By Dambisa Moyo,
Ten years ago, it would have been hard to find anyone to question the wisdom and morality of the rich world giving billions of dollars in help to the poor world. A generation reared on Live Aid held these truths to be self-evident.
Now, the intellectual trend is all the other way. Streams of economists, politicians and even disillusioned do-gooders have penned powerful critiques of every aspect of aid and the aid industry; men like Paul Collier, William Easterly and Robert Calderisi. Even the high priests of aid, pop stars such as Bono and Bob Geldolf, now preach a much more nuanced and complex gospel than they did in the 1980s.Yet the intellectual arguments about aid are still conducted largely within a small circle of Western white men. So it is good to welcome a new voice to the debate, and a black African woman, too, Dambisa Moyo, a Zambian economist at Goldman Sachs.
It is remarkable that so few voices have been raised in Africa, supposedly the main beneficiary of the world’s largesse, about how the aid money should be spent, or even whether it should be received at all.Unfortunately, Moyo’s contribution ends there, for “Dead Aid” does not move the debate along much. Yes, she has joined the chorus of disapproval — and that in itself might surprise a few diehards who think that Africans should just be grateful for the aid and shut up. But her arguments are scarcely original and her plodding prose makes her the least stylish of the critics.
Moreover, she overstates her case, almost to the point of caricature. There is almost nobody left, even in the aid lobby, who seriously thinks bilateral (government-to-government) aid is the sole answer to world poverty, as she suggests.“Trade, not aid” is only one of several newish mantras among aidniks that seem to have passed her by. Nonetheless, Moyo is right to argue that the rich world — and Africa — should now focus on other ways of helping poor countries.
Moyo shows how some countries, such as Ghana, have successfully tapped the bond markets for funds. She also has good discussions on the virtues of microfinance, venture capital and liberalizing trade. By concentrating on these three, African governments might well raise more money on their own; some might even lessen their dependence on aid.Private investors will always require good governance to ensure their dollars are not misused. This “trumps all,” argues Moyo. She won’t find many Africans who disagree with that. But getting governments like Nigeria’s or Kenya’s actually to walk the talk has proved a much tougher proposition.
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About the Author:
Dambisa Moyo was born and raised in Zambia, Southern Africa. She completed a PhD in Economics at Oxford University and holds a Masters from Harvard University. She completed a Bachelors degree in Chemistry and MBA in Finance at the American University in Washington D.C.
She worked at Goldman Sachs for 8 years in the debt capital markets, hedge fund coverage and in global macroeconomics teams. Previously she worked at the World Bank in Washington D.C. Dambisa was recently nominated to the Board of Lundin Petroleum – a global independent oil and gas exploration and production company.
Dambisa is a member of Cambridge University’s Centre for International Business and Management (CIBAM), and the Royal Institute of International Affairs (Chatham House). Dambisa is also a Patron for Absolute Return for Kids (ARK), a hedge fund supported children’s charity, and serves on the Board of the Lundin for Africa Foundation, which pledged US$100 million towards microfinance initiatives.
Dambisa argues for more innovative ways for Africa to finance development including trade with China, accessing the capital markets, and microfinance.
Dambisa has also been offered a contract for another book, entitled How the West Was Lost, scheduled for publication with Penguin and Farrar, Straus & Giroux in 2010.
This book examines the policy errors made in the US and other Western economies which culminated in the 2008 financial crisis.
And discusses why financial and economic experts missed the signs of the credit crunch. It also explores the policy decisions that have placed the emerging world- China, Russia and the Middle East, in pole position to become the dominant economic players in the 21st century.
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