Wednesday, September 09, 2009

Dambisa Moyo – Canada2020 Speaker

Last evening I had the privilege to attend a talk by Dambisa Moyo who is promoting her book Dead Aid. I say privilege because it was free and even though I disagreed with her perspective of the issue, I realize that if I lived in a smaller city it would be unlikely I would get the chance to hear such speakers (and ask them a question).

I hadn’t read her book but I have read articles, seen her interviewed, and heard her in debates on TVO and CBC. I thought her framing of the problem was incautious at best – that aid is simply bad, enables bad behaviours and that it should be reduced or cut-off as soon as possible. I was going into the talk with a very critical mindset and had the belief that the primary reason her book was so successful was that she was an African speaking against aid to Africa. While I don’t want to engage in a protracted debate about identity, she is not your typical African; in fact, not your typical person. Anyone who has a PhD from Oxford, a masters from Harvard and has worked at the World Bank is in the upper echelons of the elite. I do not say that to deride, but just to provide some background. I was also thinking something like, “Even with all the turmoil of the collapse of the global finance system, economists and financiers will still push their same old ideas,”
Regardless, speaking at the Chateau Laurier, Ms. Moyo happily provided greater detail regarding her argument which made me more sympathetic to it. First, she is not against humanitarian aid. Second, although there are problems with it, she is not against NGO aid (your Oxfams et al.). She criticized the media as taking things out of context, but she could have done a better job describing these aspects of her stance in other instances. Her primary issue, it seems, is with the larger scale development aid from countries, the UN or the international financial institutions. And here is where we reach the limitations of my knowledge base. I know that the conditions for development aid two decades ago known as the structural adjustment policies had devastating consequences on most recipient countries and the idea of privatizing services is something developed countries like to demand of developing countries (even though they don’t do it themselves), but I don’t know enough about details of world/bond markets and foreign direct investment to judge their validity.
Moyo discussed corruption and how many of Africa’s leaders have failed their people.
Whenever I hear of corruption being ‘the’ problem I think of Jeffery Sachs’ The End of Poverty where he detailed how corruption, though bad, is not a necessary condition preventing development. Additionally, I have started to think of lobbying in developed countries as “formalized corruption” and though there are differences between that and overt theft of funds, they are differences in degree, not kind.

Part of the time it sounded like Moyo thought aid should just be reformed and other times that it should be done away with entirely. I think it comes down to her belief in the idea that if someone is giving aid without a fixed end date/time, then the aid removes their incentive for development (personal and economic). This is a reasonable idea as self-determination is where things will ultimately rest. Throughout the talk, I would keep getting a bit confused as to how her argument works in detail (yes, yes, I guess I should read the book) as I think about people with a lack of food or medicines for HIV or the pervasiveness of malaria and how in some way these issues are humanitarian, but in others, these issues are exactly those that large donors are trying to help. Perhaps her chief concern is giving particular countries (i.e., sketchy Presidents) large amounts of money without enough accountability.
Before this post gets far too long, I’ll just describe the question I asked her and her response.
After she finished her talk, she was to be interviewed on the stage. It was said that the interviewer would start and then he would alternate with audience members who had questions, so listeners were invited to go to the microphone in the middle of the aisle. Having been to several talks, I know that if you don’t go early, you might not get a chance, so I soon went up near the microphone, ahead of anyone else. This was fine for the first little bit, but when a couple minutes turned into 5 and 5 minutes turned into 10, I felt kind of odd standing their in the middle of the room. (Oh, cognitive-emotional states are interesting). I took the time to sketch out what I was going to say and then, in a panic at minute 6 or 7, I realized the interview might ask my question so I better think of something else (I don’t think I really did). When the time came, I said something like, “Thank you for your presentation on this complex topic. You have obviously listed the various problems with aid, and indeed there are problems, but I was hoping you could comment on the positive side of aid and how it relates to larger growth. More specifically, Paul Collier, in his book The Bottom Billion, stated that foreign aid has contributed 1% to Africa’s GDP, which might not sound like a lot, but without it African GDP would be about zero. As we know that economists love their GDP growth rates, I was wondering if you could address that.”
Happy to get that out in a mostly coherent manner I then stood and listened to her response, restraining myself from following up. Moyo said (1) that even if aid had contributed 1% of GDP, a 7% GDP growth rate would be necessary. So even “giving me that” would not be sufficient; and (2) that she found it hard to see how it could have actually done so when it would be more likely that things such as foreign direct investment or (can’t remember specifics but other financial options) would be responsible for GDP growth.
I thought it would be rude to monopolize the mic so I didn’t follow up, but I wanted to say: (1) “It sounds like you just said ‘something isn’t better than nothing’ and why would it be that just because you can’t get 7%, getting 1% is bad (or not worth some recognition). The 1% GDP growth seems to a large positive aspect to aid. Your response contradicts the point you made earlier in the talk when you quoted your Sudanese friend who said he is fine with China investing in his country if his terrible life becomes a little less terrible; and (2) “So, just to be clear, you disagree with what Collier wrote?” If she agreed to this second point, then it is a debate among the economists and statisticians who know more than I. (Collier was her thesis advisor at Oxford.)

There were three other questions (and 2 people left to sit back down when they realized they wouldn’t get a chance to ask theirs). The guy following me started off shaky but made a good point about Mugabe and how he is still in power despite not receiving aid. Moyo said that he received 300 million from the US and the UK as late as 2006. I thought that since it was 3 years ago perhaps that isn’t the best rebuttal.

As for other general points, I thought Moyo could have addressed the fallout of colonization more (or at all). Additionally, I couldn’t help but wonder who keeps supplying all the guns, either directly or indirectly, that are used in the various wars across the continent and the specifics of that supply chain.

Overall, it was a useful talk by someone with whom I disagree; and as she isn’t against humanitarian or NGO aid, I can at least see her as sane (yet corrupted by an ‘economic’ mindset ;)

Update: Moyo's presentation is available online (I ask my question at about 42.45)


Blogger awoieht said...

Hey Darren,

Just wanted to say I read Bottom Billion just last term, and that this post was great in adding more to my understanding of foreign aid. Have you heard of I loaned for the first time a week ago.

Hope things in Ottawa are going well for you!


11:45 AM  

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