G8 - why donate?

Not sure the pressure to allocate government resources should be coming from Bono. I'd have more respect for him if he humbly wrote a cheque (which wouldn't affect his standard of living one bit) and didn't grandstand. Didn't Michael Schumacher give $10M to the tsuami relief with little fanfair? Very impressed by that gesture! Not quite so impressed with giving a benefit concert which, although raises cash, really doesn't cost the performer anything. In fact, it helps promote him or her. Likely sells more records. Certainly 'raises awareness' and raises money too, but i'd be so much more impressed if the super wealthy (which these guys are) would anti up a substantial donation from their pockets too. But its better than nothing.

Getting governments out of the foreign aid game though, is a scary thought. Theoritically you could make a case for it if you truly believed a goverment's role was providing essential services and nothing else. But the need is too great. Seriously....are there many government programs that are more important than getting people clean water, treating disease and fending off starvation? The amounts given as aid are relatively small compared to governments total budget. So do we give individually, or collectively as government? I think both. It's just too important to do otherwise.

 

i hear ya, bnb....but creating awareness is a good thing. unfortunately, many times it takes a celebrity to get a segment of the population to listen.

 

I may have come across as (even) more cynical than usual .

It's very good what they do! Sometimes, they can appear to be a little self-absorbed. And i do wish they'd dip into their own war chests too when soliciting donations from those who have substantially less than they have...But overall...these things are great! It's just too easy to criticize, I suppose.

Curious on your take about foreign aid, Max. You tend to favour smaller government (I think), yet have spoken out very strongly about helping the less fortunate. Does this extend beyond your nation's borders, where the need is greatest? Or should it be up to individuals? Clean up our own mess first....or address global problems too?

 

here's a response you'll find odd, most likely:

i fight through my own idolatry of small government and the Constitution, itself. the right thing to do is to help people. you can't do everything...but you do as much as you can.

 

Are wealthy countries hurting Africa with increased aid?

Clarence Page

Published July 6, 2005


WASHINGTON -- Who could find anything negative to say about a movement that brings together stars as diverse as President Bush, British Prime Minister Tony Blair, Brad Pitt and Madonna? Well, there's always Libyan President Moammar Gadhafi.

Madonna, Coldplay, Elton John, Mariah Carey and other superstars performed at Bob Geldof's globally televised Live 8 concert over the weekend to urge the world's wealthiest nations meeting this week at the G-8 summit, hosted by Blair in Gleneagles, Scotland, to double their financial aid to Africa.

At the same time, Gadhafi, hosting a semiannual meeting of the 53-member African Union in Libya, was urging African leaders to come together, solve their own problems and stop "begging" for outside aid.

Although few African leaders were willing to openly join Gadhafi's long-standing opposition to Western involvement of any kind in the continent, his comments express an extreme answer to a question many are now asking: At a time when the wealthy nations are remarkably united in their desire to help Africa, what's the best way to do it?

Most African leaders are quite willing to embrace Blair's aid proposals, at least in public, but not without some reservations. Well-intentioned as it is, the current push for the wealthy nations to "Make Poverty History," as one campaign calls itself, strikes many African ears as echoing the condescending missionaries and explorers who came from Europe in past centuries to "save" Africans from themselves.

As one Nigerian analyst at the meeting in Libya told the Reuters news service, "Africa's image is that of a child. We are infantilized by this campaign."

Yet, much of Africa has desperate needs. More than 40 percent of Africans live on less than $1 a day; AIDS kills more than 2 million Africans a year. Many others are killed by malaria or wars (there have been some 186 coups d'etat and 26 major conflicts since imperial pullouts a half-century ago).

Some African governments, such as Mozambique and Ghana, are making impressive economic and political progress, while Zimbabwe and other kleptocracies continue to behave like the proverbial brother-in-law on the couch: You keep waiting for him to get a job, straighten up and get his act together, but he never does.

Blair and other anti-poverty campaigners are pushing for doubling of aid to Africa, to $25 billion by 2010, a plea that is backed by major reports from the UN Millennium Project and Blair's own Commission for Africa.

President Bush has rejected Blair's target, but offered to double America's Africa aid to $8.6 billion by 2010, which is more than any previous administration has committed.

But more important than the aid earmarked to meet Africa's short-term needs is the approach the developed world should take in helping Africa grow in the long term.

