Dead Aid by Dambisa Moyo

Nowadays, it became quite clear to just about everyone that the idea that, by providing a financial aid to the so-called ‘developing’ countries, Western nations would be able to help these countries to get out of poverty, has been deprived of the remains of its former legitimacy. This could not be otherwise, because ever since the aid-paradigm attained the status of the UN official policy, in regards to the Third World countries, there has been not even a single instance reported of the policy’s implementation having produced a positive outcome. Quite on the contrary – the more aid has been pumped into the concerned countries’ economy, the faster they grew detached from the notions of progress and development, in the first place. In its turn, this leaves only a few doubts that the assumption that aid can serve as the tool of development, is conceptually fallacious.

Therefore, there is nothing surprising about the fact that, as time goes on, more and more people become increasingly aware of the counterproductive essence of aid. Dambisa Moyo stands out as the perfect example, in this example. In her book Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, she did not only succeed in exposing the aid’s negative effects, but also in explaining the fundamental reasons, as to why the practice in question can no longer be considered appropriate. This paper aims to summarize the main idea, contained in every individual chapter of Moyo’s book, and to provide an analytically sound discussion of what can be considered this book’s foremost strengths and weaknesses.

The Myth of Aid

In this Chapter, Moyo establishes one of the main ideas that will be explored throughout the book’s entirety – namely, the fact that the full economic potential of many ‘developing’ countries in Africa has not been realized. According to the author, the main reason why it happened to be the case, is that Western countries have adopted a conceptually fallacious approach towards designing their involvement-policies, meant to be implemented in Africa. This approach is being concerned with the assumption that it is namely the fact that the governments of African countries are simply not capable of addressing the issue of poverty on their own. In its turn, this implies that it is indeed thoroughly appropriate, on the part of the West, to continue providing these governments with financial/humanitarian aid. According to Moyo, this creates the ‘vicious cycle of dependency’ – when continuing to depend on foreign aid, the policy-makers in Africa are being denied the opportunity to address the issue in the truly efficient manner – that is, by the mean of ensuring the national economies’ operational self-sustainability.

The author defines three types of aid: a) Humanitarian (ensued in response to the outcomes of natural disaster), b) Charitable (provided by the charitable organizations), c) Systematic (concerned with the process of African countries receiving monetary grants through a number of different official channels). While agreeing with the idea that the Humanitarian and Charitable types of aid do often prove circumstantially appropriate, Moyo refers to Systematic aid, as such that cannot result in anything else but in undermining the economic/social integrity of African societies from within: “It is these (Systematic) billions that have hampered, stifled and retarded Africa’s development” (9). One of the main reasons for this, is that this type of aid reflects the senders’ endowment with the euro-centric mentality – while ‘aiding’ the most impoverished countries in Africa, the Western governments never cease remaining utterly arrogant of the actual ways of how this aid is being used.

A Brief History of Aid

In this chapter, Moyo outlines the history of how the notion of ‘aid’ (in the contemporary sense of this word) came into being. According to her, it was namely the Bretton-Wood Agreement of 1944, which created the objective preconditions for the U.S. to realize itself in the position of being able to become the world’s largest ‘aid-donor’ (12). The reason for this is that, as the Agreement’s most immediate consequence, the U.S. was able to significantly increase the volume of American currency in worldwide circulation, without needing to back this currency up with the adequate amounts of gold.

Moyo specifies three most distinctive trends of how aid used to be provided to the ‘developing’ countries in Africa, throughout the 20th century’s second half. In the sixties and seventies, the bulk of this aid was meant to finance rebuilding of the social and economic infrastructure. Partially, this had to do with the fact that, during the mentioned period, the so-called ‘Cold War’ was at its peak, which resulted in both: the U.S. and Soviet Union striving to turn many African countries into their allies.

In the eighties and nineties, however, this effectively ceased to be the case – throughout this specific period, the Systematic type of aid used to be increasingly looked upon, as the tool of helping African countries to service their debts to the IMF (25). The turn of the millennium has brought about yet another previously unknown aspect to how the aid-policies are being currently enacted – namely, the fact that, as of today, the bulk of aid, sent to Africa, is expected to serve the cause of reducing poverty. Today’s aid is also being increasingly ‘commercialized’ – the author illustrates the validity of this suggestion, in regards to the fact that celebrities now play an important role, within the context of justifying the continuation of the aid-related monetary flows to Africa.

