid, right? That is the goal of all development, right?

Unfortunately she oversimplifies the complexity of development, measuring a country's welfare only through GDP and economic growth is shortsighted and is limiting the world to a purely economic model. Development goes much further than that.

My counter proposal is defined in the following five steps. It will demand a different view on the economic ties between Africa and the donor countries, especially where I ask to get rid of all outstanding (development) debt, but this is the only way to make the governments accountable again. Not accountable to their creditors, but to their own people.

  1. abolish all outstanding debt accumulated by loans in name of 'aid' (and their compound interest)
  2. stop putting pressure on countries to 'open their markets' or 'limit government interference'.
    If a country is interested in following this policy, it should be allowed to do so at its own pace
  3. governments should be accountable to their citizens (not to donors)
  4. aid in form of knowledge, experience and/or technology should always be provided
  5. the decision whether a project is in need of additional financial aid (outside of the local government) should be looked into on project level

1 comment:

  1. Paul Collier, Bottom Billion p. 119June 19, 2012 at 12:57 PM

    In countries where basic public services such as primary education and health clinics are utterly failing, the government, civil society, and donors combined could try to build an alternative system for spending public money. The features would be a high degree of scrutiny by civil society as to how the money was being spent; competing channels of service delivery, encompassing public, private, and NGO; and continuous evaluation to see which was working bst. The authority would be a wholesale organization for purchasing basic services, buying some from local governments, some from NGOs such as churches, and some from private firms. It would finance not just the building of schools and clinics but also their day-to-day operation. Once such an organization was put into place, managed jointly by government, donors and civil society, both donors and the government would channel money through it. As it demonstrated that it was spending money well, donors would increase the flow of money. If performance deteriorated, the donor money would dry up.


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