Aid Ironies

The debate about foreign aid has become farcical. The big opponents of aid today are Dambisa Moyo, an African-born economist who reportedly received scholarships so that she could go to Harvard and Oxford but sees nothing wrong with denying $10 in aid to an African child for an anti-malaria bed net. Her colleague in opposing aid, Bill Easterly, received large-scale government support from the National Science Foundation for his own graduate training.

I certainly don't begrudge any of them the help that they got. Far from it. I believe in this kind of help. And I'd find Moyo's views cruel and mistaken even she did not get the scholarships that have been reported (Easterly mentioned his receipt of NSF support in the same book in which he denounces aid). I begrudge them trying to pull up the ladder for those still left behind. Before peddling their simplistic concoction of free markets and self-help, they and we should think about the realities of life, in which all of us need help at some time or other and in countless ways, and even more importantly we should think about the life-and-death consequences for impoverished people who are denied that help.

Nine million children die each year of extreme poverty and disease conditions which are almost all preventable or treatable or both. Impoverished countries, with impoverished governments, can't solve these problems on their own. Yet with help they can. The Global Fund to Fight AIDS, TB, and Malaria, and the Global Alliance on Vaccines and Immunizations are both saving lives by the millions, and at remarkably low cost. Goldman Sachs, Ms. Moyo's former employer, gives out more in annual bonuses to its workers than the entire rich world gives to the Global Fund each year to help save the lives of poor children. And when Goldman Sachs got into financial trouble it got bailed-out by the US Government. Rich people have an uncanny ability to oppose aid for everybody but themselves.

Recently Paul Kagame, President of Rwanda, wrote an op-ed for the Financial Times praising Moyo's fresh thinking. This is extraordinary. His government has depended on aid for more than a decade. Nearly half the budget revenues currently come from aid. Rwanda currently imports around $800 million of merchandise each year, but only earns $250 million or so in exports. So how does it do it? Aid, of course, helped to pay for around $450 million of the imports. Without foreign aid, Rwanda's pathbreaking public health successes and strong current economic growth would collapse. Kagame's op-ed did not help FT readers to understand this.

Americans are predisposed to like the anti-aid message. They believe that the poor have only themselves (or perhaps their governments) to blame. They overestimate the actual aid from the US by around thirty times, so they imagine that vast sums are flowing to Africa that are then squandered. Many believe, typically in private, that by saving African children we would be creating a population explosion, so better to let the kids die now rather than grow up hungry. (I'm asked about this constantly, usually in whispers, after lectures). They don't understand the most basic point of worldwide experience: when children survive rather than die in large numbers, households choose to have many fewer children, in fact more than compensating for the decline in child mortality. Africa's high child mortality is ironically a core reason why Africa's population is continuing to soar rather than stabilize as in other parts of the world.

Of course, most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs - the good and the bad - into one big undifferentiated mass, rather than helping people to understand what is working and how it can be expanded, and what is not working, and should therefore be cut back. Nor do Americans hear that many poor countries graduate from the need for aid over time, precisely because aid programs help to spur economic growth and successfully prepare countries to tackle future priorities. US aid to India for increased food production in the 1960s paved the way for India's growth takeoff afterwards. There are countless other examples in which countries have benefited from aid and then graduated, including Korea, Malaysia, Taiwan, Israel, and others. Egypt is on that path today, and Rwanda, Tanzania, Ghana, and others will be as well if both donors and recipients carry forward with a sensible assistance strategies.

Here are some of the most effective kinds of aid efforts: support for peasant farmers to help them grow more food, childhood vaccines, malaria control with bed nets and medicines, de-worming, mid-day school meals, training and salaries for community health workers, all-weather roads, electricity supplies, safe drinking water, treadle pumps for small-scale irrigation, directly observed therapy for tuberculosis, antiretroviral medicines for AIDS sufferers, clean low-cost cook stoves to prevent respiratory disease of young children. Shipment of food from the US is a kind of aid that should be cut back, with more attention on growing local food in Africa.

