TCS Daily

Aid to Africa -- How to Do It Right

By S.T. Karnick - June 14, 2005 12:00 AM

On Saturday, June 11, Reuters reported,


"The world's wealthiest countries agreed on Saturday to write off more than $40 billion of African debts.

"The deal struck by finance ministers from the Group of Eight industrialized nations is part of a British-led campaign to rid sub-Saharan Africa of poverty and diseases such as malaria and AIDS that kill millions every year.


"British Finance Minister Gordon Brown said the deal would provide 100 percent write-offs immediately for 18 countries and that more countries would qualify for relief later."


Britain, chairing the G8 this year, is seeking to double aid to the world's poorest countries by issuing $100 billion of bonds backed by wealthy nations' development budgets. The United States and Japan oppose the plan.


Reuters reports that former rock music star Bob Geldof and others are "urging a million people to turn up in Gleneagles, Scotland, [at next month's G8 meeting] to demand a deal on aid for Africa."


The debt relief campaigners who are complaining that the deal is a drop in an ocean of need are correct, but there is great room for debate over whether debt relief and more aid directed to the governments of most African nations is the best course.


That debate will certainly arise, and it will undoubtedly be heated.


As we evaluate that argument in the coming weeks, it will be important to bear in mind one central fact: Nobody in any position of responsibility wants Africa to be mired in poverty, disease, and despair.


Nobody -- not the United States and Japan, not Great Britain, not the leaders of other wealthy nations, not the leaders of African nations -- nobody wants Africa to be poor. Everybody, on both sides of the argument over African aid, wants Africa to become healthy and prosperous.


The question is, how to do it. Government-to-government aid and NGO-to-government aid have proven ineffective. There can be no doubt of that. The request for debt forgiveness shows that, for if the past half-century of aid directed to African governments had been effective, the present discussion would be moot. Fast growth is possible, but aid to the post-colonial African governments has been a failure. The legacy of colonialism is real but cannot explain or excuse this failure, for other post-colonial nations have prospered greatly during the same period.


Moreover, it is axiomatic that debt forgiveness rewards profligacy. The relief that is sent seldom trickles down to the people and is instead used to prop up corrupt governments. These are facts, not moral judgments.


The people of Africa, like all people anywhere, deserve better.


The current and proposed rounds of debt forgiveness probably will not do much harm in encouraging corruption among African governments, and should probably move forward. For all too many African governments, it would be difficult to be less responsive to the needs of their people.


There are other ways to accomplish aid to Africa, however, and it is time that these move to the fore while we work out the debt relief question.


One excellent proposal is to make the World Bank a true bank, one that allows private organizations in developing nations to draw on accounts that will enable them to implement individualized projects covering a wide variety of constructive activities that give aid where it will do the most good, such as in construction of hospitals, water treatment, malaria prevention, agricultural technology, building of roads (a critical need in many African countries), literacy, immunization, AIDS prevention and treatment (including unbiased research into the causes of Africa's high incidence of the disease), and much, much more.


Other, similar, new financing approaches could fund a great flowering of help for Africa, directed where it will do the most good. People in the wealthy nations want to help, but our aid has not been effective.


During his recent trip to Africa, World Bank president Paul Wolfowitz suggested that his organization is indeed looking beyond government, saying that more action needs to be taken to improve the investment climate on the continent, especially local investment as a key to boosting trade.


The World Banks International Finance Organization already provides aid to private sector projects in developing countries, but it is a small segment of total World Bank aid, and it seeks projects that will make a profit on its investments. The situation in Africa will require much more than investment in private firms. Direct aid from wealthy countries to improve local infrastructure, education, health care, and technological advance within African nations is essential.


These activities should not be expected to turn a direct profit, and I believe that a wide variety of Western organizations would enthusiastically pursue such projects if the governmental red tape -- and occasional harassment and worse -- were stripped away. What wealthy nations governments can do most effectively is to require African governments to allow this aid to reach their people.


Governments all over the world have perpetually proven that their first priority is that of retaining their own power. That is a given, and we cannot change it. We can, however, use it to force those governments to allow help from other nations to reach their people. The next wave of aid to Africa, therefore, must include requirements that governments receiving aid allow the kind of targeted, widespread assistance outlined here to reach the people of Africa.


I propose that the wealthy nations make debt write-offs for developing countries contingent on those governments allowing direct aid by individuals, organizations, and governments of the wealthy nations to private organizations in developing nations. The latter should be allowed to draw on financial accounts that will enable them to carry out individualized projects where help is needed most and in ways that take into account local realities. Such aid is in existence today but is hampered by African governments, and I believe it would increase hugely if those governments were forced to get out of the way.


Only then will the wealthy nations truly be able to help the people of Africa.


S. T. Karnick is an Associate Fellow of the Sagamore Institute for Policy Research and Editor of The Reform Club blog.



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