For example, in April when I visited Dakar, Senegal, the bustling West African port city whose Hong Kong-like financial district surprised me with its gleaming high-rise glory, I found a rising generation of educated and enterprising Africans in suits and polished wingtips who wanted trade, not aid, especially if they could get it under fair international rules and cleaner African governments.

And this new generation is not alone in looking at how market capitalism, entrepreneurship and education reforms have improved the fortunes of countries such as China since the late 1970s, India since the early 1980s and Vietnam since the late 1980s.

"All of these were home-grown policy reforms, which allowed countries to get richer by making money, not by receiving it," an editorial in Britain's The Economist magazine rhapsodized on the eve of the G-8 talks.

China, India and Vietnam now trade with the U.S., providing cheaper goods and services and, it must be said, ominously competing with American workers for U.S. jobs that can be outsourced.

Such is the magic of the marketplace. It has its winners, its losers and those who can't seem to get into the game. That last category, unfortunately, is where too much of Africa continues to languish.

Thus, a new debate is emerging and it's not about whether to provide foreign aid to fight global poverty but what kind of aid is best.

In many ways, the squabble resembles America's welfare-reform debate; some critics say conventional foreign economic aid actually hurts those it is intended to help, if it does any good at all.

As The Economist concluded in its editorial, more aid may not "make poverty history," but it will do some good, at least in the short-term.

In the long-term, however, the best partnership between developed and underdeveloped nations will benefit best by following an old fish proverb: Give someone a fish and you feed him for a day; teach him to fish and you will feed him for a lifetime.

 

I'm a very strong supporter of foreign aid, Max. My Dad used to spend his Summer "time off" from being a university chair working through USAID to teach profs in underdeveloped countries the latest technologies and teaching techniques... the latest lab equipment, some of which he had developed himself. Countries like India (in Bangalore, among other cities), Pakistan, Bangledesh, Nigeria, and Algeria. He loved it. I don't think we do enough of that sort of thing. Too much of our aid is to the militaries of governments that are frequently corrupt and/or dictatorships of one stripe or another.

These concerts do help raise public awareness of the problems. Willie Nelson does Farm Aid here in our own country, and it helps. Ultimately, it is governments, elected by their people, who are tasked with doing (or not doing) what is necessary to bring up the rest of the world to the standard of living enjoyed by the developed nations. If we don't do what we can, it will come back to bite us, in my opinion.

India is a good example of what foreign aid, foreign investment, education, and hard work by their own people can do. Africa, if it can ever cast off it's terrible governments, could do worse than look at how India is making it's way onto the world stage as a developing country.


Keep D&D Civil!!

 

In addition to the whole idea of moral responsibility, the theory behind this type of support is that helping Africa now prevents problems that our government WOULD have to fight later. For example, if we had spent money supporting Afghanistan in the 90's, perhaps Al Queda wouldn't have taken up residence there, etc, etc.

Whether the theory is correct or not is impossible to determine, but that's generally the idea. Basically, the same theory behind preventative health care. It's much cheaper to solve the problem now before it comes a bigger problem that must be solved much more expensively.

 

I believe education is the biggest thing we can give to the African populace besides food. We especially need to educate the women of Africa. Educated women have less children, less children means more food and less poverty in general.

Bono is just trying to use his fame to do good. Bono is a diehard Catholic and even once considered giving up being in a rock band because the whole rock lifestyle went against his beliefs.

 

[The following is copied from a blog I read a month ago. I couldn't agree more.]

It's not African Aid, it's reparations

As anyone paying attention to the news knows, the leaders of industrialized countries are meeting and discussing the topic of "foreign aid" and "debt relief" to Africa.

We can never have an accurate discussion of the economic situation in Africa until Western societies openly acknowledge and own up to the massive exploitation that they have historically imposed on Africa. Indeed, literally trillions of dollars worth of wealth has been stolen from Africa by Western nations, mostly the Europeans, but America as well to a lesser degree.

All of Africa, of course, was colonized by the Europeans during the 18th and 19th century. During this time vast amounts of wealth were shipped out of the continent wholesale, without any compensation to the inhabitants whatsoever. This wealth is a significant part of the base of the wealth of today's industrialized nations. Without it these nations would all be poorer today. To call the action of "giving money" to Africa "aid" is a complete misnomer, in fact this is really an act of paying back to the continent what it is rightfully owed.