Out of every $100 of US national income, our government currently provides the grand sum of 5 cents in aid to all of Africa. Out of that same $100, we have found around $10 for the stimulus package and bank bailouts and another $5 for the military. It is not wonderful that what has caught the public's eye are proposals to cut today's 5 cents to 4 or 3 cents or perhaps zero.

Comments

[iskelton]

Why isn't this obvious? The poor state of the U.S. health-care system makes us even more vulnerable to the outbreak and spread of infectious diseases, exacerbated by the global economic downturn and environmental vulnerabilities. Americans and the Fed are the world's top donors.

But how we spend those funds can and must improve, too.

I'd be interested in Mr. Sachs's and The Earth Institute's take on the potential of industrial hemp (suppressed in the U.S.) to address development goals in places like Afghanistan.

[schatsie]

Gosh, I would have loved to join the fat and fabulous and passed on drug resistant TB....mayb­e then they would get the idea about PUBLIC HEALTH and what it has meant in this country...­.

[R.W. Sanders - Huffpost Blogger]

how was copper wire invented? two rich guys fighting over a penny.

[fricpen]

I agree with Mr. Sachs. We should provide more aid to other countries.­.. particularly Africa.

However, our aid should be directed towards reducing fertility and corruption. Africa has the highest fertility rates on the planet and some of the most corrupt governments. If we want to help we should focus on the true sources of the many deprivations these people suffer.

Our aid to date has been mostly a failure. Poverty rates have gone from 10% (pre aid) to current 70% after trillions of mis-spent dollars. We exacerbate problems when we give med and food aid that facilitate increases in fertility and that enable corrupt governments to sustain themselves by profiting from both food and grants.

Our "aid" programs should be thoroughly rethought and framed in holistic perspectives. Otherwise we deceive not only the Africans ... but ourselves while making problems worse.

[liberani]

How ignorant! If only these fecund Africans would stop overbreeding, then their problems are solved immediately. The English used to say the same about the Irish. Catholic Ireland still retains one of the highest birth rate in Europe, but is no longer poor.

Of course the issue of population is always a major consideration in any development programme- but can't be simply reduced to it. The gradual decline we see in the rate of population growth in the developed world over recent decades has more to do with increased life choices, especially for women, leading to delay in marriage or child birth; very little to do with reduced predisposition to mating.

In any case, Africa remains one of the least densely populated regions of the world - population per square area is comparable to the US; and much lower than Europe, China and India.

As for corruption, please don't get me started!

[schatsie]

I am 100%...EVE­RYBODY knows that South and Central America have received aid from the US, but it was to assist the Ruling Elites to keep their corrupt regimes in power.... the people of South and Central America made no economic progress at all for 10 years from 1980 to 1990 and now we wonder why they have gone socialiist­....If you tried to give me $10 for something I bought for $100, I would be mad as heck also....Tr­y to get a gander at the one sided oil agreements that were forced on them....an­d think about what the Saudis did in the 1970s...

[cathysfriend]

Aid certainly can work. In 2007, more than 100 million borrowers who earn less than a dollar a day received and repaid microcredit loans, thereby improving the lot of about 500 million of the poorest. Malaria bednets work. Micronutrients like Vitamin A additives work. Immunization works.

Aid is not alwasy as easy to deliver nor as effective as we'd like to think but aid naysayers choose to turn a blind eye (maybe because of a shortage of Vitamin A!) to the the facts.

[Can-Man]

The poor are survivors, and are ingenious in what they can do, when given half a chance. Do not send money to governments and dictators who keep the money for themselves. But don't punish the poor because providing meaningful aid isn't easy.

[Can-Man]

We need to employ their nationals in programs, rather than paying far more to an American to do the same thing. And there needs to be clear accountability. Goals, with specific steps, so that where programs aren't working they are eliminated, and the ones that are worked are promoted.

