Dead Aid is Dead Wrong

Mo Ibrahim: Good governance will bolster African aid

May 29th, 2009 5:30 PM UTC
By Chris Scott

In the Financial Times, Mo Ibrahim argues that while investment and good governance will ultimately solve Africa’s problems, “effective aid has an important role to play in the quest for sustainable economic growth and poverty reduction.” Ibrahim offers this assessment in light of the recent debate about aid in the wake of Dambisa Moyo’s book Dead Aid. Ibrahim argues for a “holistic approach to development in Africa that is centred on good governance.”

Excerpts below, full piece here

The critical argument should not be about aid or no aid – no one can question the necessity of pure humanitarian aid as long as it satisfies basic good governance criteria. The argument should be about where to focus aid to achieve the best returns for donor taxpayers and aid recipients. I propose two areas to focus aid: the hardware of Africa, infrastructure and regional integration; and human software, in the form of education and health.

The reality is that most African countries are sub-scale and fundamentally unable to compete in a global market. If economies the size of the UK, Germany and France find regional integration necessary to ensure growth, then 53 un-integrated African states have a competitive disadvantage. This fragmentation is evident in Africa’s transportation infrastructure, geared towards trade outside rather than within the continent. Africa needs to integrate its economies and open their borders to each other. Development aid can help these efforts and facilitate intra-African trade. This capital investment cannot succeed without investment in education and health.

Finally, while debate on development aid is of great importance, more of this energy should be spent on climate justice. Africans have emitted the least carbon per capita but will have to face the greatest consequences of its emission. A worthier use of the time of these great African and other economists is to devise a solution that allows the continent to meet the adaptation and mitigation costs of climate change.

-Chris Scott

Edith Jibunoh: “Let Africans say when they’ve had enough aid”

May 15th, 2009 10:05 AM UTC
By Edith Jibunoh

The Financial Times published a letter from ONE’s Senior Manager for African Outreach, Edith Jibunoh.

Let Africans say when they’ve had enough aid
Published: May 13 2009 03:00 | Last updated: May 13 2009 03:00
From Ms Edith Jibunoh.

Sir, Rwanda is an example of a country where focused government leadership has delivered striking successes against poverty, disease and illiteracy (”Africa has to find its own way to prosperity”, Paul Kagame, May 8). But this leadership has been backed by sizeable injections of donor cash.

In just one example, malaria cases and deaths have been cut by two-thirds nationwide, thanks in large part to the effective distribution of millions of bed nets provided by the Global Fund to Combat Aids, TB and Malaria.

Given this success, President Kagame’s endorsement of calls for a rapid shut-off of most overseas assistance appears puzzling. He does, however, raise two crucial issues: when to finally turn off the aid taps, and how best to support the African entrepreneurial flair that will ultimately drive the continent’s growth.

Put simply, the scope of aid should be determined by developing countries – governments and citizens. It is they who should define at what point its goals have been achieved and when it should be ended. Until then, it should be carefully monitored, and reduced or expanded based on evidence, not ideology. All aid programmes should have a built in exit strategy.

As for supporting African dynamism, last week’s Investing in Africa’s Emerging Markets conference at London’s Chatham House was a perfect showcase for why canny investors should bet on Africa. Speakers from across the continent described the dizzying growth and investment successes of the past decade, and the alchemy being created by Africa’s young entrepreneurs.

They also acknowledged that, in Africa as elsewhere, a healthy, educated workforce is essential to underpin economic growth. This is where “smart aid” comes in – aid that is well managed, that is driven by local priorities and which supports African citizens to hold their governments accountable for the delivery of results.

Edith Jibunoh,
Senior Manager,
Africa Outreach,
One,
Abuja, Nigeria

Michael Cohen on Dead Aid

May 6th, 2009 1:38 PM UTC
By Steve Wilson

Researcher and author Michael Cohen today added his voice to reviews of the book “Dead Aid” by Dambisa Moyo. Writing in “World Politics Review,” Cohen says there are many holes in Moyo’s argument, including undocumented statistics and too much faith in Chinese involvement in Africa. But Cohen says that perhaps Moyo’s biggest mistake is that she fails to differentiate between different types of aid, instead lumping all types of aid together in her criticisms.

