[VIEWPOINT]Aimless aid no help to AfricaBetween musician Bob Geldof’s “Live 8” rock concerts and the G-8 summit in Scotland’s Gleneagles, the world has pledged to save Africa. The UN’s Commission for Africa wants $25 billion more per year, and Britain’s Tony Blair calls for the doubling of Western aid to Africa. Two million people attended the concerts, two billion watched them on TV. Africa has shot to the top of the global agenda, and that is all for the good.
Not so good is the record of foreign aid to Africa over the past 30 years. Just two statistics: Life expectancy in sub-Sahara Africa has been declining since the mid-1980s; it is now down to 45 years. Per capita income is similarly down from about $2,000 to $1,700. Massive foreign aid, in other words, does not correlate with growth in prosperity and health.
Here is a sad example of how aid does not work. At the World Economic Forum in Davos, Switzerland, this year, the actress Sharon Stone spontaneously started a collection for mosquito nets that would protect infants against malaria. A worthy cause, but it has not worked too well in the past. Free nets threaten local producers, so Nigeria used to slap on heavy tariffs on imports. These nets have to be regularly sprayed with insecticides, but most of the recipients do not know how. Finally, the Ugandan government recently warned villagers not to turn the nets into wedding gowns.
The point of this tale is: Giving is great, but success is another issue. The poorest African nations now depend on foreign aid for 20 percent of their budgets, which suggests that they have become permanent welfare recipients and may not have a real incentive to reform. Worse, free money tends to corrupt, and lots of it even more so. This is as true for oil-rich Arab countries as it is for the poorest in Africa. When there is a steady flow of income that goes to governments, private enrichment takes precedence over public welfare. Worse, as in Africa, that money will finance weapons, and war is the worst enemy of economic development.
Aid also tends to destroy local industries. The best case is the Ethiopian famine of the 1980s. Well-meaning Western governments and nongovernmental organizations shipped millions of tons of grain to the war-stricken region. That was the end of the local grain-growing sector.
What about medical aid? Africa cries out for it because it is in the grip of epidemics ranging from parasitical worms via malaria to HIV. Alas, as a Ugandan study has found out, three-quarters of the free drugs “disappear” on the private market or are given to “ghosts” ― patients who do not exist.
Finally, there is the long-term historical record. All the successful examples of post-war development have taken place in countries that were not overwhelmed with foreign aid. China, India and Vietnam all reached the path to an economic acceleration by drastic internal reforms, which strengthened the markets over governments. The same story unfolded in East Asia where all the “Little Tigers” ― from South Korea to Malaysia ― relied not on foreign aid but on market-based reforms that attracted foreign investment and triggered sustained growth.
So what about Africa? Shall we just wring our hands in despair? Above all, the issue is public health. The Economist just reported an astounding tale of success. Thirty years ago, a campaign against “river blindness,” carried by the parasitic black fly, was launched, now encompassing 26 donors and using worm-killing drugs given away by pharmaceutical giant Merck. The campaign has saved the sight of 600,000 people and opened up 25 million hectares of fertile land to planting and harvesting.
But there was even more. Children suffering from the worm were too listless to go to school. Now school attendance in the area has shot up from 15 to 30 percent. The moral of this tale? Aid can help if it’s done right. Africa’s problems begin way before the point where economic activity sets in. Two critical preconditions of economic development are health and schooling. For without health, people can’t even begin to work, and without education they can’t even dream of competing with the rest of the world.
So let us not turn help for Africa into an orgy of good will celebrated by “Live 8” in rock concerts around the world. Let us also avoid the kind of “competitive compassion” present at the G-8 in Gleneagles. It is not the sheer size of the dollar pot that matters, but how the money is spent. Schooling is vital, but here, too, there is a cautionary and, in the end, heartening tale.
In the early 1990s, the World Bank carefully tracked how its money for Ugandan schools was spent. It was a disaster because only 13 percent of funds actually reached the schools, the rest having disappeared into the pockets of “ghost workers” and officials. Now the good news. When the findings were published in local newspapers, a storm of protest broke lose. As a result, a miracle unfolded: By the end of the 1990s, almost all the money reached the schools.
In other words, foreign aid above all must create the right framework within which it can be spent. No, we won’t stop corruption and graft. But the more tough conditions and sustained oversight the donors impose, the more of our money will reach those for whom it is intended.
* The writer is the publisher-editor of Die Zeit.
by Josef Joffe