As for the food aid situation, that is a travesty. If we want to help starving people, we need to stop requiring food aid to be American food. It costs more, and it has to be sent overseas. Currently, most of it has to be sent on US flagged vessels. This costs lots more, and takes a long time to get where it is going. On top of all that, it helps to kill the farmers in the area who are trying to make a living. Why not just by from local farmers in the first place. The food is cheaper, it gets there faster, and it supports local farmers.

Before cutting aid to the poorest people, there needs to at least be an intelligent discussion about what they need to survive. Dr. Sachs has made an effort to do that. He definitely doesn't support all aid. But he also thinks it is a mistake to eliminate all aid to the poor just because it is difficult to make it work right. Take a look at the success of Microfinance.

[Can-Man]

Some facts. Poor people in Africa, living on less than a dollar a day, have a lot of children because they know that many of them will die. They need the children to help them, and, their surviving children are the closest thing they will have to social security. As infant mortality drop, the birth rates drop, and families focus on the few children they do have.

Not all aid is the same. Some fails. Our own U.S. Agency for International Development, for instance, has a number of problems. Let's start with no accountability. The House Foreign Affairs Committee is working on Foreign Aid reform. In fact, that is a priority for Chairman Howard Berman. Currently our foreign aid program, through the 1961 Foreign Assistance Act, has 140 priorities and 400 directives. The United Kingdom and Canada both have a poverty focus. The purpose of their foreign aid is not to get countries to join a "coalition of the willing." Instead, their programs are to help eliminate the worst aspects of poverty. (E.g., on health problems like HIV/AIDS, TB, Malaria, and programs like Microfinance, which helps the poor start micro-busi­nesses.) We need to focus our aid on programs that work, and work for the poorest. We need to involve the people who are supposed to be benefited from the aid.

[Dutchskie]

No one would deny the great work that Dr. Sachs, has done, is doing and will continue to do. However is it not time to harshly examine the realities of aid. Is it not clear that there are systemic barriers placed in the way of african progress, ironically by the very establishment that is supposed to provide it with opportunities for progress.

Organizational behavior is preventing the aid complex from thoroughly examining its effectiveness. Coupled with geopolitical machinations you have a recipe for disaster.

[valkano]

Jeff Sachs is right. There are certain types of aid that do work. Tens of millions of children would have died since the 1980s had it not been for child survival efforts that brought annual measles deaths down from 3 million a year to less than half a million.

One type of aid not mentioned in his list is education. No nation can advance until it achieve universal education for all its children. President Obama proposed, during his campaign last year, a global fund for eduction with a U.S. commitment of $2 billion. He should follow through with that pledge.

[CAFT]

I agree with valkano. Another example: free bed nets have saved millions of children from malaria, in some countries reducing deaths by more than 50%. There are clear examples of aid being used for ends other than helping people, but there are many examples of real good being done as well. The key is not to simplify the argument into all-or-nothing; rather let's pool our time and talent towards creating the political will (because Lord knows we have enough resources to go around!) to end poverty.

[liberani]

I agree with the general thrust of her argument that aid will not be the solution to Africa's long term problems. But notice that Professor Sachs is not suggesting that either; rather aid in the short term can fill a gap and provide a catalyst for long term growth if directed to the right areas and utilised efficiently. So I find both views accommodating even if the respective camps don't see it that way.

However, the Professor is right to suggest a whiff of hypocrisy from some of us whose lives have been transformed either through generous scholarships or help from families abroad, who now stand opposed to aid programmes like the Millennium Development Goals, which among other objectives, aim to achieve universal primary education for all children in Africa. Programmes like this, if successful, will transform the lives of generations yet unborn and provide them with life choices their parents only dreamt about. I feel I have achieved most I have today because of education; I would not want to deny that to others just for the sake of political posturing.

[liberani]

What we hear often is the opinion of elite urbanites and those in the Diaspora, whose day to day experiences are so far removed from the average farmer in rural Africa. I also reject the implicit suggestion that Professor Sachs is disqualified from offering a perspective on this issue because he is not African; well, his life and work has been dedicated to this issue, and he has had more personal experience in helping to improve the lives of the poor from all over the world. That is sufficient qualification for me.

