Dead Aid - Dambisa Moyo (5 of 5 Locally Produced Bed Nets)

Dead Aid is a provocative look into the failure of aid to Africa over the past 60 years. The author Dambisa Moyo, originally from Zambia, provides a first-hand account of the efforts of the West. Her resume is quite impressive; she holds a bachelors degree in Chemistry and an MBA in Finance from American University, a Masters from Harvard and a PhD in Economics from Oxford. She has worked for both the World Bank and Goldman Sachs. Earlier this year Time magazine named her as one the top 100 most influential people in the world.

The first half of her book describes the reasons why aid has failed to awaken the African continent. She argues that not only has it not helped, but it has exacerbated the problems in Africa. She believes that the primary reason why aid does not work is that it promotes government corruption. Leaders of autocratic regimes quickly become accustomed to receiving large lumped sums of cash from foreign governments. Because they are not expected to pay back the loan, they feel no need to use the money wisely. Much of it is simply funneled out of the country into the corrupt leader’s foreign bank account. Zaire’s president Mobutu is purported to have taken nearly US $5 billion. The rest of it is squandered in ineffective government programs. Very little of it is ever seen by the citizens of the country for which the money was intended. The prospect of overthrowing the corrupt leader to take control of the aid channels causes frequent civil wars. The atmosphere created by the corrupt politicians makes foreign and domestic investment unattractive. Without these investments the country descends deeper into dependency on foreign aid.

According to Dambisa Moyo, the first step to fixing Africa is cutting all aid to the continent. She believes that this will open up greater possibilities for foreign direct investment. She spends a significant portion of the book describing how China is already leading the way in investments in Africa. While much of China’s actions are the result of its need for oil, it has provided much needed infrastructure to several African countries. Many Africans see China’s influence as more positive than the US. Moyo also proposes the institution of micro-credit organizations patterned after the Grameen Bank in India as well as decreasing taxes on African remittances, allowing funds to be transferred directly to the people who need it most.

While the data that Dambisa Moyo offers makes it quite apparent that aid is part of the problem, it is difficult to believe that all aid is detrimental. Employees of the non-profit group where I am interning have indicated that the malaria programs in African have been some of the most effective programs in utilizing foreign aid. Very real successes have been achieved in the country. Malaria rates in each of the 15 target countries of the President’s Malaria Initiative have been reduced. This has allowed families to dedicate their resources to economic growth rather than pills to kill the malaria parasite.

This doesn’t mean that malaria programs are flawless. The administrative pyramid of the President’s Malaria Initiative is extremely complicated. Several layers of bureaucracy separate the source of funding and center of disease control from the African child receiving his or her first dose Artemisinin pill. A reduction of levels and additional correlation meetings between the non-profit organizations using the funding could greatly improve the efficiency with which the funding is used.

Dambisa Moyo also points out that when giving aid to Africa, foreign governments have a tendency to give finished products directly to the people putting many local producers out of a job. Manufacturing plants producing bednets in America can easily undercut start up groups in Africa. When considering an increase to the funding for combating malaria, American organizers should divert funds to local producers whenever possible in order to stimulate economic growth while simultaneously promoting better public health.

Fantastic book. Quick read. Find it. Read it. Love it. Live it.