Moyo, Cohen writes, characterizes all aid as coming in the form of direct cash to governments, ignoring perhaps the most prominent form of aid, especially in recent years, which is health and humanitarian aid, such as medicine, equipment support and health infrastructure.

Perhaps Moyo’s greatest sin is not differentiating between types of aid. Only a few years ago, Botswana was so ravaged by HIV-AIDS that it’s president spoke of possible national “extinction.” Ultimately, outside assistance from the United States, the United Nations, the Gates Foundation and the drug company Merck helped save Botswana from this fate. The Botswana aid came in the form of money and, more importantly, technical assistance, which can often be more effective than resource flows in producing positive development outcomes. Yet, in Moyo’s formulation there is only one type of aid — money, usually bilateral in origin — and it’s bad. Moyo argues that African countries — not the West — should be tackling the AIDS crisis, but ignores the fact that her best example of a successful African economy (Botswana) was unable to do just that.

Cohen concludes that while it is critical that we debate how aid can be effectively and efficiently delivered to reach poor Africans, Moyo’s argument is dangerous and would have the opposite effect that she is aiming for…

In an era of fiscal belt-tightening, this debate is more crucial than ever. That Moyo wants to help her native continent is not in dispute. But the naïve solutions she advocates in “Dead Aid” would have the exact opposite effect, and risk emboldening those who argue for turning off the aid tap for reasons that have nothing to do with altruistic support for African countries.

Moyo would have been better off writing a book that gets to the heart of the problems facing the African continent, instead of offering a bogeyman (aid) and remedy (going cold turkey) that would only consign another generation of Africans to grinding hardship.

-Steve Wilson

President Ellen Johnson-Sirleaf: Aid is working

Apr 9th, 2009 12:27 PM UTC
By Kathy McKiernan

Today the Washington Post is running a great op-ed by President Ellen Johnson-Sirleaf of Liberia. In the piece, the President talks about how the financial crisis threatens Africa’s turnaround and she also weighs in on how development assistance – along with stronger African leadership and better governance — has contributed to important progress in Africa over the past ten years.

President Sirleaf’s commentary is directly relevant to the current debate about the value of aid. She makes clear that aid has been an important component in Africa’s recent progress and cutting aid would have negative effects on poverty and stability on the continent. Thus she provides a very different view from that offered in the new book Dead Aid:

While international attention has been understandably focused on events in Darfur, Somalia and Zimbabwe, countries across the continent including Ghana, Tanzania, Mozambique and Liberia have been quietly turning around. Economic growth rates regularly exceed 5 percent in many nations. Since 2000, 34 million more African children are in school. More than 2 million Africans are on lifesaving HIV/AIDS medicines. Malaria deaths have been halved in Rwanda and Ethiopia, and the disease has been virtually eradicated in Zanzibar. Poverty rates are falling fast, from 58 to 51 percent across the continent in just six years, according to the World Bank.

The key to this progress is stronger African leadership and more accountable governance. Today, more than 20 African countries are democracies, up from just three in the 1980s; they have competitive elections and improved human rights, and their news media are much freer. These efforts have been supported by increasingly effective development assistance from the United States and other partners.

The citizens and leaders of donor nations should recognize how important their assistance has been to the new leadership in Africa and how appreciative most Africans are for this partnership. Critics say that African economies are shrinking, that poverty is rising and that failing aid is the culprit. But this argument is at least a decade out of date. Africa’s turnaround is real, the evidence indisputable. Africans themselves have been the key to this reversal, but more effective aid has played an important role. Reducing aid would slow private-sector growth, stall poverty reduction, and undermine peace and stability in countries that are struggling to become part of the global economy.

-Kathy McKiernan

Madeleine Bunting on Dead Aid: “Disastrously irresponsible”

Apr 8th, 2009 9:54 AM UTC
By admin

Madeleine Bunting of The Guardian wrote a critical review of Dead Aid last month. Below are some excerpts; you can read the full piece here.

There are so many generalisations skidding over decades of history, such frequent pre-emptory glib conclusions, that it is likely to leave you dizzy with silent protest.

Time and again, she fails to grapple with the single biggest factor determining the poverty of the continent - how the state functions, and has failed to function.

