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Philip Li
Humanities 76
Ms. Cormier
December 6, 2015
Foreign Aid is Detrimental to Africa
“Give a man a fish and you feed him for a day; teach a man how to fish and you
feed him for a life time.” In the past five decades, about one trillion US dollars worth of
foreign aid had been spent futilely on Africa. In developing countries, poverty rates have
escalated, debts have increased exponentially, and numerous conflicts have arisen. Most
importantly, foreign aid plays a role in all of the issues stated above. On September 25,
2015, world leaders adopted the new set of sustainable goals aimed for 2030. One target
of Goal 17, Partnerships of the Goals, was to increase the foreign aid to 0.7% of the
GDPs of developed countries. This paper will demonstrate, contrary to the UN goal, how
foreign aid is not only harming developing countries, but also changing the partnership
between the developing and the developed to reliance. This quote about the selfsustainability of the Third World demonstrates why foreign aid, or “official development
assistance”, had not been effective. Aid sent to Africa did not facilitate African countries
to achieve self-sustainability, but rather caused African countries to lose responsibility to
achieve growth themselves. In the long run, aid has placed Third World countries into a
predicament: a cycle of dependency and regression. These detrimental effects of foreign
aid to the Third World are caused by the corruption in African governments, the
bureaucratic characteristics of African democracies, and most importantly, the
contingency of African Nations on foreign aid.
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In the past five decades, foreign aid has not been effective in LEDCs (Less
Economically Developed Countries). Around one trillion US dollars worth of foreign aid
has been endowed to developing countries in the past five countries. On the contrary to
people’s expectations, Third World countries are deeper in debt, more frequent in
poverty, and more severe corruption than past years. Foreign aid resulted in little
economic benefits in LEDCs. One reason is that aid was not intended for growth of
African economies. Rwanda's President Paul Kagame said “the primary reason that there
is little to show [for the more than US$300 billion of aid that has gone to Africa since
1970] is that … much of this aid was spent on creating and sustaining client regimes of
one type or another, with minimal regard to developmental outcomes on our continent.”
Many times, aid was for the benefits of the countries sponsoring aid, like in the cold war,
when “foreign aid was viewed as a means of propping up ‘friendly’ governments in Asia,
Africa, and Latin America” (“Introduction to...”). Also, many loans to LEDCs had high
interest rates that allowed developed countries to make more money and third world
countries to be deeper in debt. Aid, however, should be solely or at least for the most part
intended for the progress of developing countries. Or else, it will result in a bureaucracy
of parties having different interests and not achieving success. Another way the
inefficiency of aid can be shown is the lack of motivation for sponsors to continue their
donations. In one survey, “82 per cent of respondents said foreign economic assistance
should be cut” (Moyo). Whether donors do not believe the aid model succeeds, or they do
not have the budget, donors' interests in sending aid to Africa has shrunk and will
continue to shrink. Foreign aid is highly unpopular from the public view. Hence, very
likely possibilities have emerged: one, that aid was not efficient in the past explaining
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why sponsors currently find it not worthwhile to provide aid, and two, aid will greatly
decrease in the next few decades due to the declining interests of donors. These
possibilities suggest the inefficiency of aid in the past or the future, or both. On the other
hand, in comparison to the African LEDCs that received significant amounts of aid, many
Asian and South American countries have received less amounts of aid (e.g. China).
“Foreign aid to Asia in regions like East Asia was small in comparison to the aid given to
sub-Saharan African countries” (Wang 7). Asian countries, like Japan, South Korea, and
China, however, managed to achieve more sustainability in comparison to African
countries. “For many developing countries in Asia and Latin America, private flows
had largely replaced aid flows, rising from 26 per cent in 1987-92 to 55 per cent in 19937. However, less developed countries in sub-Saharan Africa did not witness a rise in
private flows as aid was provided” (Moyo). Usually, the percentage of private flows in
developing countries signifies its ability to be independent and self-sustainable.
