I first learned of Dambisa Moyo’s 2009 book Dead Aid: Why Aid is Not Working and How There Is A Better Way for Africa from two book blogs I love and admire, namely Eva’s A Striped Armchair and Amy’s Amy Reads. Since I’ve always had an interest in international relations and global economic development, naturally I wanted to know what a young, up and coming African economist had to say about the presumably sad state of Africa and what could be done to improve the continent’s sorry condition. Still curious, I happened to come across a brief article about her in an old copy of Time that I found lying around my break room at work. Then during one of my frequent library visits I happened to spot Dead Aid sitting on the shelf, just asking me to take it home to read. Well, of course I did. After slowly slogging through it over several weeks I finally managed to finish Moyo’s relatively short book. While I found it a bit on the dry side, nevertheless I found Dead Aid a fresh, bold and intelligent critique of how the West provides foreign aid to Africa and what solutions could work that best alleviate the continent’s current economic problems.
Moyo, an incredibly photogenic, Zambian-born economist with stellar credentials such as a Ph.D. in economics from Oxford and a master’s degree from Harvard, spent time at Goldman Sachs and the World Bank before writing Dead Aid. In her book, she starts with the obvious, that is to point out our current practice of doling out millions of dollars each year to Africa has done little, if anything to lift the continent’s inhabitants out of their grinding poverty. Over the years billions have been wasted by unaccountable and ruthless dictators on presidential palaces, European shopping trips, weapons and ultimately squirreled away into fat Swill bank accounts. What financial aid that doesn’t wind up in some kleptocrat’s back pocket actually ends up hurting the impoverished nation in the long run by spawning inflation, (not only driving up the cost of staples and in the process hurting the poor, but also inflating the local currency and making the country’s exports less affordable on the world market), but also lessening any incentive to reform the fractured political/economic system.
Moyo suggests a number of solutions to help improve Africa’s current plight. She starts by urging the West to place a moratorium on aid packages to the continent effective in five years. Once placed on notice it will then be the responsiblity of the individual African nations to get their respective houses in order. She also advocates a shift from aid to long-term bonds, which will raise needed capital, but will also spur the African countries to develop political/economic systems that are transparent, lawful and efficient. She is also in favor of direct foreign investment, increased trade with China, a reduction of Western tariffs on African commodities as well as the promotion of micro credit lending and overseas remittances. Of course even she admits there are downsides to her solutions, (bond ratings can plummet like bank runs in times of economic chaos, Chinese foreign direct investment potentially comes with a political price and since remittances are funds delivered to individuals usually by family members working abroad in service jobs it could be seen as a somewhat exploitive relationship, not to mention a form of welfare dependency).
Moyo has written a bold book. Her thoughts on foreign aid have helped propel her into the world’s spotlight, as she was recently interviewed by The Browser, suggesting her top five books which best address the current state of the world economy. I guess my only complaint is Dead Aid seems a bit dry and at times even a tad repetitive. While we would probably agree that foreign bond markets and the cost structure associated with African commodities tariffs doesn’t make for the most exciting reading, I think Dead Aid could have used the skilled hand of a helpful editor. But aside from that, Dead Aid is bold call to action. Therefore, it should be read.