Her proposal to phase out aid in five years is disastrously irresponsible: it would lead to the closure of thousands of schools and clinics across Africa, and an end to the HIV antiretroviral, malaria and TB programmes, along with emergency food supplies, on which millions of lives depend.

-Josh Peck

Dead Aid: Dead Wrong

Apr 6th, 2009 9:56 AM UTC
By Ben Hubbard

This is cross-posted from Think Progress’ Wonk Room.
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It’s hard keeping up with the avalanche of inaccuracies and misinformation coming from Dambisa Moyo, the Zambian-born banker turned aid critic and now author of “Dead Aid.” You can see the growing catalogue that ONE has compiled here.

Yesterday, we caught wind of a Q and A she did with Fast Company magazine where she confirmed what we’ve long suspected: that Moyo has little understanding of the health and poverty fighting programs she routinely criticizes. This time it was PEPFAR, the US anti-AIDS program, which has put over 2 million Africans on life-saving treatment. Here’s what she had to say:

Let’s talk about Pepfar. They’ve increased it to $30 billion for 15 countries. Say every country roughly gets $2 billion. Zambia has 10 million people, so that’s roughly $200 a person. That’s approximately the per-capita income of Zambia — you’re roughly doubling the per capita income. But that has had no meaningful impact on the health sector. $2 billion and you can’t overhaul the system? That seems to me completely absurd. African governments have completely abdicated their responsibility.

If Ms. Moyo had any basic knowledge of the program – or had done a simple Google search — she’d know that last summer the U.S. Congress approved $39 billion in funding over five years for HIV/AIDS, malaria and tuberculosis programs under both PEPFAR and the Geneva-based Global Fund to fight AIDS, TB and Malaria. Together, these two programs fund projects in over 137 countries.

PEPFAR is not a perfect program and its supporters have historically been its loudest critics, but no one with any basic knowledge of the program would doubt its groundbreaking (and lifesaving) achievements in just five years. By the end of 2008, PEPFAR was supporting treatment for more than 2 million people in Africa; care for more than 10 million people with HIV worldwide, including more than 4 million orphans and vulnerable children; and providing antiretroviral treatment for pregnant women, allowing nearly 240,000 infants to be born HIV free.

Furthermore, consider that just 10 years ago it cost $10,000 per person per year to treat a patient with AIDS. Treatment is now available for $140 per person per year, a breathtaking improvement in efficiency.

Moyo goes on to say that only a fifth of PEPFAR money reaches the ground.

The dollar amount [of PEPFAR] that hits the individual is 20 cents on the dollar if you’re lucky.

We tend to agree with Ms. Moyo that not enough aid money is hitting the ground, but her suggestion that only 20 cents on the dollar in PEPFAR money is hitting the ground has no basis that we are aware of. We challenge Ms. Moyo to provide evidence of her assertion. Where is the evidence? Rather than making up numbers and misleading the public, we wish Ms Moyo would join us in supporting the new aid transparency initiative we’re backing called Publish What You Fund.

Moyo’s comments would be laughable if the subject matter wasn’t AIDS and the question wasn’t whether the United States and others should continue these successful, life saving programs.

-Ben Hubbard, Chief of Staff, ONE

Michael Gerson on Dead Aid: Dead Wrong

Apr 3rd, 2009 9:58 AM UTC
By Chris Scott

In today’s Washington Post, Michael Gerson offers a largely critical review of Dambisa Moyo’s book Dead Aid. Accusing the book of pushing “the envelope of absurdity” Gerson claims that under Moyo’s proposal, “many now alive would be dead.”

Excerpts below, full piece here. You can read more about this Hot Topic here.

Moyo is on firm ground in criticizing decades of direct foreign assistance to African governments. Such aid has often propped up corrupt elites, shielded leaders from the consequences of their own incompetence and delayed reforms necessary for the development of working markets. She is correct in emphasizing the decisive role of trade, direct foreign investment and local capital in the development of poor nations — sources of opportunity that dwarf aid flows in size and importance.

But Moyo does not take sufficient account of the broad reaction against this kind of direct aid beginning in the 1990s. The United States started taking a much more targeted and strategic approach. The Millennium Challenge Account directed new aid to nations willing to work as responsible partners, dedicated to reform and transparency. Initiatives on AIDS and malaria required and achieved measurable outcomes and have often worked through civil society instead of giving money directly to African governments.

