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2009 Critical Book Review: Dead Aid by Dambisa Moyo Aid on Life Support Jayne Ingram Mr. Pavey CPW 4UI 11/25/2009 Aid on Life Support From a young age, most well-off North Americans are taught that in order to live a moral life, one must do all that can be done to aid those who are less fortunate on the other side of the world. One must eat everything off their plate at dinner because there are children in Kenya who would sacrifice everything for only our crusts. One must be grateful for everything Santa brings for Christmas because there are children in Rwanda who will get nothing at all. One must throw a loonie in the charity box at the local coffee shop because that will provide a day’s worth of meals for a family in Zambia. However, Dambisa Moyo, author of Dead Aid: Why aid is not working and how there is a better way for Africa 1, has a different perspective of what North Americans should be doing to help our counterpart on the other side of the world. Dambisa Moyo is no stranger to the lifestyle of Africa. Born and raised in Lusaka, Zambia, Moyo knows full well what it is like to live in a struggling society of a Third World country. Moyo holds a Doctorate in Economics from Oxford University and a Masters from Harvard University’s Kennedy School of Government. Moyo worked as a consultant for the World Bank from 1993 to1995 and then at Goldman Sachs from 2001 to 2008 as an economist in the debt capital market.2 She is extremely familiar with international relations, capital investment, and foreign policy as well as what is needed from the perspective an African to make living in Africa better— knowledge she calls upon in establishing arguments within her book. Moyo’s Dead 1 Moyo, Dambisa. Dead Aid: Why aid is not working and how there is a better way for Africa. United States: Farrar, Straus, Giroux, 2009. Print. 2 Rearden Solutions. “Dambisa Moyo.” Dambisa Moyo. September 21, 2009. Rearden Solutions. Web. November 21, 2009. < http://www.dambisamoyo.com> 2 Aid was published earlier this year (2009) and serves as an eye opening tool to the North American public as to another side either than aid that can be used to stride towards eradication of poverty in Africa. She wrote the book to show the North American public that there is a better way, according to her research, to help Africa. Moyo aims to inspire change in this present society where the North American economy is crumbling, and slowing taking Africa along with it. She uses relatively simple language and includes personal, relatable analogies of case-bycase situations to express her view that she believes must be made public knowledge. Dead Aid is a very current book with astonishing facts and convincing arguments written by a credible author; the first section of the book is overflowing with enlightening facts and explanations. The second part lays out a seemingly perfect plan to solve the long term poverty tribulations of Africa. However, it is hard to accept that Dambisa Moyo seems to state her ideology as fact; she occasionally misplaces blame, contradicts herself, and omits the short term tragedies her plan would surely bring forth. Dead Aid covers the topic of poverty and the economy in Africa. It focuses on the aid that is pumped into the African economy, how that aid is used (or misused) and the effects it takes on society and individuals. The book is organized into a very systematical format. It is separated into two sections with distinct ideas that link together to form Moyo’s grand thesis: today’s aid system has not worked and will continue to enable the African economy to spiral downwards (the first section of the book); we need to encourage Africa to stimulate their economy 3 using tactics that will better the continent in the long run aid is given today, it is a waste of North American money as it urges on Africa’s poverty related devastations, doing little to set Africa up for a brighter future. In part two, Moyo suggests solutions to help the African economy: solutions involving both the bettering of the use of aid as well as solutions involving weaning the continent from aid all together and finding new economic stimulators. Moyo is surely not against helping Africa, but rather believes that foreign aid is doing more harm than good and we must come to a consensus as to another way to stimulate Africa if the continent is ever to prosper in the future. In part one, titled ‘A World of Aid’, Moyo discusses the persisting poverty in Africa regardless of the billions of dollars pumped into the continent. She begins by setting the scene of a famished, struggling-to-survive Africa; stating devastating facts such as the average per capita income in Sub-Saharan Africa is merely $1.00 US per day, life expectancy is approximately 50 years (in some countries as low at 30), one in seven children die below the age of five, and half of Africa’s population is below the age of 15.3 Moyo proceeds to examine the root of recurring African poverty: aid. “Are Africa’s people universally more incapable? Are its leaders genetically more venal, more ruthless, more corrupt? Its policy-makers more innately feckless? What is it about Africa that holds it back, that seems to render it in incapable of joining the rest of the globe in the twenty-first century?”4 According to Moyo, the answer is most definitely aid. After giving a brief definition of aid and its founding within the Marshall Plan5 —a program to finance 3 Moyo, Dambisa. Dead Aid: Why aid is not working and how there is a better way for Africa. United States: Farrar, Straus, Giroux, 2009. Print. 