Download Critical Book Review: Dead Aid by Dambisa Moyo

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
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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
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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