Africans should be charging interest to the Western Nations on the value of the wealth taken from the continent without compensation, indeed it is the West that is in debt to Africa in reality, not the other way around.

If we want to get some idea of the amount of wealth taken from Africa, and the debt that the West has to this continent, then we can first look to the value of the African slaves themselves. African slaves were used throughout the Americas, in the Caribbean, South America and North America, to produce literally trillions of dollars worth of wealth, 100% of which went into the coffers of established Western Society, and formed the base of the entire economic revolution of the West during the 17th through the 19th century. Let's get just a small taste of the size of this "value".

Statements from American slave holders give some idea of the value of the human capital that was taken from Africa:

The Declaration of Secession of Georgia states:

But they know the value of parchment rights in treacherous hands, and therefore they refuse to commit their own to the rulers whom the North offers us. Why? Because by their declared principles and policy they have outlawed $3,000,000,000 of our property in the common territories of the Union; put it under the ban of the Republic in the States where it exists and out of the protection of Federal law everywhere...


The Declaration of Secession of Mississippi states:

We must either submit to degradation, and to the loss of property worth four billions of money, or we must secede from the Union framed by our fathers, to secure this as well as every other species of property.


These two cases alone report an amount of $7 billion in 1860 dollars. Adjusted for inflation this would amount hundreds of billions of dollars, and this is just the tip of the iceberg. That doesn't count the "value" of any of the slaves held in the rest of the states, in the Caribbean, or in South America. It also doesn't even begin to count the material wealth taken from Africa, and continuing to be taken from Africa, in the form of gold, diamonds, timber, wildlife, minerals and more.

A real accounting of the degree to which Western economies have benefited from the exploitation of Africa has still never been done to my knowledge, but surely by any accounting literally trillions of dollars worth of resources have been taken from Africa without compensation.

Therefore, to act as though Western nations are being asked to simply "give" Africa something for nothing, i.e. charity, is a far cry from the truth.

Now let's discuss the topic of debt relief for African nations. Anyone with any knowledge of how the economic world really work would know that it is completely legitimate to erase 100% of African debt without any strings attached.

Here is how the majority of the African countries have gotten into debt:

Western companies found valuable resources in Africa that they wanted to acquire and bring to market for as little money as possible. Due to the under developed infrastructure of Africa, bringing these resources to market would actually be quite expensive because, left to the "free market" the company would have to build the infrastructure itself or raise private money to do so in order to extract the resources and bring them to the West.

So, companies and partners would lobby Western nations and talk to local chieftains. They would get support for a revolution or put some old half-prince into power in the country through the use of Western government aid. Once in power with the help of Western aid, the ruler, usually a warlord, was then advised by Western advisors to take our massive loans from governments, or from various private lenders at extremely high interests rates, in order to "build up the nation's infrastructure."

Well, the money was used to contract Western companies to design and implement the infrastructure. The infrastructure was built purely with the interest of extracting the resources as quickly as possible, often with a short term perspective, so the construction would be low quality, and the infrastructure would have little economic benefit to the country as it wouldn't be designed to really help the people.

The "investment in infrastructure" typically involved building a railroad from a port to a mineral mine or a timber forest, with no other use than to extract materials as directly as possible and get them on a ship bound for America or Europe.

In the end, the land was privatized and the African Natives were kicked off the land, the material wealth was taken out of the country with virtually no compensation, and the infrastructure served no valuable long term purpose and had no impact on helping to really develop the country. In reality it was all just a system to subsidize the actions of private corporations.

In the end, most of these high risk loans were transfered to the IMF or World Bank, who have acted as debt servicers.

Who pays the price? The African people, who had zero say in the process, had nothing to do with the debt, and got no benefit from it at all. In many of the cases this is exactly what has happened in Africa. A large number of the loans have been taken out by dictators over the past 50 years, almost all of which were operating in the interests of the Western powers.

This is really an entire paperwork scam run on an enormous international level, with the cooperation of governments and corporations, and now we act like we are doing the Africans favors by "forgiving their debt."

The reality is that this was never legitimate debt in the first place.

Where did all the money go? Into the hands of private investors and corporations that abused the system and manipulated warlords and villains into putting billions of dollars of debt onto the books of their nation at the expense of their own people.

