Is Aid Working?

Wednesday, May 27, 2009

It is hard to argue with the lofty ambition to end once and for all the scourge that is global poverty. How the world should go about this, however, is much more vexed. If poor countries do not have sufficient capital, aid advocates argue that there is a moral imperative for rich ones to help. Since 1970 hundreds of billions of dollars in bilateral and multilateral aid has been sent to Africa from the developed world. G20 leaders agreed at last month’s summit London that an extra $50bn would be needed to see the poorest continent through the global economic crisis.

The problem, argues Dambisa Moyo, a Zambian economist who has stolen the global limelight with her recently published book, Dead Aid, is that all this “money for nothing” is having the opposite of the desired effect. Not only has aid failed to lift Africans out of poverty – average incomes across much of the continent have stagnated or fallen in the past forty years. It has also become the main obstacle to development. Aid fosters dependency, stifles enterprise and encourages corruption. It is time to turn off the taps.

Source: Financial Times (link opens in a new window)

Agriculture, Investing