Saturday, March 21, 2009

Foreign Aid and Africa

The abysmal record of foreign aid in Africa is generally a hallmark of foreign aid everywhere - and while it's not something that the west is as concerned about at the moment, as it struggles to emerge from over leverage and bad government policy, Dambisa Moyo pleads for change in a WSJ article:

Giving alms to Africa remains one of the biggest ideas of our time -- millions march for it, governments are judged by it, celebrities proselytize the need for it. Calls for more aid to Africa are growing louder, with advocates pushing for doubling the roughly $50 billion of international assistance that already goes to Africa each year.

Yet evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher-quality investment. It's increased the risk of civil conflict and unrest (the fact that over 60% of sub-Saharan Africa's population is under the age of 24 with few economic prospects is a cause for worry). Aid is an unmitigated political, economic and humanitarian disaster.

It's a cruel irony that aid often hurts the people it's intended to help. The solution? If we're not going to spend the time to develop bottom up, long term incentives for made-at-home growth? "Cut it off."

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