Indeed corruption and incompetence has plagued Africa for the past 50 years, but much of this has been facilitated by the Western powers who have intentionally aided corrupt leaders to power precisely so that they could bribe them and use these schemes to load up the African books with billions of dollars of debt that serves as yet another means of international corporate welfare.

 

wnes, you're supposed to post the link, bro.



Keep D&D Civil!!

 

Well, I pre-announced the whole thing was copied from a blog. There is no direct link - it is buried among a bunch of other things which I think might digress from the purpose of this discussion. But if there are a few more folks insisting on providing the link, I'll be happy to do that.

 

We are forgiving debt and giving aid, so I'm not sure what point the article has about the present and future of Africa.

This seems just another diversion from the problem. By looking back and focusing on what happened in the past we completely ignore what we need to do in the PRESENT. By attacking the United States and the West you hope to silence legitimate criticism of what African governments are doing.

 

There is something called history certain people would often forget or ignore, especially when a particular piece hits their nerves. Of course these same people won't allow a history that is to their advantage to be neglected by the rest of the world.

What African governments are doing right now have no redeeming values to what the US and Western nations did to the native Africans in the past, no excuse whatsoever. Only by fully acknowledging the painful history (and learning from it) will the Western Society be able to help Africa get out of its current gloomy situation, which eventually is beneficial to the benefactors.

 

Yes, wnes, please post links. Most blogs have links to individual posts, look around the time/date stamp maybe.

 

Live8: a triumph for sentiment, not for results





By : Allister Heath

July 03, 2005




THERE was a time when young people who wanted to save the world would become doctors, scientists or teachers; move to Africa to devote their lives to helping the poor; or even study economics, human rights law or international relations. Now, it seems, they go to rock concerts. Its much less hassle.

Welcome to the brave new world of pop star economics, where sentiments matter more than results, emotion triumphs over reason and hedonistic Westerners can feel good about themselves in Londons Hyde Park, safe in the belief that they are doing their bit for starving African babies while listening to Madonna, U2, Pink Floyd and the rest. An estimated 200,000 people attended the main concert in Londons Hyde Park on Saturday afternoon, convened by Sir Bob Geldof, the former Boomtown Rat turned anti-poverty activist, in support of the Make Poverty History campaign which lobbies for more aid, fair trade and a foreign debt write-off. Billions more watched it on television. The organisers were hoping to set a new record for a global audience and while the concert will have zero impact on world poverty, it undeniably came close to living up to its billing as the Greatest Show on Earth, at least for those who like that kind of thing.

In Edinburgh, meanwhile, an altogether more motley crew marched in support of Prime Minister Tony Blair and Chancellor Gordon Browns crusade to double aid to Africa ahead of the G8 summit in Gleneagles starting on Wednesday, in a remarkable blurring of the distinction between protesters and establishment, entertainment and politics, and in the eyes of its critics between rule of the mob and democracy.

To his detractors, Geldof had this to say: I am withering in my scorn for the columnists who say Its not going to work. Even if it doesnt work, what do they propose? Every night forever watching people live on TV dying on our screens? Of course, the answer to his question is no, and he should know by now what his critics propose as an alternative to hand-outs and posturing.

Geldof is wrong to question the motives of those with whom he disagrees. What unites protesters, concert-goers and politicians on the one hand and their critics on the other is a passionate belief in tackling global poverty. Both camps agree that it is obscene and absurd that 30,000 children are dying daily as a result of extreme poverty and that malnutrition, Aids, conflict and illiteracy are a daily reality for millions, at a time when the world is going through an unprecedented economic boom. It is a scandalous blot on the record of mankind in the era of the iPod and space travel.

The disagreement between the two camps is about means, not ends. The real question is: why are some countries rich and others poor? To the Make Poverty History crowd, the answer to this question, by far the most important in economics and all of the social sciences, usually lies with Western exploitation, insufficient aid and the alleged ravages caused by free trade or greedy multinationals. This conveniently omits to explain how so many poor nations in Asia have got rich; and many economists in developing countries no longer agree. Even more so than most westerners, they desperately want to conquer poverty but years of bitter disappointment as billions of dollars of aid did nothing to stem Africas descent into squalor and chaos have forced many to think again. The result is a growing backlash against the new Gordon Brown-Tony Blair-Make Poverty History view that when it comes to Africa, foreign aid is the answer to all the questions.

