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July 05, 2005

The problems of aid

Via Betsy's Page, I found this piece from the Daily Mail making fun of the Live8 celebrities. A sample:

Like a royal visitor, Sir Paul went to see all the stars in their dressing rooms. But the uneasiness between his designer daughter STELLA and his wife was obvious to all, particularly when Stella walked off the side of the stage during the performance by her best pal MADONNA after Heather and Sir Paul came to stand next to her.
.      .      .

BRAD PITT, on stage for all of two minutes, was furious that he did not have his own dressing room and RICHARD CURTIS, the director who heads the Make Poverty History campaign, had to vacate his for the actor.

On the one hand, I enjoy this as much as everyone else (okay, probably more). On the other hand, it seems an easy way to sidestep deadly serious questions. There is much misery in Africa. I will not forget the missionary who told me about a little three year old girl he encountered there. Her parents were dead from AIDS, and she had been abandoned. They found her blind: she had sat on an anthill, and the ants had swarmed over her, eating her eyes. Norm Geras makes the point plain, when he picks some adjectives to describe Africa:
'hungry' or 'suffering' or 'demanding attention and action'
The issue is not whether Africa should be helped. The question is how.

Geras points admiringly to a piece by Pam Bone in the Austrialian paper The Age.

We are at a point in history where the world has enough material resources to feed, clothe, shelter and educate every person in it. Yet while we in the West are obsessed by diets and are everywhere surrounded by symbols of extravagant wealth (the other day I saw a "lifestyle" shop for pets), every year nearly 11 million children under the age of five die of extreme poverty. Most of them are in Africa. Right now 4 million people are at risk of starvation in Mali, Niger and Mauritania as a result of drought and a locust plague. Oxfam reports already greatly increased rates of child malnutrition.

Surely such inequality can't be tolerated, is unjust, unsustainable, dangerous? Surely this is the most pressing problem facing the world today?

I can't quarrel with that. But here is where she is decidedly wrong.
I remember a woman I met in Malawi who looked very old but might have been no older than me. She was looking after eight or 10 orphaned grandchildren and her only thought from morning to night, she said, was to get enough food to get them through another day. She was up at dawn cutting grass to sell as thatch, except no one around had any money to buy it. When there was no food she tried to get the children to sleep a lot. I wonder if she is still alive, and how many of those children are still alive.

On the ground, all the arguments about corruption and wasted aid, whether debt forgiveness rewards bad governance, whether trade or aid is the way to go, are irrelevant. There are only those children, in their pitifully torn and ragged clothing, swollen-bellied, coughing, listless.

Pointing out that there is suffering does not make irrelevant the questions about how to fix the problem. It makes them all the more relevant. Zimbabwe is on the edge of famine. Does Bone or Geras believe that giving food aid to Mugabe, on the hope that he will distribute it to the hungry, is okay, because there are hungry children? (The answer to that, by the way, is no.) Clearly, Mugabe would not give it to hungry children. He would give it to his army, propping them up and making the misery in Zimbabwe even worse.

Mark Steyn, while making fun of the people who deserve to be mocked (and he is very good at it), at least gets at some of the real problems with aid.

Africa is a hard place to help. I had a letter from a reader the other day who works with a small Canadian charity in West Africa. They bought a 14-year-old SUV for 1,500 Canadian dollars to ferry food and supplies to the school they run in a rural village. Customs officials are demanding a payment of $8,000 before they'll release it.

There are thousands of incidents like that all over Africa every day of the week. Yet, throughout the weekend's events, Dave Gilmour and Co were too busy Rocking Against Bush to spare a few moments to Boogie Against Bureaucracy or Caterwaul Against Corruption or Ululate Against Usurpation. Instead, Madonna urged the people to "start a revolution". Like Africa hasn't had enough of those these past 40 years?

There is more here than just the petty corruption eating into the aid. We know that there are crooked cops, but we don't necessarily view that as a reason to give up on policing. The corrupt customs officials in Steyn's story are not merely stealing money from the poor. They make it more attractive to be in the customs game, where money is made primarily from stealing, rather than in productive activities.

Sebastian Mallaby points out some of the problems.

Aid projects may do good, but they have unseen side effects that hurt. The development folk need to absorb this message.

What are these unseen effects? As aid flows in, it pushes up a country's exchange rate and damages its exporters. Aid projects that hire local workers are bidding up skilled wages, again damaging the export firms that hire from the same labor pool. So an AIDS project or water project may deliver wonderful and visible results while also choking off the export growth that represents the surest route to development. Hence the fact that many statistical tests don't find that aid helps reduce poverty.

It follows that you have to care a lot about whether aid is spent well. A failed aid project is not merely neutral for poverty reduction; it exacerbates the problem. Inconsistent donors who finance the construction of six hospitals but then don't follow up with the resources to make any of them function saddle poor countries with the worst of both worlds: bad health and bad growth rates.

It is very important to know what works and what does not. (Mallaby points to a paper "What undermines aid's impact on growth," by Raghuram G. Rajan and Arvind Subramanian of the IMF that deserves a look.) I appreciate that there are very hungry people in Africa, and that the quest for further research should not be an excuse for delay. But as with my Mugabe example, and as with Mallaby's examples, rushing in may make things worse.

Posted by sjostrom on July 05, 2005 09:01 AM




Comments:

What about Darfur -- starvation due to gov't genocide?
Africa needs regimes to change; in Sudan, Zimbabwe, Congo -- radically.

Aid without rule of law is, like you said, not neutral -- it strengthens the killers.

The Aid folk should be starting businesses and hiring folk: chicken raising, dairies, rag textitles.

Geldof's been on this for 20 years -- how many jobs has he created?

Posted by: Tom Grey - Liberty Dad on July 17, 2005 09:07 PM [Permalink]






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