Saturday, July 26, 2014

Dead Aid: why aid is not working and how there is another way for Africa

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This book by Zambian economist Dambisa Moyo generated a lot of buzz when it came out in 2009. Given the buzz and the fact that it became a best seller, I expected something more solid, a data-heavy book like The Lords of Poverty perhaps. With only 150 pages to go over the history and the culture of aid and its impact on a whole continent, the book felt a bit on the lighter side.

It might be unavoidable. Of course, it’s extremely difficult to talk about a complex issue such as this without making generalizations. Then, there will be always at least one example that contradicts any statement or claim made, more so when it’s a heavily politicized and ideologically-charged topic.Which is not to say that the author has some very valid points.

Initially, the author seemed to have ben misinterpreted as saying that all aid in any circumstance was to be avoided—which she then clarified as not being the case. But even then it’s easy to see why some NGOs and donors jumped to attack the book and responded defensively. Let’s Moyo illuminate why that might be the case. She points out that, taken together, about half a million people, between the IMF, UN agencies, charities and NGOs, and government aid agencies, are employed in the aid industry:  

“Sometimes they make loans, sometimes they give grants, but they are all in the business of aid ... Their livelihoods depend on aid ... [In addition, f]or most developmental organizations, successful lendings is measured almost entirely by the size of the donor’s lending portfolio, and not by how much of the aid is actually used for its intended purpose. As a consequence, the incentives built into the development organizations perpetuate the cycle of lending to even the most corrupt countries. Donors are subject to ‘fiscal year’ concerns: ‘they feraed the consequences within their agencies of not releasing the funds in the fiscal eyar for which they were slated’ (Ravi Kanbur). Any non-disbursed amounts increase the likelihood that their subsequent aid programmes will be slashed. With the added corollary, of course, that their own organizational standing is placed in jeopardy.” (Moyo 2009, p. 54)

The little glitch in the aid industry is that NGOs and donor agencies, if they were to be successful, they should be working to make themselves redundant and to disappear. Once established, very few organizations and/or people are willing to do that (jeopardizing their existence or jobs/positions). And so the wheels keep on turning...

Most of the book, though, is forward-thinking, as Moyo proposes a number of alternatives to aid. Worth considering.

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