Wearing a white wristband and calling for hand-outs or debt relief is not the answer, says a growing band of young and educated Africans. The money will merely be frittered away, diverted into the Swiss bank accounts of a corrupt ruling class and do little or nothing to bring about prosperity, they say. While still a minority view, these African pro-capitalist rebels are the voice of the future; one of the leading lights in this movement is June Arunga, a Kenyan law student currently based at the University of Buckingham in the UK. The African dissidents even held a well-attended conference in London last week, adding their voices to a growing chorus of Western analysts who argue that there is no robust statistical or economic evidence that aid boosts growth. Supporters of the Make Poverty History campaign should acquaint themselves with the work of a new generation of African activists, including Thompson Ayodele, of the Insti-

tute of Public Policy Analysis in Lagos in Nigeria; George Ayittey, a Ghanaian economist and author of a new book, Africa Unchained; Franklin Cudjoe, of the Imani think-tank, also in Ghana; Leon Louw, a South African lawyer; and many others. Ayodele is scathing: Poverty in Africa cannot be reduced through government-to-government financial transfers, which never trickle down. This kind of aid perpetuates poverty, promoting poor government policies and corruption, rather than real and lasting economic growth. Sadly, this will be the outcome of the current effort.

Geldof and all those marching in Edinburgh could start by reading a report out this weekend from the International Policy Network. Its author, Moeletsi Mbeki, happens to be the brother of South Africas president, Thabo Mbeki, as well as an entrepreneur and political analyst. Mbeki argues that since the end of colonialism, most countries in Africa have been exploited by predatory national political elites who see the state as a means to acquire personal wealth through taxation and regulation.

The history of Africa since the 1960s is the history of groups of elites seeking the political kingdom with the primary purpose of enriching themselves, Mbeki says. To rectify this situation, he believes that Africas poorest people must be empowered through the institutions of the free society: property rights and markets: It is necessary that peasants who constitute the core of the private sector in sub-Saharan Africa become the real owners of their primary asset: land. To enable such ownership, freehold must be introduced and the so-called communal land tenure system, which is really state ownership of land, ought to be abolished.

He also emphasises the importance of removing internal and external restrictions on the ability of Africans to trade: Africas peasants must gain access to world markets. The producers must be able to auction their own cash crops, including coffee, tea, cotton, sugar, cocoa and rubber, rather than be forced to sell them to state-controlled marketing boards.

Mbekis paper follows the recent estimate by Mallam Nuhu Ribadu, the chairman of Nigerias Economic and Financial Crimes Commission, that that countrys politicians had stolen or squandered 220bn (E330bn, $396bn) since independence in 1960, six times the total value of the aid handed out by the US to Europe during the Marshall plan after the second world war.

These findings confirm the work of scholars in the West, such as William Easterly of New York University, who have failed to find any link between aid and growth and want to boost trade instead. In a devastating report from the International Monetary Fund last week, Cristina Arellano, Ale Bul, Timothy Lane and Leslie Lipschitz found that greater aid actually tended to reduce a countrys export performance and the production of goods for exports. The paper also found that aid was usually used to fund consumption rather than investment.

A separate study from the Globalisation Institute this weekend finds that for every 1% increase in aid received by a developing country, there is a 3.65% drop in real GDP growth per person. Contrary to the conventional wisdom in the aid industry, the study finds that even where recipients have good governance, the effect is also negative. The report More Aid, Less Growth by Tomi Ovaska, of the University of Regina in Canada, says that instead of top-down approaches to aid, helping and encouraging developing countries to create business environments that are compatible with free markets is a promising and a potentially cost-effective way to unleash the individual effort and creativity in those countries.

Between 1980 and 2003, more than $116bn (in 2002 dollars) in US development assistance alone went to 89 poor countries. Yet these recipients often experienced poor even negative per capita economic growth, says Brett Schaeffer, of the Heritage Foundation. Of these 89 countries, 37 experienced negative real annual compound growth in per capita GDP, 20 experienced minimal growth of 1% or less, and only 32 experienced growth of more than 1%. Half of these recipients in sub-Saharan Africa saw a real decline in GDP per capita.