Aid Is Not Working

Throughout this specific Chapter, Moyo discusses the most important reasons why Western aid-policies proved utterly ineffective and even counter-beneficiary to the well-being of the concerned state-recipients. These reasons can be outlined as follows:

  1. Political instability – it is not only that, ever since the time when they became independent, there has been an acute lack of political stability in the majority of aid-dependent countries in Africa, but many of them never ceased to be affected by the ongoing civil war (39). This, of course, significantly hampers aid-effort, on the part of Western countries.
  2. Conceptual fallaciousness – as of today, it is being commonly assumed among many Western top-officials that, in order for them to be able to help African countries to get out of poverty, an effort must be applied into encouraging local populations to adhere to the ideals of democracy. This assumption, however, is utterly wrong, because it is specifically the continual improvement of the living standards in a particular country, which makes it possible for the concerned citizens to toy with the idea of democracy, in the first place (40).
  3. The enacted aid-policies’ focus on achieving short-term objectives. According to Moyo, much of the provided aid is being concerned with trying to help aid-recipients to take care of the most pressing social issues. What it means is that, despite being provided with aid, these countries will not be able to become even moderately prosperous. After all, it is specifically the effective functioning of the large-scaled economic projects (aimed at reaching long-term objectives), which contributes to the generation of a national wealth more than anything else does.

The Silent Killer of Growth

In this Chapter, Moyo expounds on what she believes to be one of the main contributing factors towards the sheer ineffectiveness of the currently enacted aid-strategy, on the part of Western countries – the skyrocketing rate of corruption in Africa. The latter, Moyo explains by the very specifics of how people in the Third world countries are being naturally driven to address life-challenges: “Unfortunately, unfettered money (the prospect of sizeable ill-gotten gains) is exceptionally corrosive, and misallocates talent. In an aid-dependent environment, the talented – the better-educated… become unprincipled and are drawn from productive work” (50). After having mentioned this, the author goes to explain of what causes Western countries to proceed with delivering aid to Africa – despite the aid-donors’ awareness of the above-mentioned.

According to her, this is the direct consequence of the fact that: a) Western countries cannot afford admitting that billions and billions of dollars, pumped into Africa in the form of aid, was nothing but an utter waste. b) There is no universally accepted definition, as to what can be considered the de facto measure of corruption in a particular country. What worsens the situation even further, is that even if there would not be the factor of corruption; in the first place, the Systematic type of aid would still result in establishing the objective preconditions for the functioning of the recipient-country’s economy to grow increasingly corrupted from within. This simply could not be otherwise, because as Moyo pointed out, it is in the very nature of the aid-depended economy to be negatively affected by the high rate of inflation.

A Radical Rethink of the Aid-Dependency Model

In this chapter, Moyo promotes the idea that time has come for the currently enacted aid-paradigm to be thoroughly revised. The author substantiates the validity of her idea, in this respect, by pointing out to the fact that the very assumption that aid can lead to the development is innately flawed. The reason for this is that, contrary to the provisions of political Constructivism – the dynamics in the arena of international politics continue to remain strongly Realist. That is, just as it used to be the case in the time of antiquity, the well-being of a particular country continues to remain largely dependent on the concerned government’s ability to turn neighboring countries into the objects of an economic exploitation. What it means is that the very premise that rich countries can be genuinely interested in helping their poorer counterparts, cannot be considered logically sound.

There are also a number of additional reasons, as to why ‘developing’ countries in Africa would be so much better off not receiving any aid. Among them, the author mentions the fact that eventually, there will be an end to the Western countries’ willingness to provide aid, without being able to confirm this aid’s beneficial effect. The validity of this suggestion appears self-evident – especially in light of what were the effects of the financial crisis of 2008-2009 upon the economies of the most prosperous Western countries (74). After all, a particular country can only be in the position to act as aid-donor, for as long as it is able to guarantee the well-being of its own citizens. Yet, as the realities of today’s Western living (associated with the process of a gap between the rich and poor growing ever wider) indicate, Western countries will soon need to be ‘aided’, as well. Therefore, aid-receiving states in Africa should try doing their best, in order to become less aid-dependent.