Surprisingly, this evidence demonstrates that aid may have negative effects towards a
country’s sustainability, and moreover, it has potential to bring harm to country’s
economies. Though foreign aid had been ineffective in the past five decades in Africa, it
could remain as a feasible solution to burgeoning economies as shown in the success in
the Marshall Plan. The Marshall Plan was intended to resuscitate the war-torn European
countries after World War II. It foresaw significant increases in the economies, most
notably Germany, which had a 12% growth in GDP (“The Marshall Plan…”). As shown
in the Marshall Plan, foreign aid can be helpful. For that to occur, the current
business model of foreign aid needs to be significantly modified. This will be further
addressed in the solutions section.
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As shown previously, foreign aid has been greatly inefficient. One root cause of
this situation is the rampant corruption in African governments, which significantly
impedes the efficiency of foreign aid. African governments are frequently misusing
money provided by developed countries. “Many governments steal the foreign aid money
that the US sends to help the poor. Food aid, too, is frequently stolen” (“Introduction to
…”). Many times, foreign aid is not used for the purposes intended. Governments
stealing aid is obviously a serious issue, but it is hard to prevent. Furthermore, corruption
in African governments is ubiquitous and significant. A study about the African Union
estimated that $150 billion was wasted due to corruption every year (Hanson). All over
Africa, foreign aid is embezzled, and the prevalence of corruption causes it to be a more
detrimental obstacle to effective foreign aid. Lastly, corruption impedes aid, but aid also
aggravates corruption. “Jeffrey Winters, a professor at Northwestern University, argued
that the World Bank had participated in the corruption of roughly $100 billion of its loan
funds intended for development” (“Why Foreign Aid…”). Providing foreign aid is
placing African countries in a cycle of regression: more aid, more corruption, more aid
misused, and more aid coming in since the previous amount was insufficient. Foreign aid
exacerbates corruption. Ironically, many organizations including the UN are still
requesting and advocating for more aid. Not only is the foreign aid sent to African
countries embezzled by governments, but it also cripples the economies of LEDCs to
some extents.
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Democratic governments in Africa also lower the efficiency of aid and their
economic growth as a whole. Due to impact of the west, many African governments
adopted democracies. Democracies are proven to be successful in developed countries
like the United States, United Kingdoms, and Germany. However, there is evidence that
it hinders growth when adopted in LEDCs. For example, democratic governments are
often bureaucratic. “Champion [chairman of Chase Manhattan Bank] charged: ‘Quite
often enterprise and investment within these countries is frustrated or misdirected by a
maze of government controls, inflation, or even low standards of civic rectitude.’”
(“Introduction to...”). Referring to African governments, mazes of government controls
are traits of bureaucracies, which are infamous for achieving nothing. LEDCs have or
should have a main objective of growth. What can be achieved if they have bureaucratic
governments? Another reason why democracies are not as productive is that it lacks
unity. Too much politics are in play in LEDCs. “Democracy can hamper development as
democratic regimes find it difficult to push through economically beneficial legislation
amid rival parties and jockeying interests” (Moyo). Democracy works well in more
developed countries as they have a more stable and stronger economy in comparison to
LEDCs. As said previously, during this time of development, LEDCs should have a main
target of growth instead fairness or stability, which are the benefits of having more
parties and democracies. However, once LEDCs become stronger, fairness and stability
are all significant to a country’s welfare. Having that said, countries should (at least for
the developing period) adopt government systems like socialism or dictatorships
involving benevolent and effective dictators, e.g. Deng Xiao Ping. China is an example of
a dictatorship that can effectively issue laws and make decisions without having to
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compete with people inside the country. Democracy is a brilliant invention of mankind.
However, for developing countries, it is a matter of timing. Currently, it matters little to a
starving African family whether they can vote or not. Later they may care, but first of all,
they need subsistence. That requires an economy that is growing, which is not present.
(Moyo). During the Cold War, the west had encouraged African nations to adopt
democracies. In reality (and also from the perspective of Western countries), the
advocation for democracies did not intend to result in growth. At this moment, the most
appropriate government for LEDCs are not democracies, but governments such as
socialism or dictatorships that promote and increase growth.