Over the past 45 years, nearly $1.5 trillion (in 2003 dollars) has been spent on aid with little success, Schaeffer said last week. This is not to say that the West and the Hyde Park revelers can do nothing to help developing countries. Where Brown and the free-marketeers agree is in their hatred of Western trade barriers and agricultural subsides, which have scandalously impoverished Africans; there should be demos for free trade, not for more subsidies.

The EU accounts for 90% of OECD export subsides in agriculture, dumping cheap food on the markets and bankrupting African producers. The US is also to blame: it gives its cotton farmers $3.9bn a year, driving down world prices by 10-20%, costing West African countries $250m a year. Free trade in cotton would boost sub-Saharan Africa cotton exports by 75%. Blairs Commission for Africa also said free trade in sugar would raise world prices by 40% and could generate $4.7bn for developing countries.

Ultimately, however, Africans must also help themselves. The Africa Commission acknowledges this: While African governments have been pressing for decades for the removal of OECD trade barriers, many of their own barriers to trade are relatively cheap and easy to remove, and can be, in some cases, more damaging that rich-country barriers. Regional trade is worth 26.5% of GDP in East Asia and the Pacific, 15.3% in Europe and Central Asia but just 5.3% in Sub-Saharan Africa.

There is an urgent need for Africans to boost their inter-regional trade, partly to reduce their dependency on commodity exports to the West. Ask an African business person what needs to be done and chances are that very high on their list will be facilitating internal African trade by sweeping away bureaucracy and taxes. The facts speak for themselves: it costs the same to clear a 20-foot container through the ports of Abidjan or Dakar as it does to ship it all the way to a north European port.

Sub-Saharan Africa suffers from the highest average customs delays in the world; Estonia requires one day for customs clearance versus 30 days on average for Ethiopia. An average customs transaction in a developing country is estimated to involve 20 to 30 parties, 40 documents, and 200 data elements, 30 of which have to be repeated at least 30 times, according to the United Nations Conference on Trade and Development.

The UN Economic Commission for Africa calculates that the average customs delay in Africa is 11.4 days, against 5.5 in Asia and 3.9 in Western Europe. Each day spent in customs adds 0.8% to the cost of goods. Trade could be greatly improved if such costs were reduced, as in many instances they outweigh the tariff costs, according to Standard Chartered.

In a report out this weekend, its economists Gerard Lyons and Razia Khan argue that freight costs within Africa are too high in sub-Saharan Africa they are roughly twice the world average and that barriers such as checkpoints are evident across some regional communities. There are three sizes of rail gauges in Africa and even neighbouring countries such as Botswana, Namibia and Zambia have different regulations on trucks and loads.

Hernando de Soto, a Peruvian economist who has done more to help poor countries than any of those in attendance in Edinburgh, including Gordon Brown, is another dissenter who has dedicated his lifestyle to harnessing the power of the market to help the poor. For his efforts, the Peruvian Marxist terror group Shining Path targeted him for assassination: his think-tank was bombed and his car machine-gunned; fortunately he survived and has a far more interesting tale to tell than most members of the aid industry.

According to de Soto,

who runs the Institute for Liberty and Democracy,

the reforms associated with establishing capitalism in developing countries and long endorsed by Western-dominated groups such as the World Bank and the IMF low inflation, a limited budget deficit, openness to trade and capital flows, and privatisation are necessary but not sufficient. They gloss over the crucial factor that has made capitalism such a successful system in the United States, Western Europe, Japan and the Asian tigers: respect for property rights, contracts and the rule of law. Without the latter, the former will often lead only to chaos, the rule of the mob, corruption, the rise of Mafias and Russian-style, gangster capitalism.

In particular, de Soto has focused on the fact that the poor in developing countries are usually locked out of the formal, legal economy. They have houses but not titles; crops but not deeds; businesses but not statutes of incorporation, de Soto argues. All too often, what passes for ownership is a system of informally evolved and acknowledged property rights, rather than the real thing. And because the poor lack formal legal title to their property, they are unable to use their assets as collateral. They cannot get bank loans to expand their businesses or improve their properties.

De Soto originally estimated the amount of such dead capital in untitled assets held by the worlds poor as at least $9.3 trillion a sum that is probably even greater today and that dwarfs the amount of foreign aid given to the developing world since 1945 and puts Browns taxpayers cash in the pale. Governments in developing countries must therefore devise a detailed plan to transform the current, extra-legal ownership of assets into real property rights, and to recognise the informal arrangements that function within the communities of the poor.