5 4 Ibid, 7 5 Ibid, 10 4 and rebuild the devastated countries in Europe after World War II— Moyo moves on to argue why aid may be feasible in Europe or other developed countries, but simply cannot function in Africa for a number of reasons.6 In the chapter titled ‘Aid is Not Working’, Moyo lists and argues these reasons. The first being that in Europe, the Marshall Plan was based upon recovery and rebuilding, not building from scratch. In Europe, aid never accounted for more than 3 per cent of the GDP while in Africa it accounts for almost 15 per cent. Moyo states that “the Marshall Plan was also finite”7, meaning that the Marshall Plan had goals and was only to last five years while Africa has received a constant cash flow for 50 years. This brings Moyo to the argument that Africa has no incentive for long term financial planning or seeking alternate forms of funding. She continues to argue that one of the large problems with North American aid is that with the aid, pushing Africa towards democracy comes with it, stating that “donors are convinced that across the political spectrum democracy is positively correlated to economic growth”8. Moyo believes however that democracy is no prerequisite for economic growth and that rather a benevolent dictator (emphasize the benevolence) is the only way to push the continent from a slumming economy. Moyo then moves on to describe another form of North American aid with its own faults. Often the West sends aid in the form of tangible goods (a seemingly perfect solution for her next argument that the government is often corrupt with its spending). However, these goods take from local suppliers’ markets putting them out of business and removing income from all employers (who often support 6 Ibid, 36 Ibid, 36 8 Ibid, 42 7 5 upwards of 15 family members)9. The next identified fault of aid is the government corruption it fosters. Moyo refers to a study done by Alesina and Weder uncovering that when governments’ revenues increase, public spending in fact decreases.10 In the 1990’s, “aid-fuelled corruption was so rampant that only 20 cents of every US$1 of government spending on education reached the targeted primary schools”.11 Moyo concludes that aid promotes corruption, inflation, discourages saving and investment, and in total any hope of economic growth. In the second part of the book, Moyo analyzes different solutions to aid Africa’s economic growth without aid. The basis she focuses on is that African governments could and should seek alternate forms of wealth through international and domestic financial markets. She discusses seeking Chinese investment. She states that “its economy has grown as much as 10 per cent a year over the past ten years, and it desperately needs the resources that Africa can provide”.12 Moyo also believes that as opposed to seeking aid, Africa should seek fairer trade regulations and become a more involved party in the world investment market.13 Moyo takes a very optimistic approach to laying out an investment plan that she guarantees will prove to be successful in the long run. Moyo uses a great variety of sources to supply concrete facts to the reader in part one and runs with the ideas of credible political philosophers in the second part. The first section is filled with facts and statistics obtained from the United Nations’ and World Bank’s databases. She refers to several documents from aid 9 Ibid, 44 Ibid, 52 11 Ibid, 53 12 Ibid, 103 13 Ibid, 115 10 6 organizations as well as other books covering similar topics to hers such as Challenging Foreign Aid by Radelet. She as well refers to articles and books covering the opposition topic of why aid is needed, meaning she has clearly explored both sides of a controversial topic. Moyo’s sources are less statistic heavy in the second half of the book. She refers to several articles, books and a broadcast, specifically from other countries such as India in which weaning from foreign aid has been attempted. The main focus however, is her personal ideology she has constructed based on both fact and opinion. Dambisa Moyo uses facts and evidence to build a foundation for readers based upon credible sources and then upon that foundation, persuades them to support the possible solutions she suggests. The conclusions she reaches leave little for readers to doubt; that is, until they begin to analyze every aspect and outcome of what she is suggesting. Dead Aid is an extremely persuasive book; the arguments are well laid out and are well supported by clear examples and substantial facts. Dambisa Moyo is a well acclaimed economist of African heritage; there is little reason to doubt her credibility. Moyo’s argument that aid is not working leaves little to dispute. It is widely known that Africa is in economic peril and that Western governments have been pumping billions of dollars across the ocean for half a century. When one puts the two together, there is evidently something wrong with the transaction of aid, due to the lack of African development we have witnessed. Moyo offers great insight as to why aid is not working, or in some cases, where it is going. 7 However accurate Moyo may be, she does omit some important facts, and as well fails to analyze all possible outcomes of the proposals she makes to cure Africa’s poverty. It is well proven that aid had not been successful in getting Africa off its feet and running at pace. However, there is little proof that Moyo’s suggested financial plans will work or even have the equivalent positive effect that aid currently does, however little it may be. Moyo’s book serves as an effective, eye-opening tool, but may not contain viable solutions to the problem Moyo and many others wish to solve. The first arguable point that Moyo makes is that one of the reasons North America should cut aid is because corrupt African governments are not able to put it to good use. Aid discourages them from investing and building a base to push their economy forward. However, if a lottery winner blows all their winnings on frivolous, unnecessary goods, is the blame to lie on the lottery company? In the case the United States? Perhaps some blame should be put on the lottery company if they gave the winner (Africa) all their winnings (aid) at once and perhaps it would be of good nature for them to warn and educate the winner on spending in moderation. Is North America really to blame for Africa’s faults in financial investment? This leads to another point Moyo makes that may not be entirely accurate. Moyo believes that democracy is not at all necessary in the beginning of sparking economic growth amongst Africa. Moyo makes this assumption based upon what is important to individuals rather than the entire continent. But, is the well-being of Africa not beneficial to each of its citizens? 