Lastly, the root of the issue of aid inefficiency is that African nations are
contingent on aid in the long term. First of all, foreign aid constitutes a large percentage
of the incomes of many poor African countries. “Aid has been the main source of income
in countries such as Tanzania, which received $2.9 billion in aid” (“African Begins…”).
Various African countries are run by aid. Basically, developed countries are stepping in
and taking over parts of the Third World. Secondly, African governments take aid for
granted. The majority of African governments (except Rwanda and a few others) “remain
stuck in a culture of dependence or indifference. Through all of this, the development
challenge was always on somebody else's shoulders and governments have been eager
receivers” (“Foreign aid…”). African countries simply cannot rely on more
developed Western countries to propel them forward. This burden has to be on their
shoulders. Why should Western countries take responsibility for the development of other
countries? Even if they do, they would achieve little. Thirdly, relying on aid alone as
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means to achieve sustainability in LEDCs is not possible. Aid singlehandedly cannot
achieve much, but when it is in synergy with strong governmental and public policies
(which African LEDCs lack), it can be very effective, as shown in the Marshall Plan. In
countries possessing these traits consisting of India, Indonesia, and China, aid has made a
great difference (“Foreign aid…”). Foreign aid, which had been abundant to
African Nations, was shown to be ineffective. Therefore, it can be concluded that African
countries are missing important elements for their foreign aid to be as effective as aid was
in the Marshall Plan. A conclusion that Africa is relying on aid can be made. “Africa is
addicted to aid. For the past sixty years it has been fed aid, …finding it hard, if not
impossible, to contemplate existence in an aid-less world. In Africa, the West has found
its perfect client to deal to” (Moyo). African countries are reluctant to admit that aid is
being detrimental to their economy, and many are still willing to sacrifice more of their
economies.
A bilateral solution to, on one hand, save the monies of developed countries and
on the other, strengthen the economies of LEDCs is to cut foreign aid to the extent where
aid is only facilitation instead of the main impetus in achieving sustainability in Africa.
This can allow LEDCs to have independence, which is paramount to sustainability,
connecting back to the concept of giving fish and teaching how to fish.
Africans themselves should promote and search for ways to have better lives, and in this
way, self-sustainability will replace dependence. “A Kenyan businessmen found ways to
make money without much foreign help. It is important for Africans themselves to take
initiative to prevent dependence” (“Foreign aid …”). African corporations and citizens
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have the ability to achieve sustainability as shown by the Kenyan businessmen, except
currently, there are few African private companies in comparison to foreign institutions
taking over Africa homeland. Dambisa Moyo demonstrates how native African
organizations are losing to foreign institutions. A mosquito net maker in Africa who
manufactures around 500 nets a week. He employs ten people, but they cannot produce
enough to defend the mosquitos carrying malaria. Western governments collect and send
100,000 mosquito nets to the region costing millions of dollars. “The nets arrive, the nets
are distributed, and a 'good' deed is done. With the market flooded with foreign nets,
however, our [the African] mosquito net maker is promptly put out of business”(Moyo
44). As shown, foreign aid destroys the existing system and economy, replacing it with
foreign investments that only work for the short term. The mosquito maker and his
workers most probably lose their jobs. Likewise, many African institutions are out of
business because of foreign “assistance”. Instead foreign aid should enhance and build
from the existing infrastructure instead. Often times, however, foreign aid erodes the
independence of African Nations. 70% or more of the GDPs of many African countries
come from aid. Preventing dependency in the Third World is of paramount importance.
Hence, achieving this goal would be improving economies of African countries in the
long-term.
In some African countries, aid can work well in various sectors, for example the
health sector. This solution intends for aid to be still provided to the areas in which it
succeeds. In the sectors that do not succeed when provided aid in the long term,
alternative ways need to be found.
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For the proposed solution above to be feasible, many conditions are required. One
important condition for this solution to work is that government usage of aid should be
carefully scrutinized. Sponsoring aid to private institutions instead of governmental
institutions should be encouraged. African governments are required to increase higher
governmental transparency in order for foreign aid donors like the World Trade
Organization to find the most suitable amount of aid for each country to be economically
successful. Secondly, nations providing aid need to ensure that their purpose of
sponsoring aid is solely for the benefit of African nations. In history, western powers had
contributed foreign aid for increasing their own political influence (e.g. Cold War) and
increasing economic gains (South Africa under the rule of Nelson Mandela is a great
example where western powers took control of many of the facilities and operations in
the country). As stated in the introduction, the ability to fish is more important than
receiving fish. While flooded fish and short-term resources, African nations’
independence diminishes.
