TCS Daily


Shaming "Vampire States"

By Marian Tupy - March 21, 2006 12:00 AM

[Editor's Note: This is Part One of a two-part series.]

Much has been said about African poverty in recent months. Tony Blair, the British Prime Minister, succeeded in putting Africa's woes center stage at the G8 summit in Gleneagles, Scotland. The accompanying Live Aid concerts, organized by the Irish pop star Bob Geldof, were watched by some 1.5 billion people around the world. Because of his work on Africa, Geldof's fellow Irishman, Bono, became one of Time Magazine's Persons of the Year in 2005.

There is, however, a fatal flaw with their approach to alleviating African poverty. The search for solutions to Africa's misery may preoccupy Western governments, inter-governmental organizations dominated by Western countries (like the World Bank and the International Monetary Fund), a mind-boggling plethora of Western non-governmental organizations and pressure groups, and the Western media. But one crucial component is missing: the commitment of most African governments to pursue pro-growth economic policies and to treat the African people in a humane way.

Far too many African governments operate not for the benefit of the public at large, but in order to enrich tiny political elites. Those elites use every trick in the book to hang on to power. Only last month, Yoweri Museveni, Uganda's leader since 1986, won a presidential election marked by violence, intimidation of the opposition and jailing of the opposition leader, Kizza Besigye, on trumped up charges of treason, terrorism, weapons offences and, for good measure, rape. During his African tour in 1998, President Bill Clinton applauded Museveni as a leader of "African renaissance." Museveni was a member of a "new generation of African leaders," Clinton said. Today it seems that the behavior of the "new" generation of African leaders is not so different from the "old." Until that changes, Africa will not be able to prosper.

The West should avoid giving African governments more resources to embezzle and to use to finance their repressive state apparatuses. Rather, the West should name and shame corrupt African leaders. When those leaders call for Western aid, while at the same time pursuing bad domestic policies, the West should expose their hypocrisy. That is what the new U.S. Trade Representative's initiative on "Open Access to Enhanced Healthcare," does. Launched on February 27, 2006 in Washington, D.C., the initiative aims to reduce tariffs on international trade in medicines and medical equipment. It will compel African leaders to take sides. They can embrace tariff reduction on medicines and benefit the African people. Or, they can retain high tariffs and benefit the African officials, who live off the tariff revenue and bribes that tariff collection brings.

Africa's Shame and Western Folly

It is sometimes said that African politicians treat their countries as if they were their private property. In fact, nothing could be further from the truth. Private property rights, to use economic jargon, internalize future costs of present actions. This frequently leads them to take good care of the things they own. For example, foresters, who over-log their privately owned forests in an unsustainable way, will suffer future revenue losses. The same applies to farmers, who over-till their land, and so on. African political elites do not have to internalize the future costs of their actions. Their money is deposited in Switzerland, their houses are in the south of France and their children are schooled in the United States. Their stay in Africa is often temporary and their behavior is akin to asset stripping. They run what George Ayittey of American University called "vampire states."

That type of behavior is exactly what Nigeria's President Olusegun Obasanjo had in mind when he attacked "Unpatriotic citizens in our midst [who] loot our resources and cart the proceeds away into Western banks." Obasanjo estimated that corruption costs Africa 25 percent of its annual income or $148 billion a year. He should know. Some $300 billion in oil revenues have flown into Nigeria between 1978 and 2003, yet Nigerian income per capita fell from $1457 in 1978 to $1232 in 1998. Nigeria's former military ruler General Sani Abacha alone is rumored to have stolen some $3 billion during his brief rule between 1993 and 1998.

Nigeria's problem with corruption is well-known, but corrupt practices in a relatively well-run Uganda -- a country that was for many years a darling of the international aid community -- are widespread as well. A 2004 study by Ritva Reinikka from the World Bank and Jakob Svensson from the Stockholm University found that out of the 20 percent of Uganda's total public expenditure that was spent on education in the mid-1990s, only 13 percent of that amount ever reached the schools. The rest, the authors found, "was captured by local officials (and politicians)."

If Obasanjo is right, African leaders embezzle three times more revenue than Africa was promised in foreign "aid" at the Gleneagles summit. The size of corruption in Africa makes a mockery of the arguments for foreign aid that have been advanced by Jeffrey Sachs of Columbia University in his 2005 book "The End of Poverty." In Sachs's view, poverty in Africa prevents accumulation of domestic savings. Low savings result in low domestic investment and low investment impedes economic growth. Foreign aid, therefore, is needed to fill that apparent gap between insufficient savings and the requisite investment in the economy.

In fact, Africa is quite rich. As the economist Walter Williams of George Mason University wrote, "In terms of natural resources, Africa is the world's richest continent. It has 50 percent of the world's gold, most of the world's diamonds and chromium, 90 percent of the cobalt, 40 percent of the world's potential hydroelectric power, 65 percent of the manganese, millions of acres of untilled farmland as well as other natural resources." What Africa needs is not "aid," but less corruption.