8 “In the early stages of development it matters little to a starving African family whether they can vote or not. Later they may care, but first of all they need food for today, and the tomorrows to come, and that requires an economy that is growing”.14 However, a democratic environment may be key to raising effectiveness of foreign aid. If parties were forced to present a platform that would be selected by the African citizens and were forced to live up to their promises, especially relating to the African budget, it would be a way for the West to positively control Africa. Not control their government, as Moyo implies, but simply implement a system where all of Africa can have a say in where its money is spent. It will be used build to an economy, supply necessary goods to citizens, and create jobs to jump-start their economy rather than shipped to secret banks by power tripping politicians.15 Moyo is not wrong in saying that democracy is not a top priority of Africa, but the distribution of wealth it may bring presents a potential solution to making aid work. The reason Moyo wrote Dead Aid was not to expose the tragedies of Africa, or to expose why aid does not work, which she discusses during the first section of the book. Part two holds the purpose behind Dead Aid. Moyo proposes several means to boost the African economy. She uses hard evidence to explain why her solutions will have a positive long-term effect on Africa. What she fails to include however, is the short term effects cutting Africa from aid cold turkey would bring. Moyo persuasively convinces readers that the long term effects of cutting aid would increase government independency, reduce corruption, and altogether eradicate poverty. Her evidence backs her reasoning extremely well; however, 14 15 Ibid, 44 Ibid, 53 9 she omits the drastic fall the economy will face in the beginning. When aid is cut, it will take time for the government to gain a net worth. In the meanwhile, they will have to tax citizens while providing little to no services in order to build wealth. There will be children who will not be able to afford school supplies and will need to work to support their families; there will be deaths when the sick cannot afford medical treatment. Moyo places a heavy emphasis on the necessity of Chinese investment in Africa.16 The Chinese are without a doubt a power on the rise. They are in the process of boosting their economy, and have the means according to Moyo to tow Africa along with them. Moyo suggests Africa target China with their natural resource market as well as stationing sections of Chinese industries within Africa. Moyo, this time, does concede possible negatives of this solution; China has a reputation for unfair trade, and would likely have Africans working in a sweat shop environment if they were to expand into African territory.17 She resolves this argument by stating that “this is where African governments should step in and regulate”.18 However, is this not the same principle she earlier deemed Africa incapable of? Did she not declare that aid should be halted because corrupt African governments are not capable of regulating an economy and society? 19 This oxymoronic statement again steals from Moyo’s credibility. It seems unlikely that Moyo, given her credentials, would be unaware of these effects, but simply omits them to convince her followers to remain on her 16 Ibid, 103 Ibid, 107 18 Ibid, 111 19 Ibid, 52 17 10 side. When one looks at what will be sacrificed to achieve this brighter future, one begins to doubt whether a prosperous future is worth the lives of today. One may doubt Moyo as she does not prepare followers for all outcomes of what she suggests. Although this book may not always explore topics as far as necessary, its contribution is still immense. While the latter half of the book is somewhat misleading as Moyo has a bias against aid and does all in her efforts to convince readers to see the same point of view as her, the first half of the book is extremely factually accurate and eye opening. It serves as an immaculate tool to show North America that there is something wrong with the system in which aid is given to Africa. It only falters as Moyo continues to argue that changes must be made to cure this epidemic. She pushes too hard to convince readers that there is a concrete solution when it is impossible to know if her solutions are in fact the correct ones, or if there are any solutions at all. Admittedly, it would be a devastating read if the problems of aid were outlined and it was concluded with questioning whether it is simply an inescapable cycle of poverty. After analysis however, it is difficult to tell if Moyo believes entirely in what she is writing, is under-researched, or simply wants to move books from shelves. Dead Aid is written at a reading level no more difficult than that of a national newspaper. Moyo uses analogies, examples and clearly explains everything she discusses. The first half of the book should be made known to all of the North American public so that they can gain further comprehension of why Africa is not a lazy or unaware continent, but is simply wedged in a continuous cycle of poverty. 11 The second half of the book should be read by politicians, aid workers, and others willing to research or who are already aware of international relations and aid policies. Moyo’s slightly biased solutions are well-written and will easily sway citizens to her side who are unaware of the potential consequences of her proposals and of other less explored options. In conclusion, Dambisa Moyo’s Dead Aid may hold a slight bias that is reflected in her placement of blame as to why aid does not work as well as in her perhaps unrealistic proposals to cure Africa’s poverty. In spite of this, the book still makes a substantial contribution in teaching North America why aid is not working, pointing out simple flaws that can be tackled one by one, and inspiring (not promising) a hopeful future for a continent that has experienced despair for so long. Dead Aid holds a very controversial message from what North America has become accustomed. Its factual basis proves to society what they likely do not want to hear but need to know. Though the second half of the book may not hold a concrete foundation, it serves the purpose of exposing different options to solving a problem that is not solely Africa’s or North America’s to solve, but a collaborative effort for these two global partners and the rest of the world. 12 Bibliography Moyo, Dambisa. Dead Aid: Why aid is not working and how there is a better way for Africa. United States: Farrar, Straus, Giroux, 2009. Print. Rearden Solutions. “Dambisa Moyo.” Dambisa Moyo. September 21, 2009. Rearden Solutions. Web. November 21, 2009. < http://www.dambisamoyo.com> 13