Monday, June 16, 2008

Aid To Africa

The Bloke was invited onto another BBC World Service prog today, this time to discuss aid to Africa. Once again, his role was to be the white middle-class bloke complaining about the cost to taxpayers.

In case you missed it, an international panel of the great and the... er... "good" - everyone from Kofi Annan to T Bliar - has just issued a report calling for aid to Africa to be increased drastically. The Africa Progress Panel says western taxpayers are falling way behind on the solemn pledge made at the 2005 Gleneagles grandstanding fest to double African aid by 2010.

Their remedy is to impose new ringfenced taxes - 'Possible sources include currency transaction taxes, global environmental taxes such as carbon taxes, taxes on international air travel and freight transport, and a global lottery'.

Yeah. Right.

Enter the Bloke.

A bit of factual background:

  • Since African countries started gaining independence some half century ago, Western taxpayers have pumped in a lot of aid - estimates vary from $600bn to $1 trillion (cf say, the Apollo moon programme which cost a mere $25bn all-in)
  • The UK currently spends £1.25bn pa in direct aid to Africa, and at least the same again in debt write-offs
  • African growth overall has been very disappointing and many countries remain economic basket cases: according to the World Bank, getting on for half of the countries still have per capita GDP below $1,000 pa
  • The good news is that growth has picked up in recent years (hurrah!) - the IMF overview chart for sub-Saharan Africa is shown above
  • But growth is still patchy: oil exporters have naturally done best, with average per capita growth rates over the last five years of 5% pa +; whereas in the quarter of countries the IMF rates as "fragile", per capita GDP growth has been less than 0.5% pa.

The programme was a phone-in with a few studio guests, albeit said guests were sprayed around in soundproof booths all over the place, from Guildford to Nairobi (see PS). And with the listener calls coming largely from Africa, the Bloke confidently expected to be in a minority of one in opposing increased aid. But that's not how it turned out - not by a long chalk. In fact the calls were a revelation.

To start with, the guest from Nairobi - an African with a business mag called African Executive - stopped the show by calling for all development aid to be ended forthwith: only humanitarian aid (disaster relief) should remain. He reckoned Africans are held back by cheque book dictatorship from the West. Left to themselves they would quite rapidly develop their own entrepreneurial skills and businesses, raising their own capital in the process.

Wow! In that world, we could save 90% of our aid budget, since only 10% of it is humanitarian aid.

Then Mohammed called from Liberia - one of the very poorest African countries, with a per capita GDP of just $500 pa- to say virtually the same thing. Aid is deeply corrosive because it makes people lazy and helpless. India and China are growing because they've helped themselves.

Other callers said that aid is pretty useless anyway, since, as currently structured it just ends up with corrupt local politicians (it's estimated in some quarters that 25% of African GDP is swallowed up in corruption of one kind or another).

What came through loud and clear was a burning desire for Africa to make its own way - not to be held in thrall to the global aid industry (except for one guy who phoned to suggest the West send out a bunch of people who understand how to run countries so they could take over from the hopeless natives for a time... er... didn't that used to be called the Empire?)

So, far from the Bloke being on the coconut shy, it was actually the man from the global aid industry - Max Lawson of Oxfam - who was on the back foot, who had to defend his business.

He smoothly ran through the gamut - yes, everyone accepts huge mistakes have been made in the past - corruption, bonkers projects, etc etc - but obviously we're so much better now... aid is not an alternative to self-help - it's not an either or... today's well directed programmes are making a huge impact... aid can produce economic growth - it was Japanese aid that gave China its economic boom...

What?! Japanese aid was responsible for the Chinese miracle? I don't think so. Let's just run the numbers... in the last thirty years, Japan has lent China $33bn, an average of about $1bn pa... the Chinese economy is $5,330 bn... so $1bn pa equals a capital injection of 0.02%... hmmm... even 30 years ago, the injection was trivial. Anyway, the rest of us thought it was China's economic reforms that did the trick, just like happened in India. But of course, that doesn't fit The Aid Model.


The more I find out about tax-funded international aid, the more I think it is primarily a means of keeping the aid industry in business. Of course we should have some tax-funded aid for emergency humanitarian relief, and perhaps disease treatment. But so far, I haven't heard anything to convince me the other 90% of our aid budget isn't a gigantic waste of money. When even people in poor recipient countries say development aid is harmful, something is seriously wrong.

Good luck to genuine private charity a la Bill Gates - he's not only raising the money, he's also personally directing its proper use. But tax-funded government aid is entirely different. It suffers from all the usual big government problems, and it's quite possibly holding back the world's poor from helping themselves. It's welfare dependency on a truly tragic scale.

PS Personally, the Bloke found this phone-in a bit of a shambles. He'd expected to be asked a few questions by the anchor, then there'd be callers, then there'd be some more questions - you know, just like Victoria does it on the R5 phone-in. In fact, for most of the prog, the anchor seemed entirely unaware he was still sitting in the BBC Guildford booth, and being a polite sort of chap he hesitated to butt in. Clearly, that wasn't right, and the lesson for next time is butt away. Not sure that's a great way to have a proper discussion.

PPS On arrival at the studio, the Bloke was greeted by a charming lady who settled him into the booth and got him a cup of tea. Excellent. She also asked if he'd mind letting himself out after the prog, so she could cut off home? Fine, he said, but what if there was a technical problem of some kind? She pointed to a cheery chap sitting at a desk outside and said he'd be staying on. Fine. Except later, that chap also disappeared. During the programme another lady did briefly come to smile through the soundproof glass into the booth. But that was it. And when the prog was finally over, the Bloke discovered he'd apparently been left entirely alone in the studios. Alone? Had everyone gone home? He walked down the corridor to the gents. Nope, nobody in sight. Was this normal? What if he barricaded the door, twiddled the big knob, and broadcast to the nation: "This is an important announcement from the provisional government in Guildford. Surrey has today broken away from the United Kingdom to form an independent state. All international agreements entered into by the British government are hereby declared subject to renegotiation...." He was later contacted by the BBC and assured he'd been wrong. The studios had not been deserted, and indeed he'd smiled and nodded to a member of staff on his departure. He has absolutely no recollection of that and wonders why he wouldn't have noticed it. Especially since he was specifically looking round for signs of life. Maybe it's that Alzheimer's thing. Very worrying.


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