Moyo and Why Aid is Not Working

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Born in Zambia, Moyo graduated from American University, Harvard and Oxford University where she obtained a PhD in Economics. Many of her views expressed in “Dead Aid” and TED talks were unfamiliar to me. In her book, she goes as far as to imply that money given as aid is causing poverty rather than helping.

I had heard this argument used on a much smaller scale, in an article in Foreign Affairs and the Pulitzer Prize winning book, “A Problem from Hell,” the author went into detail about how aid and journalistic coverage wrongfully portrayed the 1994 Rwanda genocide and made the situation must worse because of that misrepresentation.

Moyo seems to be going much further by stating that it is causing entire countries to become dependent and corrupt. Instead of providing traditional aid, Moyo proposes sources of funding that will not foster dependency and corruption.

Moyo giving a TED talk in June of 2013

The Washington Consensus is 10 policies by Washington-based institutions that is believed to be the initial steps needed to spur economic growth. According to the Washington Consensus, in order for countries to join the international economy successfully, they must adopt the following framework:

“Fiscal discipline – strict criteria for limiting budget deficits, Public expenditure priorities – moving them away from subsidies and administration towards previously neglected fields with high economic returns, Tax reform – broadening the tax base and cutting marginal tax rates, Financial liberalization – interest rates should ideally be market-determined, Exchange rates – should be managed to induce rapid growth in non-traditional exports, Trade liberalization, Increasing foreign direct investment (FDI) – by reducing barriers, Privatization – state enterprises should be privatized, Deregulation – abolition of regulations that impede the entry of new firms or restrict competition (except in the areas of safety, environment and finance), Secure intellectual property rights (IPR) – without excessive costs and available to the informal sector and a reduced role for the state.”

Just as Moyo’s views on Aid has come under criticism, so has the Washington Consensus. Both the World Bank and the International Monetary Fund follow framework similar to the Washington Consensus.

“My voice can’t compete with an electric guitar.”

On page 27 of Dead Aid, Moyo says, “My voice can’t compete with an electric guitar.” In this reference, she is criticizing celebrities and other known figures who give aid while they are visiting or fund governments that do not appropriately manage it. She says they are not doing any good for countries and only worsening the problem. She goes on to say that when they leave, they do not have to live in the same circumstances and are returning to economic stability.

While there are so many examples of this, her words made me think of Shakira’s “Waka Waka” song:

I thought of this song specifically because it was highly controversial. 

Most of the criticisms were because they chose a non-African to feature the World Cup song. This argument is certainly with merit. However, I would say what Moyo is specifically referring to has nothing to do with celebrities because it is a problem that even federal governments form within a country face: seperation. If you are too separate from a community and do not have the context behind an issue as well as a heavy and personal stake in its future, you will not produce the most effective response to the problem.

For example, if a federal government plans a big overhaul policy such as requiring all students go to school in certain developing countries but then not follow up with the investment to fix the infrastructure, develop teaching requirements, sustain funding, etc, you end up with overcrowded classrooms, too little supplies and an overall diminished quality of learning for the students who were previously attending.

Overall, I understand her argument but would offer the counter argument with all the times that celebrity endorsements have been successful. I find them especially useful at places like the United Nations. I thought Leonardo DiCaprio was an odd choice for speaking on climate change at the U.N. before seeing the statistics on the amount of people who tuned in as a result. Around the same time, UN Women announced Emmy Watson’s new position as a Goodwill Ambassador. Suddenly, people that had never heard of UNHCR were hearing of it. The news went absolutely viral, raising awareness about the organization and promoting it. Other peace ambassadors I like: George Clooney (recently resigned because of time commitments but held the role for many years) and Angelina Jolie. They choose people who are beloved by the public as well as smart and will represent them well.

As far as the likelihood of her suggestions working in Malawi or Congo, I see it being much less likely that Congo can adopt new reforms as well as other countries. Their government is much more corrupt than the other countries I’ve studied, which would hamper any reform or funding changes.

Sources:

http://www.dambisamoyo.com/

http://blog.ted.com/2009/04/09/ayittey_on_dead_aid/  

http://www.ted.com/talks/dambisa_moyo_is_china_the_new_idol_for_emerging_economies.html

http://mobile.nation.co.ke/lifestyle/George-Clooney-steps-down-as-UN-goodwill-ambassador/-/1950774/2298970/-/format/xhtml/-/rqf875/-/index.html

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