Moyo’s theories misguided

OPINION – Dambisa Moyo is a young Zambian economist whose runaway bestselling book, Dead Aid — Why Aid is not Working and How there is a Better Way for Africa, has taken the world by storm.

In a nutshell, she blames all of Africa’s woes on Western aid, calls for its elimination, and then concludes — not surprising for a woman who works for Goldman-Sachs, one of the world’s richest investment banks that caters to the super-rich but recently had to be bailed out by U.S. taxpayers — that the free market has all the answers for Africa.

The free market CATO Institute loves it. So does former president of the World Bank, Paul Wolfowitz, who claimed he would fight corruption in Africa and then had to resign because he offered a privileged World Bank position and salary to his own girlfriend. Billionaire publisher of Forbes magazine, Steve Forbes, threw Moyo a giant party. Time has declared her one of the 100 most influential people in the world. Why all the fans in high places? Perhaps because she says exactly what they want to hear?

On the positive side, Moyo concedes that "aid" — into which she lumps all bilateral grants or loans from individual nations and multilateral funds from institutions such as the World Bank and International Monetary Fund (IMF) — has been a powerful tool used by these so-called "donors" to create "client" states in Africa and maintain control of resources and spheres of influence.

She shows how aid was dispensed during the Cold War to prop up dictators such as Zaire’s Mobutu Sese Seko (once a darling of the Bush family), incurring massive debts that crippled the continent. She rightly uses the example of the international campaign to combat malaria, championed by movie stars and celebrities to promote (imported) bed nets for all, to show how such good intentions can harm local industry by putting African net-makers out of work. And she makes a strong case for more micro-credit in Africa.

But that is where even faint praise ends for this overly simplistic and poorly argued book that is getting far more attention than it deserves. Moyo cherry-picks her sources, ignoring literature that doesn’t fit with her free market mindset. She doesn’t mention countless studies that show how the scramble for Africa’s natural resources — the free market at work — has spawned conflicts and fuelled corruption all over the continent.

She rightly points out that China is extremely active in Africa, hobnobbing with the likes of Zimbabwe’s Robert Mugabe and Sudan’s Omar al-Bashir to get at natural resources in exchange for infrastructure, and that the West (which also hobnobs with unsavoury regimes to get at natural resources) should ignore this only at its own peril. Then she glibly adds this puzzling zinger: "Whether or not Chinese domination is in the interest of the average African today is irrelevant."

Too often in this book, Moyo holds out the stick and then grabs the wrong end. After saying that "aid costs money," incurring debt that profits only the foreign lenders, she turns around and suggests that it is the liberal, guilt-ridden do-gooders in the West who are hurting Africa by giving it "something for nothing."

Her narrow and blinkered economic treatise does not mention environmentally sustainable development and this at a time when climate change, which Africans are not causing, is hitting them hard. She doesn’t consider the awful consequences had people like Stephen Lewis not championed aid and taken on the free market pharmaceutical industry to fight the HIV/AIDS pandemic in Africa.

If Moyo really wants to see life improved on her continent, and this impassioned book suggests she does, she might set aside for a moment her free market dogma, which she seems not to notice has been imposed on Africa for three decades by the World Bank and IMF and resulted in much of the growing poverty she blames on aid. She might instead call for an overhaul of those institutions and of the World Trade Organization, which create an extremely uneven playing field for weak African states. She might call for a closing of all those tax havens and numbered bank accounts where corrupt leaders and other tax-evading super-rich stash their wealth. The murky international financial architecture is a far bigger problem for Africa than is aid.

Her arguments should have led her to call for aid to be more transparent and less self-serving to enable Africa to educate, govern and develop itself without more plundering of its resources, social and environmental upheaval, and foreign domination. Unfortunately, she decides that aid is bad and should be stopped. End of story.

Not only does she want to throw the baby out with the bathwater, but Moyo would have us throw out the tub itself, destroy the whole house, and take out a mortgage on the ruins.

Joan Baxter is a Nova Scotian journalist and award-winning author, who has lived and worked for 25 years in Africa. Her latest book, Dust From Our Eyes — An Unblinkered Look at Africa, has just been shortlisted for the 2009 Dayton Literary Peace Prize.