Africa: Development Aid: Zambian economist blasts long-term practices that don't develop countries to meet their own needs

"Aiding and Abetting," by ASH Smith in a web exclusive interview with Dambisa Moya, Zambian economist (Jul 2k9 Prospect, UK)

According to Dambisa Moyo, the policy of foreign aid to Africa constitutes “the single worst decision of modern developmental politics.” Since the establishment of the Bretton Woods institutions in the 1940s, approximately $1 trillion has been thrown at the problem of African development, during which time the continent as a whole has failed to progress. In the last 30 years, the worst economies have actually shrunk, and even as the torrent of aid reached its high-water mark the poverty rate was increasing six-fold.

Moyo, a former World Bank consultant and Goldman Sachs employee, made her argument in “Dead Aid” (Allen Lane), published earlier this year to considerable attention ( Prospect's review is here). Far from bolstering African economies, she claimed, aid money has made matters worse. It has stunted economic growth, encouraged graft, and removed entrepreneurial incentives at both state and personal levels. And, almost from the outset, the servicing of old debts has demanded the acquisition of newer, bigger ones.

Moyo’s solution was stark. In five years, all aid to Africa must stop. In its place, African nations will need to implement new economic policies including micro-loans, improved remittances and formalised domestic savings schemes, as well as, internationally, improving foreign direct investment, borrowing responsibly and securing more equitable trading arrangements with the west.

-- EconoMix