Before he met with President Bush last fall, Bono appeared on "Late Night with Conan O'Brian." During the show Bono said, "The bottom-line argument here in the U.S. is that people didn't believe [aid] was getting to the people that it was supposed to, because of corruption and stuff like that... They didn't want their tax dollars redecorating presidential palaces. We've covered that now." Sadly, evidence suggests that Bono and others have done nothing of the sort - corruption in Africa has been getting worse not better over the last five years. Each year, Transparency International, a non-governmental organization, publishes its Corruption Perception Index (CPI). The CPI defines corruption as "abuse of public office for private gain." It is measured on a scale from 0 to 10. The higher the number, the lower the corruption.

In 2000, the average African CPI was 3.24. By 2005, the African CPI fell to 2.78.

[Part Two of "Shaming 'Vampire States'" will appear later this week.]

Marian L. Tupy is assistant director of the Cato Institute's Project on Global Economic Liberty.

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9 Comments

No shame
Shame: The painful emotion arising from the consciousness of something dishonouring, ridiculous, or indecorous in one's own conduct or circumstances (or in those of others whose honour or disgrace one regards as one's own), or of being in a situation which offends one's sense of modesty or decency.

How do you shame the shameless?

shaming the shameless
I'm not surprised that Bill Clinton thinks so highly of Yoweri Museveni. Given their druthers, most Democrats would kill to be able to govern like that.

Africa
This article clearly identifies why many in the developed world feel they are being taken for fools. And, not just in Africa, but with all sorts of programs supposedly designed to relieve suffering of one sort or another.
In Africa, millions have died due to Malaria. This preventable malady has taken lives for decades. Yet, the UN & some affiliated NGO's, adamantly oppose the use of DDT to eradicate the vermin that spread the disease. DDT has not been proven to be the health detriment some alleged. By not using DDT, the innocent have suffered.
The UN & some affiliated NGO's have tied aid into compliance with their policy of no DDT usage. By withholding aid they direct a policy that kills. Yet the world continues to fund the UN & these affiliated NGO's who claim to be altruistic & humanitarian.
Add these issues into the mix, shake well with leadership & political elite corruption, and you have an industry of exploitation that has thrived for these decades.
All the while, some blathering "rock star" tells us all we are mean-spirited and should give more to the less fortunate. If only they would really study all of the issues and work to resolve the underlying problems!
Then aid would actually go to those in need and have a lasting, if not life-giving affect. But then we also have the UN sponsored NGO that feels we need to maintain current policies so we "reduce world population to sustainable levels." These folks feel it is OK to withhold DDT from these nations so world population does not get out of control. Just so long as these policies are applicable to everyone but themselves. Once population is reduced to what they feel are acceptable levels, then they feel all will be right with the world. That some poor ignorant guy or kid in Africa had to die so they could live in a world they like, is just too bad!
I find it becoming extremely difficult to believe any of these aid organizations want to do any good at all!

Indoor residual spraying
You might consider widening your reading list. The WHO has no problem with a policy of indoor residual spraying, and a majority of African countries employ the method. No evil empire is withholding DDT from any country in need of this method, which has proven effective and has become commonplace in tropical regions around the world.

Not the way folks down here at TCS tell the story, though. I do wish you would google the issue and see what is actually going on, as opposed to what some would have you believe is going on. This is a nonissue, and is the rankest kind of disinformation.

RIGHT ON!!!
RIGHT ON!! RIGHT ON!! RIGHT ON!!

I just finished writing a study on global HIV/AIDS diagnosis and treatment. Africa has its AIDS problems because of the African governments, their culture of corruption and complacency of the people with regard to the corruption. Hell, they want to get into the circle of corruption, not do away with it.

The only way to drive out the corruption is to starve it out. People say that this will only hurt the common man in Africa. I disagree. They haven't got anything anyway; while their honchos have seven- and ten-figure bank accounts in Switzerland, Lichtenstein and Andorra. It's practically like shooting a dead man --- you can't do anything more to him.

The developed countries have got to stop the way things are done in Africa if our aid is going to make any difference.

No aid money goes to the poor in Africa
Having seen how foreign aid works in Africa anyone who believes it betters the average person's life there would be better advised to buy a lottery ticket and donate the winnings to the Catholic missionaries in Africa than expect for government aid to do anything useful.


Great article. I wonder if the American people realize over a billion dollars a year is used to support the life styles of the rich and infamous in Africa.

Nor does it go to the rich and corrupt
TJ, the Brookings Institution seems to have a different take on our aid to sub-Saharan Africa. They are under the impression that about half of it is going to emergency food aid and the other half to the AIDS initiative. Where do corrupt leaders get their cut out of this pie, which contains virtually nothing in development money?

http://www.brookings.edu/views/articles/rice/20050627.htm

Brookings Schmookings
If you thing the Brookings Institute is looking through rose-colored glasses, you should read some of the UN/WHO stuff. (Although the UN/WHO stuff can be schizoid. On the one hand they want to let you know how effective they are. On the other hand they want things to look in crisis mode to keep wasting money and maintain power.) Probably some of the best data comes from the World Bank.

Have you ever worked in Africa?
USAID cannot account for most of the AID it delivers so AID delivered to Zimbawewe is found for sale in South Africa. AID can't even answer questions about the status of students it sends to the States and you believe Brookings?

By the way I have some swamp land in Ghanna you'd love.

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