The situation in Uganda illustrates de Sotos point. Although women in Uganda make up 70% to 80% of the agricultural work force, only 7% own land and only 30% have access to and control over proceeds. One of the main problems I faced when starting and expanding my business was access to capital. I started my own business by selling my car. When I wanted to expand no bank would look at me, says Sarah Kitakule, who chairs a fascinating group with over 800 members called the Uganda Women Entrepreneurs Association. Its twin slogans are A Wealthy Woman A Wealthy Nation and Empower Women to Create Wealth.

The Association is exactly what Africa needs more of: a dynamic group of self-made Africans that support capitalism and property rights and reject the failed statist nostrums of the past, unlike too many of the traditional, public-sector, Western-educated African elite. The future of Africa lies in internal reforms, the establishment of the rule of law and greater economic stability, to enable a new generation of entrepreneurs and business people to rise up and conquer global markets.

The West can help by tearing up its trade barriers and scrapping its deadly export subsidies; but not by handing out cash. If only those demonstrating in Edinburgh this weekend were to accept this, they would actually be helping to make poverty history. Instead, despite their good intentions, they may inadvertently be helping to prolong Africas misery.

http://www.thebusinessonline.com/Stories.aspx?StoryID=1C80DA35-3838-4F1A-A9F9-5C7E04BBCB88

 

What you posted, in the end, does nothing except continue to promote the attitude of Africa as a victim. It wants to dwell on past wrongs instead of trying to do what is right today. When Africa should be instituting reforms and improving their governments and ending oppression, then what good does it do to focus on the colonialism of 50 years ago?

 

"For God's Sake, Please Stop the Aid!"

The Kenyan economics expert James Shikwati, 35, says that aid to Africa does more harm than good. The avid proponent of globalization spoke with SPIEGEL about the disastrous effects of Western development policy in Africa, corrupt rulers, and the tendency to overstate the AIDS problem.

Economist James Shikwati: "Despite the billions that have poured in to Africa, the continent remains poor."
SPIEGEL: Mr. Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa...

Shikwati: ... for God's sake, please just stop.

SPIEGEL: Stop? The industrialized nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.

SPIEGEL: Do you have an explanation for this paradox?

Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.

SPIEGEL: Even in a country like Kenya, people are starving to death each year. Someone has got to help them.

Shikwati: But it has to be the Kenyans themselves who help these people. When there's a drought in a region of Kenya, our corrupt politicians reflexively cry out for more help. This call then reaches the United Nations World Food Program -- which is a massive agency of apparatchiks who are in the absurd situation of, on the one hand, being dedicated to the fight against hunger while, on the other hand, being faced with unemployment were hunger actually eliminated. It's only natural that they willingly accept the plea for more help. And it's not uncommon that they demand a little more money than the respective African government originally requested. They then forward that request to their headquarters, and before long, several thousands tons of corn are shipped to Africa ...

SPIEGEL: ... corn that predominantly comes from highly-subsidized European and American farmers ...

Shikwati: ... and at some point, this corn ends up in the harbor of Mombasa. A portion of the corn often goes directly into the hands of unsrupulous politicians who then pass it on to their own tribe to boost their next election campaign. Another portion of the shipment ends up on the black market where the corn is dumped at extremely low prices. Local farmers may as well put down their hoes right away; no one can compete with the UN's World Food Program. And because the farmers go under in the face of this pressure, Kenya would have no reserves to draw on if there actually were a famine next year. It's a simple but fatal cycle.

SPIEGEL: If the World Food Program didn't do anything, the people would starve.

Shikwati: I don't think so. In such a case, the Kenyans, for a change, would be forced to initiate trade relations with Uganda or Tanzania, and buy their food there. This type of trade is vital for Africa. It would force us to improve our own infrastructure, while making national borders -- drawn by the Europeans by the way -- more permeable. It would also force us to establish laws favoring market economy.

SPIEGEL: Would Africa actually be able to solve these problems on its own?

Shikwati: Of course. Hunger should not be a problem in most of the countries south of the Sahara. In addition, there are vast natural resources: oil, gold, diamonds. Africa is always only portrayed as a continent of suffering, but most figures are vastly exaggerated. In the industrial nations, there's a sense that Africa would go under without development aid. But believe me, Africa existed before you Europeans came along. And we didn't do all that poorly either.