A Capital Solution

In this chapter, Moyo describes what she considers the actual key to help African countries to ensure the vitality of their economies. In essence, the author suggests that, while designing the would-be-implemented economic policies, the governmental officials in Africa should try to avoid thinking in terms of an ‘economic protectionism’. According to her, this will result in the drastic lowering of the trade-tariffs, which in turn will make it possible for African economies to enter the world’s financial market. In other words, Moyo promotes the idea that the current flow of aid-money into the economies of African aid-depended countries should be replaced with the flow of money from international bond markets: “Assessing the bond markets is not that hard” (78).

While being aware that the undertaking of the earlier mentioned measure will prove rather risky, in the economic sense of this word, Moyo comes up with the set of recommendations, as to how the severity of the potential risks could be reduced. These recommendations are as follows: a) African countries should strive to become thoroughly integrated with one another, in respect to the concerned economies’ workings. b) Investors should be provided with the legally binding obligations (backed by a third party), as to the invested assets’ full security. b) The governmental officials, in charge of designing the economic policies in African countries, should be willing to resort to the unconventional methods of revitalizing the investment-climate, such as securitizing the bonds in question.

The Chinese Are Our Friends

In this Chapter, Moyo suggests that, despite the fact that there is no an adequately functioning social-economic infrastructure in the majority of African countries, they do offer a rather extensive number of investment-opportunities – namely, due to the abundance of cheap labor. According to the author, the mentioned advantage is quite capable of eliminating the need in foreign aid, on the part of these countries. Nevertheless, because in order to be able to benefit from the low cost of labor, potential investors would be required to invest in the long-term economic projects, this naturally makes Western countries somewhat disinterested in establishing the links of a close economic cooperation with Africa. The reason for this is that due to the financial crisis of 2008-2009, the vitality of Western economies has been severely undermined. This, however, cannot be said about China – the country that continues to increase its annual GNP by 2%-3%.

Therefore, according to Moyo, the governments of African countries should have no reservations, whatsoever, against cooperating with China (104). After all, the implementation of this particular strategy by the governments in question, will naturally result in producing a powerful blow on the disproportionately high rate of unemployment in Africa – the main cause of poverty on the continent. Moyo also mentions the scope of potential threats, posed by the prospect of China becoming the main investor in Africa. According to the author, the main of them is that, as practice indicates, China is only willing to invest in the infrastructural projects abroad, for as long as it is being guaranteed to acquire no less than a half of the affiliated ownership rights. Another obstacle, on the way of China becoming actively involved in trying to help the most impoverished African countries to get out of poverty, Moyo considers the fact that the West will not tolerate the mentioned involvement. In its turn, this will have a negative effect on the economies of these countries.

Let’s Trade

In this Chapter, Moyo goes about promoting a number of the essentially neo-liberal ideas, as to what can be considered the main keys to the revitalization of the ‘developing’ country’s economy. One of them, the author believes to be the drastic reduction of the agricultural trade tariffs between countries in Africa. In Moyo’s opinion, this should result in the consolidation of the agricultural enterprises and consequently – in increasing the extent of their commercial competitiveness (115).

Another method of helping African economies to become less depended on foreign aid, Moyo considers the privatization of the state-owned factories. According to her, even though that the implementation of this measure will result in closing down many of them, the remaining ones will become much more operationally efficient, which in turn should lead to the creation of new jobs.

Moyo also suggests that time has come for the aid-depended countries in Africa to begin adopting a much more active stance in the arena of international politics. The reason for this is that, as practice indicates, in order for a particular product to make a successful entry into the targeted market-niche, the entry-process must be lobbied politically. According to Moyo, the ongoing process of Globalization is potentially capable of benefiting the most impoverished countries in Africa. The reason for this is that it naturally weakens the extent of these countries’ national sovereignty – hence, prompting them to join a variety of the locally based international trade-organizations, which in turn are likely to be transformed into the quasi-states of their own, much like the EU. Once, aid-depended African countries become fully integrated in these organizations, it will put these countries in the position of being able to defend their economic interests much more effectively.

Banking on the Unbankable

In this Chapter, Moyo explains how aid-depended African countries can take advantage of the so-called ‘Garmeen model’ of lending. This model is concerned with qualifying only one member out of the group of loan-seekers (related to each other in one way or another) for the monetary loan of a particular nominal value. Until the given loan is being fully refunded, the other group-members cannot apply for the similar ones (126). According to the author, the mentioned lending-model is fully consistent with what happened to be the economic realities in today’s Africa.

