HOPE FOR AFRICA
I have written before that God obviously has great compassion for the poor. This is all through Scripture. I just finished a book that I believe gives more optimism for the poor of Africa.
Dead Aid is by Dambisa Moyo, a Zambian born woman who has a Ph.D in economics from Oxford. The first half of the book decries foreign aid. This is not too unusual, many people do. But she goes further. She says foreign aid hurts Africans. Okay. You ask what do I see as optimistic in that. The good news is in the second half of the book where she offers a menu of marvelous suggestions that would help the poor. Peter Collier, an expert in this field, says that Moyo’s ideas have to be taken seriously. If the generous people of the world would abandon foreign aid and switch to her suggestions, great and good changes could come to Africa.
WHAT IS WRONG WITH FOREIGN AID?
-During the past 50 years over one trillion dollars have passed from rich countries to Africa with very little to show for it.
-Between 1970 and 1998, while aid was at a peak, poverty in Africa rose 11% to 66 percent.
-Sub-Saharan Africa has 50% of the world’s poor.
-One in seven children in Africa die before the age of five.
-Africa is the only continent where life expectancy is less than sixty years.
-Aid fosters corruption and corruption disrupts rule of law, which is one of the foundations of a prosperous economy
-foreign aid foments conflict
-aid reduces savings and investment
WHAT ARE SOME SOLUTIONS?
-Create capital markets within African countries.
-Put less emphasis on infrastructure (this has been done unsuccessfully for decades) and more emphasis on breaking down man-made disincentives: corruption, bureaucracy, and excessive regulation.
-Improve the business environment. In Cameroon it takes 426 days to get a business license as compared to the United States’ 40 days. Starting a business in Angola takes 119 days, whereas starting one in South Korea takes 17 days.
-Use rich natural resources to advantage.
-Increase trade by reducing tariffs. The average tariff is 34% on agricultural products from other African countries. China has used free trade to lift hundreds of millions of people out of poverty.
-Use microfinance to create millions of small businesses through small loans. These loans go directly to poor. They do not pass through the government. They are repaid over 95% of the time.
Many of the prescriptions in Dead Aid for economic health are unabashedly market based. We have tried the welfare approaches and they have been a miserable failure. They have reduced incentive, increased dependency and propped up national leaders who are bad for their countries.
Dead Aid is not technically a “Christian” book but Christians will love it. In it we find hope for the poor of Africa.
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