But it is perhaps for the best that Moyo did not write on these issues, because she knows little about them. Referring to America’s AIDS program, she states: “In 2005, the United States pledged US $15 billion over five years to fight AIDS (mainly through the President’s Emergency Plan for AIDS Relief). . . . But this had strings attached. Two-thirds of the money had to go to pro-abstinence programmes.” The year of the pledge was 2003. And last year about one-thirteenth of the program was dedicated to both abstinence and marital faithfulness programs. It is not a small thing for an economist to be off by a factor of nine. And it is not a minor thing for Moyo to dismiss and distort the achievements of a foreign aid program that helped save her homeland of Zambia from social and economic ruin. In 2004, 7 percent of Zambians who needed AIDS drugs were receiving them. By September, that figure should exceed 66 percent. AIDS drugs, admittedly, do not guarantee economic growth. But I suspect that a generation of hopeless mass death would have undermined Zambia’s economic prospects.

If Moyo’s point is that some aid can be bad, then it is noncontroversial. If her point is that all aid is bad, then it is absurd. The productive political agenda is to increase the good while decreasing the bad. The productive academic debate is distinguishing between them.

-Chris Scott

Strive Masiyiwa on Dead Aid

Apr 1st, 2009 10:00 AM UTC
By Chris Scott

Strive Masiyiwa is chairman and founder of Econet Group, as well as one of Time Magazine’s most influential people in 2002. He offers the following response to Dambisa Moyo’s new book “Dead Aid.” You can read more on this Hot Topic here.
……………….

There was a time when as a businessman, I used to think of donor AID in much the same way as Ms. Moyo. For me I thought all we needed to solve the problems in Africa was to teach people to be entrepreneurs; to end corruption and waste by governments; get better leadership, and so forth. And yes I saw aid as part of the problem. Then one day about 20 years ago, I attended a funeral of an employee who had died of HIV/AIDS. He left behind a dying wife, and three little children. I was forced to look after those children because there was no one else to help. Within a matter of months, I had over 40 children in my care through similar circumstances! I soon realized that we had a disaster on our hands, and that I had to do something, which went beyond orphans of my own employees. This is when my wife and I set up a foundation we call the Capernaum Trust, through which we provide assistance to more than 26,000 orphans.

Through my involvement with this foundation, which is funded entirely by us, as Africans, I have also come into contact with many donor organizations from outside Africa, and their work. I have worked with them on all types of programs to help the poor and most vulnerable right across Africa. I have seen many good programs, and I have also seen many bad ones, and there is no doubt that there are many things that can be done to improve some of these programs. But, let me say this, quite categorically, the biggest disaster you can create is to end donor aid in Africa, until you have an alternative, that is better, and has been tested on the ground.

As for the views that I held before I got INVOLVED, at a personal level, it was not that they were wrong, it is just that INVOLVEMENT, helps you to get a better perspective on reality. And nothing is ever that simple.

-Strive Masiyiwa, Chairman and Founder: Econet Group

Dr. Coutinho’s Dead Aid Critique on Huffington Post

Apr 1st, 2009 9:59 AM UTC
By Chris Scott

The Huffington Post is running a piece by Dr. Alex G. Coutinho critiquing Dambisa Moyo’s book Dead Aid. You can follow our coverage of this Hot Topic here.

Excerpts below, full piece here
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Africa’s problems are predominantly those of a systematic failure to harness the full potential of its people. Countries that first invest in their people by educating them, protecting their health and providing opportunities inside and outside their countries are those countries that have progressed, with stable economies, a higher GDP and “happiness factor.” In addition countries like India and China have huge internal markets which give these countries considerable insulation from export-driven economic vagaries.

Africa needs to focus on social development — health, education and job creation, while at the same time developing its production capacities and as large an internal market as possible. The other necessary ways forward are, of course, visionary leadership, eradication of corruption, good stewardship of natural resources and, for a while at least, management of Africa’s burgeoning population till generated resources can support larger populations.