Moyo also advocates the idea that aid-receiving African countries should provide its citizens abroad with the circumstantially appropriate incentives to send money from where they happened to make it back home. If this measure is to be successfully implemented, it will instantly result in doubling if not tripling the amounts of the inbound cash flows – hence, establishing the objective preconditions for the living-standards in these countries to be improved rather rapidly (134).

Nevertheless, at the Chapter’s end, Moyo does admit that even though it looks thoroughly justified in theory, the practical implementation of the earlier mentioned economy-boosting methods may prove problematic. The author’s rationale behind this suggestion is that, as of today, the social tensions within many impoverished African countries continue to grow ever more severe. This, of course, naturally deprives these countries much of their would-be investment appeal.

Making Development Happen

In the book’s final Chapter, Moyo comes up with the plan of what should constitute the consequential phases of the process of aid-depended African countries becoming more or less economically sustainable. These phases can be outlined as follows: a) Designing a step-by-step program for the amounts of inbound aid to be progressively reduced. In this respect, the author considers the matter of a crucial importance for African countries to ensure the ever-increased amounts of foreign direct investments (FDI). b) Reducing the budget deficit.

According to Moyo, this can be achieved by the mean of eliminating the non-essential social programs and parting away with the policy of economic protectionism. d) Welcoming foreign investments into the economy’s infrastructural sectors. The implementation of this specific policy should help aid-dependent African countries to work out the conceptually sound strategy of economic development (145-148). The author concludes this Chapter by pointing out to the fact that, contrary to what many people tend to assume, there is indeed a good reason to expect the Africa’s economic future to be rather bright than dim.

There can be only a few doubts that the book Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa does represent a high discursive value. The reason for this is apparent – in this book, Moyo proved herself brave enough to spell out openly the idea that has been on the tips of people’s tongues for a long time – pumping ‘aid’ into the bottomless pit of the Third World is nothing else but a pointless waste of money.

Therefore, it does not come as a particular surprise that, ever since it was published, Moyo’s book became the subject of criticism, on the part of those who benefit personally from the current status quo with the UN’s aid-policies, presumed to be causing the African impoverished populations a great deal of good. As Biney noted in her review of Moyo’s book: “This (Moyo’s) proposition will alarm the entire international-aid architecture, including those whose jobs depend on doling aid to Africa, and for whom Africa is considered both a career and industry” (115). Nevertheless, the book in question also contains a number of the conceptual and methodological shortcomings.

For example, Moyo tends to refer to the sheer ineffectiveness of aid, as a result of the currently enacted aid-policies being ill-adjusted to the African realities. This point of view, however, cannot be considered thoroughly valid. The reason for this that the close analysis of Western aid to Africa reveals it as the instrument of a neo-colonial exploitation, on the part of aid-providers. After all, it does not represent any secret that, ever since 1971, the US currency had ceased to represent any objective value, whatsoever, while being turned into essentially the tons of a valueless green paper (nowadays, it is rather the bunch of digital zeroes in the FRS’s main computer). Yet, it is specifically this currency (the US dollar), with which the Western world pays ‘developing’ countries, in exchange for their natural and human resources.

In the similar manner, Spanish and later British colonists used to buy land from the American Natives, in exchange for glass-beads. Therefore, the Western practice of providing the Third world countries with ‘aid’, while these countries are being robbed clean by the Western transnational corporations, is a hypocrisy of the worst kind. Being strongly hypocritical, this practice cannot possibly result in the improvement of living standards among the world’s most impoverished people. Quite on the contrary – it will result in aid-recipients adopting the mentality of beggars, which are doomed to rely on others, while trying to meet the ends. This is the main reason why, as of late, the notion of ‘Western aid’ became synonymous with the notion of ‘pointlessness’, and not the fact that African countries are much too corrupted to be able to benefit from it, as Moyo implies throughout her book.

Also, while discussing the possible strategies of how African countries can become ‘aid-free’, Moyo exposed her unawareness of the fact that, as of today, the exponential pace of the ongoing technological progress provides a new meaning to the notion of ‘economic sustainability’. This explains the author’s lack of understanding that the low cost of labor in Africa could hardly be considered an economic asset. The validity of this suggestion can be easily illustrated, in regards to the fact that, as time goes on, the technologically intense manufacturing processes require the progressively reduced amounts of raw materials.

