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Dead Aid: A Look Into Africa's Poverty

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One of my favorite talks from Ciudad de las Ideas was presented by Dambisa Moyo, a brilliant economist from Zambia whose focus on poverty, development, and economic cooperation has been recognized, although not always accepted, throughout the world.

The idea of ​​economic cooperation between rich and poor has its antecedents in the postwar period. It's a romantic idea that has created illusions but offered poor results. In short, cooperation is a form of charity of the rich economies aimed at the poor economies -- and, as you, the readers of this blog know, at Grupo Salinas, we do not believe in charity as a long-term solution to social problems, although in special circumstances it is necessary.

Moyo believes that the resources provided to Africa over the past 50 years have only intensified its poverty. From her point of view, development aid promotes insurmountable distortions in the functioning of the markets.

For Dambisa Moyo, who authored Dead Aid, the trillion dollars that have been transferred in the last five decades, have only exacerbated poverty in Africa.

According to Moyo, these resources have only led to corruption, lack of accountability, and ensured the continuation of undemocratic and repressive governments.

These trillion dollars have also resulted in the lack of viable mechanisms for development, such as a market economy and the emergence of entrepreneurs. All this comes together to explain a complete lack of investment and infrastructure, the perpetuation of poverty, in a nutshell.

In a past entry, I discussed work of Paul Collier, who corroborates these observations, in speaking of the "useful idiots" who are against trade between rich and poor countries, but instead urge greater transfers of resources.

I have said on numerous occasions that the five billion people at the Base of the Pyramid require tools of progress and access to markets, not charity.

Dambisa Moyo argues that charity is a slap in the face that reminds you that you cannot create wealth by yourself. She suggests to the advanced countries that if they really wish to help the African continent, they need to think in terms of more efficient policies, because what Africa needs is not charity but the opportunity to market its products and productive investments.

This message is not welcome among international aid agencies, whose bureaucracies live precisely to get a fraction of these resources, but as Einstein reminds us, the definition of insanity is doing the same things and expecting different results.

I hope that my readers will agree that the base of the pyramid needs tools such as good quality education and health care, accessible credit and savings, insurance, means of transportation, and connectivity, among other powerful instruments that multiply their productivity and enhance their enormous energy.

I invite you to rethink the problem of poverty and to reflect on how we can tackle the underlying causes with effective tools. It is incumbent upon us to imagine a better future, and then find a way to achieve it. Let's think about it.