Dead Aid: Why Aid is not Working and How There is a Better Way for Africa By Dambisa Moyo
November 1, 2011 § 2 Comments
In Moyo’s reading, she uses the fictitious country known as the Republic of Dongo to show the reality of many African countries today facing issues from HIV-AIDS epidemic to being a country freed of the European Colonial world then transformed into a socialist economy that underwent privatization in the 1970s, which resulted in acquiring a lot of debt. Since then, these African countries have been acquiring millions of dollars of aid every year but with aids comes the disenfranchised Africans, poverty, and lack of job creation. However, borrowing countries have been receiving more access to bond investors because of the credit rating agencies such as Standard & Poor’s, Moody’s Investors Service and Fitch Ratings giving high positive ratings in regards to the borrower’s ability and willingness to repay a debt. As we learned last week in Inside Job, these investments are based on derivatives generated. The agencies were found to be giving triple A ratings such as with Enron and then within a week, the company filed for bankruptcy. Regardless, the agencies still receive profit and the raters continue to receive large bonus checks while country such as “Dongo” suffer.
According to Moyo, these countries will never be able to thrive or develop as long as their dependent on “tied aid”. For these poor countries that are looking for the cheapest aid option end up with hidden costs from the rules and agreements implemented when borrowing the money. Throughout Dead Aid, Moyo argues that “aid has not delivered any meaningful or substantial economic performance” therefore Africa should seek alternatives to finance its development. Moyo proves her point by explaining that there is a decline in aid flows because of donor countries are now facing their on financial pressures especially the strains that the western economies face from the trillion dollars of debt that Bush’s war on terror in Afghanistan, Pakistan, and Iraq. Moyo have made a road map for the countries to break their “addiction” of aid and instead develop a growing social capital and economy. The Dead Aid proposal supports a gradual reduction in systematic aid over a period of ten years. During an appearance on Norway’s Grosvold show Moyo discusses Dead Aid and the strategies to make Africa become a more equal partner on the global stage. While debating with a Norwegian government official, Moyo mentioned that aid is providing negative incentives and fueling corruption (and other bad behavior) to take place within the African government has led to political instability, Instead provide a microfinance method in which the money will go to local entrepreneurs. She concludes that Africa will not strengthen without independence and being self-reliant, therefore the fundamental aspiration is that the African countries not be dependent on aid. Botswana and South Africa have already proved to be thriving countries its time for other countries to as well.
Video- Dambisa Moyo discusses Dead Aid with an MP
POLS306: The History and Politics of Development 
This is a very interesting take on foreign aid and development based on neoliberal principles. Moyo is a strong advocate for developing countries to tap into capital markets, FDI, micro-finance, and trade while keeping the government accountable for resource and monetary spending. I think it is very interesting also because of her educational background in very neoliberal school such as Harvard and her previous employment in the World Bank and Goldman Sachs.
But it leaves me to wonder what will actually happen after Africa liberalize and become another player in the free market? Even if Africa is able to take itself off foreign aid, will Africa still develop in the global arena or will remain as another underdeveloped countries on the same level as Chile, Brazil, etc.? How will the policies that Moyo advocates affect Africa’s later development?
The issue on Africa and its endless struggle to emerge from such deprived status has always astonished me. Dambisa Moyo has a strong point when she says that aid should be detracted and eventually eliminated from the continent. Aid is a short-term and immediate fix that African countries are using for long-term and serious issues that need more than just money to be fixed. In addition, as Dambisa mentions in the video, millions of $ in aid are being stolen by corrupted politicians (personal note – how can someone steal money that’s meant to help the country while their people are dying of horrifying ways such as hunger or diseases?) In my opinion, Africa needs to learn and enforce more SUSTAINABLE ways of feeding its people because the food that the hungry are given will only satiate them until it’s next time to eat, if that.
What allies does Africa have to liberalize itself from the gift/curse of aid? Corruption is a strong foe; however, a stronger enemy in this case, unfortunately, is culture. Aid has become part of Africa’s culture. How does someone eliminate a part of what it’s always been known as a norm to millions of people?
The stop of aid is a hard task for Moyo; yet, she seems to have somewhat of a support with the general agreements and similar views of countries such as Rwanda and Senegal. Thus, a beginning to develop her theory into something more realistic.