I do share the same aspiration for a prosperous Africa that is not dependent on crumbs from the rich. Nonetheless we are now in an interconnected global economy and global destiny and the solutions to underdevelopment do include aid — albeit aid that is linked to social welfare and development, rather than aid to build up armies or aid in return for mortgaging the natural wealth of a country to another “model” development partner.

………

-Chris Scott

More on Dead Aid

Mar 30th, 2009 2:11 PM UTC
By ONE.Partners

I would like to address some of the concerns raised in the blog about an email on Dead Aid that we sent to a small number of people who we have worked with in Africa. I’d also like to flesh out our thoughts on the book – what we agree with and what we don’t. We welcome this debate about the book and more broadly about the role aid has to play in combating poverty in Africa.

In terms of the email, my colleague Tyler Denton contacted Iris Mwanza, who he met on a trip to Zambia last year, to ask if she wanted to comment on the book and on how she has seen aid working in Zambia, particularly given that she oversees an AIDS program funded by US aid. Why did he do that? Dambisa is saying that aid doesn’t actually reach people in Africa and they would not suffer if it were cut off. We know that is not true. We could simply state our belief and back it up by verifiable statistics, but we thought it would be more impactful to hear from people working on the ground in Africa who could speak to their personal experiences with aid. It wasn’t an attempt to shut a conversation down, but an effort to open one up. And that’s succeeded! We welcome a vigorous debate on the book and more importantly on how we can all work together to help those living in extreme poverty. On that front, our concerns with the book will be no surprise to Dambisa. We have met with her several times. Our executive director Jamie Drummond even met with her before her book was published and gave her statistics about the positive difference aid was making – in fighting AIDS and malaria and putting kids in school, for example – but she did not include them. He spoke to her again in the past week. We are in a dialogue with her and we agree with her on the importance of trade and investment in fighting poverty in Africa, two things we have actively supported ourselves. We also agree with her that not all aid is spent well and that many many africans have concerns about aid, because in certain cases if delivered inappropriately it can weaken the accountability of government to citizens. That kind of aid needs phasing out and reform. We’re for the kind of smartaid that delivers results and actually strengthens the accountability linkage. But we part ways when she says that aid is not getting to people and that Africans won’t suffer if it’s all cut off in 5 years. What about the 2 million Africans with HIV who are alive today because they take ARVS paid for by aid? What would happen to them if aid were completely cut off? Or what about the millions more who are still dying of HIV because there is actually too little aid to pay for medicine for everyone who needs it?

I also want to address the comments some have made on “humanitarian aid.” In her interviews and in the book, Moyo says she believes in an exception for humanitarian aid, which she explains to mean the kind of aid provided after a disaster like an earthquake or the tsunami. If Moyo has been misunderstood and also believes in the importance of funding critical poverty reducing programs for combating AIDS and malaria that would be great news and we would be happy to amend our statements on the book. But when you look at her interviews and the book itself there is no evidence that she intends exceptions for these vital programs. In fact, see her comments on health related aid in an interview with Australian Broadcasting Corporation (excerpt below.)

Let’s keep the conversation going! We all have a common goal in wanting to save lives and see a healthy and prosperous Africa. We welcome a constructive debate and suggestions for how to keep doing better.

-Edith Jibunoh

ABC Transcript 3/17/09 (excerpted)
Reporter: Philip Williams

WILLIAMS: And you’re absolutely confident that removing that aid is not going to leave at least some people without food and medicine?

MOYO: I think the ones that will be effected most will probably be the African elite as opposed to the broader population.

WILLIAMS: What will they lose?

MOYO: I think they will lose possibly their bank accounts in Geneva in the worst-case scenario. But, I think beyond that they would also lose the ability to have leisure time and they’ll be required to actually go out and start to work hard to find money to support their social programs in Africa.

WILLIAMS: If you cut off aid within 5 years, surely that’s going to leave millions of people without the support they are now dependent on - food aid, medical aid - aid that really keeps people alive.

MOYO: I don’t believe that’s the case. Most Africans do not see any of the aid that you are alluding to. It’s…. again, their best case scenario on some projects is 20 cents in the dollar that actually makes it to an African - and that’s best case. Effectively, if we continue down this path, we will have many more Africans living in poverty in many… in a few years to come, and that is really the problem - that there are no jobs coming out of an aid model.