Tuesday, March 24, 2009

Why Foreign Aid Is Hurting Africa

Above, a picture of Dambisa Moyo; below, Moyo's latest book on the subject. photo credit

In saturday's WSJ, there was a brilliant article on what aid is doing to Africa. Its written by Dambisa Moyo, a former economic consultant for (the investment bank formerly known as) Goldman Sachs. Here's a bit:

Giving alms to Africa remains one of the biggest ideas of our time -- millions march for it, governments are judged by it, celebrities proselytize the need for it. Calls for more aid to Africa are growing louder, with advocates pushing for doubling the roughly $50 billion of international assistance that already goes to Africa each year.

Yet evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher-quality investment. It's increased the risk of civil conflict and unrest (the fact that over 60% of sub-Saharan Africa's population is under the age of 24 with few economic prospects is a cause for worry). Aid is an unmitigated political, economic and humanitarian disaster.[...]

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