Thursday, February 16, 2006

Aid Works

7/6/05
Aid? Waste of money. Most of it goes straight into the pockets of African dicators, or to buy arms. You might as well hand it over to the Swiss banks direct. Africans don’t know how to use aid; handouts create dependency; why should we help Africa if Africa won’t help itself?
Such has been the drift of public opinion in the week or so since “Sir” Bob Geldoff announced his poverty party. As a publicity exercise, Live 8 seems to have been spectacularly counterproductive. It's been a tipping point. Suddenly, it's alight to condemn not just charity concerts and million man marches, but the whole project of mobilising western financial resources to help Africa emerge from its dark ages.
According to an opinion poll in the Daily Telegraph, eight in ten of us think aid to Africa is mostly wasted. It’s hardly surprising that George W. Bush sent Tony Blair back from Washington empty-handed, rejecting Gordon Brown's International Finance Facility and debt relief targets. The UK press seems to agree with Bush.
Even the Guardian, house journal of bleeding-heart liberalism, ran a commentary yesterday by its chief leader writer, Martin Kettles, attacking the Make Poverty History campaign. Too much of it, he says: “reeks of middle class Europeans trying to feel good about themselves by prescribing very radical but practically dubious solutions to Africa’s problems”. Well, there’s an element of truth in that, of course. It is an exercise in conscience alleviation and, perhaps, moral self-gratification.
But hang on. Would not having a conscience be any better? Is it preferable to languish in immoral gratification? Is doing nothing really an option? Do the flint-hearted realists who have
colonised the aid debate have any better ideas?
The arguments against aid are not new. They have been around at least since the days of the Irish Potato Famine, when British politicians argued in very similar terms against helping the starving millions in what was then part of Great Britain. It would just be wasted, said the opinion formers of the day. Hand outs would distort the market, encourage idleness. The Irish are corrupt and lazy, not responsible enough to manage aid. And anyway, it’s their own fault.
This is what used to be called laissez faire - the theory that if left to its own devices, market mechanisms will solve social problems. This is fast becoming the accepted wisdom on development aid. Which is unfortunate because it is totally discredited. Look at Russia, a test-bed for laissez-faire, which plunged into a spiral of de-industrialisation and falling life expectancy.
Of course, it’s true that much development aid money has gone astray in the past. But a lot more of it was syphoned to British arms manufacturers and oil and mineral companies than ever found its way into the bank-accounts of the local elites. A lot of aid was - is - tied to the commercial interests of the donor country.
Remember the Pergau dam? A pointless civil engineering project in Malaysia in the 90’s financed by aid money paid to a British companies and tied to a one billion pound arms deal. A lot of American health aid benefits US pharmaceutical companies because it can only be spent on their expensive branded drugs. £20 bn of aid never gets to the starving because it somehow gets spent on “consultants” in the West.
Of course, that’s no excuse for the corruption that is endemic in many African states. Aid is only beneficial when it is earmarked for specific goals like free primary education, lowering infant mortality, providing clean water. But that is exactly where it is going under the debt-relief plan promoted by Gordon Brown.
Of course, aid has to be monitored. It must be transparent, conditional on good government, properly accounted for. But this is precisely what the Commission for Africa has demanded. Call me naive, but it looks like the best chance for Africa in half a century.
Gordon Brown isn’t exactly renowned for throwing his, or rather our money around. He is a control freak who has made a fetish out of financial prudence. Brown is also widely regarded as Britain’s best chancellor in over a century and is one of the few finance ministers who is truly respected across the world. Uniquely, he has the ability to bridge the gap between the free market evangelists of the World Bank and the charity workers in the field.
Frankly, if Brown thinks this is a good plan, then I’m not going to argue with him. If he tells me - and he has - that he is satisfied this money will not find its way into the sales figures of arms manufacturers or Merecedes Benz, I am inclined to give him the benefit of the doubt. If Brown thinks that the eradication of poverty is possible within a generation and at a cost of only 0.7% of GDP, then I think that’s a pretty good deal.
Debt relief isn’t a sufficient condition for African development, but it is a necessary one. Nothing meaningful can be done while countires like Malawi - where the average life expectancy has fallen from 42 to 37 in the last five years alone - spend more on debt interest than their entire health budget. That isn't realism - it is obscene.
Aid works. Next time you are told it is a waste of money, tell them about Uganda. Thanks to aid and debt relief the number of primary school places there has increased from 3 million to 8 million in six years. Africans who have completed primary education are half as likely to get AIDs as those who don’t. They are three times more likely to get a job and five times more likely to raise a healthy family. Result: Uganda is on the road to recovery. It’s not that expensive either. For the cost of a couple of stealth bombers, you could provide free primary education for the whole of Africa.
And a final thought on liberal guilt. A lot of the new realists say that the West should stop thinking we are to blame for Africa. All that ‘legacy of colonialism’ stuff is , they say, merely an excuse used by African dictators to justify their tyranny.
Well it’s true that we aren’t to blame for Robert Mugabe. But we do still share responsibility for what happened since we gave up colonising the continent half a century ago. We created the failed states. Western companies helped corrupt the African elites by their “commission” payments. We extracted their raw mateirals, and then locked Africa out of our western markets by erecting trade barriers against their goods. Many of the wars are our wars, begun during the Cold War, when the West fought through proxies in Angola, Mozambique, Zaire.
It is very convenient to blame Africa’s plight on Africans, and to sneer at woolly-minded idealists and pop plutocrats. It gets us off the hook. But it is bad history, bad economics and it is morally repugnant. What could be worse than turning our backs on the continent at the very moment it appears to be turning the corner?

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