However, I still think that Professor Sachs is slightly unfair to Dambisa. I have read the book myself, and my understanding is that she is not calling for an immediate cessation of all forms of aid but for a new development model that puts less and less emphasis on aid (and eventually end it!). The aid developmental model has failed, in her view, as it has led govts to rely more on outside help rather than focusing on internal solutions.­..she advocates a gradual move towards market financing solutions for development (raising govt debt in the international capital market, for example), free trade, regional and pan-African economic integration (as a pan Africanist, I would argue that this should be the first step!) - and of course improved governance and accountability.

[liberani]

Guys, before you start name-calling, I suggest you read carefully what the professor is saying. He is definitely not against Africans trading their way out of poverty...­however, this is more of a long term solution to the problems we face (I speak as an African myself). In fact, if all trade barriers were lifted today, Africa versus Rest of the World, we would be at a disadvantage in many areas... In the meantime, the ravages of war, disease, the legacy of colonialism and the Cold War, incompetent and corrupt governments has left millions of our people being unable to afford the bare necessities of life.

Malaria control with bed nets, vaccines, safe drinking water, treadle pumps for small-scale irrigation and similar aid programmes, highlighted by Professor Sachs, do make a lot of difference to the lives of millions of Africans, especially in the rural areas. These comprise over 80% of people in Africa; and their voices are hardly ever heard in this aid debate. Why don't we ask them what they think of aid?

[Makoma]

First of all, there is a difference between private charity (which Moyo supports) and open-ended government aid. Unless Sachs can show that her scholarships were funded at taxpayer expense, he has no argument. By the way, Moyo does support emergency government aid.

Mr. Sachs, why are so opposed to us blacks competing with everyone else with a trade focus, where we are more equal? Instead you want us to continue to be dependent children begging for hand-outs, which reinforces a white supremacist viewpoint. And Africans weaning their reliance off foreign aid? Which Rwandan President Kagame is doing. He never said aid didn't help his country, but he chooses to increasingly wean his country off aid over time and focus more on trade. Which is what every country who has gotten ahead has done. Even China is doing it.

Your focus should be on getting these Western governments to come off their subsidies, which undermine is unfair and unfair trade and hurts Africa.

[Gregory Rader]

It is disappointing to see Sachs accusing his critics of hypocrisy rather than addressing their arguments. It is even more disappointing to see him implying that opposition to aid actually derives from racism. It seems strange to suggest that people who secretly fear a population explosion would point to the economic success of billions of people in Asia as evidence for their arguments. Finally, he implies without justification that aid caused development in numerous countries. He completely ignores alternative explanations: that all the countries he mentions have in the past or are currently in the process of dramatically reforming towards freer markets.

Mr Sachs, please stick to the content of the arguments and don't generalize your critics. Show me the country where aid has resulted in significant quality of life improvement without simultaneous free market reforms. Show me the country where foreign aid has led to the creation of a government more responsive to the local people.

[Dutchskie]

Westerners continue to believe that they, and they alone have all the solutions for the problems of "those" Africans. The farcical reality that has become the Aid apparatus brooks no dissent and of course when all else fails they drag out the big guns, in this case Mr. Sachs to offer scathing denouncements of any idea that goes against what those mighty Western do gooders have in mind for the Africans.

Aid as we know it has massively failed. How anyone can dispute that is laughable. What is also alarming that a person like Bono, is allowed to mock actual experts on the matter and get away with it. Only in the Aid for Africa discourse does celebrity trump knowledge.

What is killing Africa is white guilt, and until we get to the crux of that matter we will continue to see Africa lag behind the rest of the world.

Witness the uproar about China, albeit there are issues there, having the temerity to do actual business with Africa. How dare they!! Like a anonymous Chinese official is alleged to have said "If you've been here 50 yrs why isn't there a road here?". A good and valid question indeed. Until Africa is treated as an equal, which means they must stop being beggards at the grown up nations table, there will be no true progress.

[Tms Ruge]

Hear! hear! Couldn't have said it better!