SPIEGEL: But AIDS didn't exist at that time.

Shikwati: If one were to believe all the horrorifying reports, then all Kenyans should actually be dead by now. But now, tests are being carried out everywhere, and it turns out that the figures were vastly exaggerated. It's not three million Kenyans that are infected. All of the sudden, it's only about one million. Malaria is just as much of a problem, but people rarely talk about that.

SPIEGEL: And why's that?

Shikwati: AIDS is big business, maybe Africa's biggest business. There's nothing else that can generate as much aid money as shocking figures on AIDS. AIDS is a political disease here, and we should be very skeptical.

SPIEGEL: The Americans and Europeans have frozen funds previously pledged to Kenya. The country is too corrupt, they say.

Shikwati: I am afraid, though, that the money will still be transfered before long. After all, it has to go somewhere. Unfortunately, the Europeans' devastating urge to do good can no longer be countered with reason. It makes no sense whatsoever that directly after the new Kenyan government was elected -- a leadership change that ended the dictatorship of Daniel arap Mois -- the faucets were suddenly opened and streams of money poured into the country.

SPIEGEL: Such aid is usually earmarked for a specific objective, though.

Shikwati: That doesn't change anything. Millions of dollars earmarked for the fight against AIDS are still stashed away in Kenyan bank accounts and have not been spent. Our politicians were overwhelmed with money, and they try to siphon off as much as possible. The late tyrant of the Central African Republic, Jean Bedel Bokassa, cynically summed it up by saying: "The French government pays for everything in our country. We ask the French for money. We get it, and then we waste it."

SPIEGEL: In the West, there are many compassionate citizens wanting to help Africa. Each year, they donate money and pack their old clothes into collection bags ...

Shikwati: ... and they flood our markets with that stuff. We can buy these donated clothes cheaply at our so-called Mitumba markets. There are Germans who spend a few dollars to get used Bayern Munich or Werder Bremen jerseys, in other words, clothes that that some German kids sent to Africa for a good cause. After buying these jerseys, they auction them off at Ebay and send them back to Germany -- for three times the price. That's insanity ...

SPIEGEL: ... and hopefully an exception.

Shikwati: Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide.

SPIEGEL: Following World War II, Germany only managed to get back on its feet because the Americans poured money into the country through the Marshall Plan. Wouldn't that qualify as successful development aid?

Shikwati: In Germany's case, only the destroyed infrastructure had to be repaired. Despite the economic crisis of the Weimar Republic, Germany was a highly- industrialized country before the war. The damages created by the tsunami in Thailand can also be fixed with a little money and some reconstruction aid. Africa, however, must take the first steps into modernity on its own. There must be a change in mentality. We have to stop perceiving ourselves as beggars. These days, Africans only perceive themselves as victims. On the other hand, no one can really picture an African as a businessman. In order to change the current situation, it would be helpful if the aid organizations were to pull out.

SPIEGEL: If they did that, many jobs would be immediately lost ...

Shikwati: ... jobs that were created artificially in the first place and that distort reality. Jobs with foreign aid organizations are, of course, quite popular, and they can be very selective in choosing the best people. When an aid organization needs a driver, dozens apply for the job. And because it's unacceptable that the aid worker's chauffeur only speaks his own tribal language, an applicant is needed who also speaks English fluently -- and, ideally, one who is also well mannered. So you end up with some African biochemist driving an aid worker around, distributing European food, and forcing local farmers out of their jobs. That's just crazy!

SPIEGEL: The German government takes pride in precisely monitoring the recipients of its funds.

Shikwati: And what's the result? A disaster. The German government threw money right at Rwanda's president Paul Kagame. This is a man who has the deaths of a million people on his conscience -- people that his army killed in the neighboring country of Congo.

SPIEGEL: What are the Germans supposed to do?

Shikwati: If they really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own two feet.

http://service.spiegel.de/cache/international/spiegel/0,1518,druck-363663,00.html

 

The West definitely needs to re-focus its aid strategy, it's pretty clear that we need to take a more long-term approach of promoting economic & democratic viability, health care & education instead of throwing money into the hands of corrupt regimes. As mentioned in the first article, reforming our trade barriers & subsidies would be a great place to start.