In conclusion, foreign aid has not resulted in stagnation and regression in many
countries, and its inefficiency is demonstrated by its lack of progress. However, there is
still some notable success of foreign aid, e.g. in the health and emergency sector. “The
United Nations Development Programme estimates that for every £1 invested in water
and sanitation, £8 is returned to the economy through increased productivity”(Sirleaf).
Foreign aid has achieved many successes, however, in few areas. The majority of foreign
aid is still wasted or inefficiently used. Many people believe that aid is necessary for
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humanitarian purposes. “The argument that a nation with an annual GDP of $14.6tn
[America] cannot afford to invest a fraction of 1% of that to help build a safer and more
prosperous world is irresponsible” (Worthington). However, people do not realize that
this 1% does more harm than good to African countries, as it dramatically diminishes
African countries’ self-sustainability. Reversely, lessening aid can bring more benefits to
African economies. As a Millennium Development Goal for 2030, the UN strives to
encourage developed countries to increase the amount of official development assistance
(foreign aid) to 0.7% of their GNI (Gross National Income). This purpose of this goal is
to strengthen the economies and solve the problems of LEDCs. However, before
executing this goal, member states should first determine if this goal could fulfills its
purpose. As shown through evidence, foreign aid brings little effect and sometimes harm
to Third World countries. Member states should not make the same mistakes they made
in the past. Alternative ways to assist LEDCs need to be found. Paul Kagame, once said,
“I wish I could achieve self-reliance for Rwanda.” Reliance is what all benevolent leaders
in LEDCs aim for, but foreign aid is simply preventing it.
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Works Cited
Dambiosa, Moyo. "Why Foreign Aid is Hurting Africa." Wall Street Journal 21 March
2009: n. pag. Print.
Eberstadt, Nicholas, and Carol C. Adelman. "Foreign Aid Should Focus on Strengthening
Local Institutions."
Foreign Aid Should Focus on Strengthening Local Institutions: n. pag. Opposing
Viewpoints in Context. Web. 15 Nov. 2015.
"Foreign Aid Is Wasted on Africa." Foreign Aid Is Wasted on Africa 2013, Final ed.: n.
pag. Opposing Viewpoints in Context. Web. 15 Nov. 2015.
Haugen, Ed. David, and Susan Musse. "Introduction to Is Foreign Aid Necessary?: At
Issue." Introduction to Is Foreign Aid Necessary?: At Issue 2013, Final ed.: n.
pag. Opposing Viewpoints in Context. Web. 16 Nov. 2015.
"History of the Marshall Plan." The George. C Marshall Foundation. The George. C
Marshall Foundation, n.d. Web. 24 Nov. 2015.
Is Inequality Decreasing? : Debating the Wealth and Poverty of Nations. 2002 ed. N.p.:
Foreign Affairs, 2002. Opposing Viewpoints in Context. Web. 11 Nov. 2015.
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Moyo, Dambisa. DEAD AID - WHY AID IS NOT WORKING AND HOW THERE
IS A BETTER WAY FOR AFRICA. New York City: Farrar, Straus and Giroux,
n.d. Print.
"African Democracy Update - Satisfaction Remains Elusive for Many [analysis]." Africa
News Service 20 Sept. 2015. Opposing Viewpoints in Context. Web. 2 Dec. 2015.
Wang, Sussana. A COMPARATIVE ANALYSIS OF FOREIGN AID
EFFECTIVENESS IN AFRICA AND ASIA. N.p.: n.p., n.d. Remar UK. Web. 6
Dec. 2015.
Gathigah, Miriam. "Africa Begins to Rise above Aid." Guardian 19 Jan. 2012: n.
pag. Guardian. Web. 6 Dec. 2015.