For example, whereas, as recent as 30 years ago, TV-sets used to weigh 30-40 kilograms, they nowadays rarely weigh more than 10 kilograms. In light of the above-stated, we can say that the human intellect is now capable of replacing raw materials, out of which the commercially traded products are made – in the literal sense of this word. What it means is that nowadays, the de facto value of ‘human resources’ cannot be discussed outside of one’s ability to operate with highly abstract categories, which in turn require the concerned individual’s rate of IQ to be high.

Unfortunately, as practice indicates, the majority of people in Africa can be referred to as anything, but intellectually advanced. After all, it does not represent much of a secret that the average rate of IQ among citizens of the world’s most impoverished countries in Africa, such as Nigeria, Equatorial Guinea and Ethiopia, amounts to as low as 50-60 (Lynn and Vanhanen 51). What it means is that Moyo’s idea that one of the keys to making African countries economically self-sustainable is concerned with encouraging the inflow of foreign investments, does not stand much of a ground. The reason for this is that, in the eyes of potential investors, the bulk of the currently available workforce in Africa does not represent any value, whatsoever.

Essentially the same can be said about Moyo’s formally legitimate suggestion that it is namely the skyrocketing rate of corruption in African countries, which hampers their chances to get out of poverty more than anything else does. Even though that one can hardly disagree with the author, in this respect, she clearly misses the point, while implying that the concerned state of affairs has been triggered by solely the economic factors. After all, it is specifically one’s ability to understand the meaning of the abstractly sounding terms/definitions, which makes it possible for the individual in question to be capable of exercising a rational control over its animalistic urges.

One of these urges is concerned with the intellectually underdeveloped people’s tendency to remain tribally minded, throughout the course of their lives. In its turn, this can be discussed in terms of a metaphysical ground, out of which these people’s taste for corruption actually stems. This helps us to understand why, as practice indicates, at least 80% of humanitarian aid that is being provided to ‘developing’ countries annually, ends up being stolen by the local officials, in charge of distributing it among the most socially disadvantaged citizens.

Yet, it is not only that this does not cause Western countries to reconsider the legitimacy of the policy in question, but it in fact appears to provide aid-donors with the additional incentive to proceed with it. Such a seeming illogicality, however, can be well explained once we realize that, in the geopolitical sense of this word, the term ‘aid’ is nothing but a well-sounding euphemism to the term ‘extortion’. The rationale behind this suggestion is as follows: by providing aid to the Third World countries, Westerners contribute to the maintenance of the situation when the representatives of corrupted ruling elites in these countries, are able to remain in the position of power, while continuing to lead a parasitic existence. This, however, is exactly what Western countries are interested in – by ensuring that local governments remain thoroughly corrupted, Western ‘puppeteers’ are able to ensure the continual exploitation of the ‘Black continent’ – pure and simple.

Finally, Moyo’s book does not mention the fact that the very assumption that it is fully appropriate to be sending aid to African countries is extremely euro-centric (racially biased). The reason for this is apparent. Despite the fact that, regardless of what happened to be the particulars of their ethno-cultural affiliation, all people are similar, in respect of being ‘programmed’ to seek domination, the strategies that they deploy during the course of the process, reflect the measure of the concerned individuals’ existential complexity.

Whereas, some people strive to maintain their evolutionary fitness by the mean of contributing to the ongoing technological/cultural progress, the others pursue the same agenda by the mean of making babies on an industrial scale. In the eyes of evolution, however, neither of the mentioned strategies can be deemed ‘superior’ – all that matters, is that the chosen strategy ensures the eventual survival/dominance, on the part of its practitioners. In its turn, this implies that, despite the fact that many citizens in the Third World countries do suffer from undernourishment; ‘aid’ (in the Western sense of this word) is the last thing they need.

Nevertheless, despite the fact that Moyo’s book does not contain the earlier mentioned in-depth insights into why the practice of sending aid to Africa can no longer be considered justified, it does deserve to be recommended for reading by just about anyone who strives to expand its intellectual horizons.

Works Cited

Biney, Ama. “Dead Aid: Why Aid is Not Working and How There is Another Way for Africa (Review).” Africa Today 56.1 (2009): 115-117. Print.

Lynn, Richard and Tatu Vanhanen. IQ and the Wealth of Nations. Westport: Greenwood Publishing Group, 2002. Print.

Moyo, Dambisa. Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. New York: Farrar, Straus and Giroux, 2010. Print.

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