Stop the Aid!

In an interview with Der Spiegel, Kenyan economist James Shikwati gives another tragically hip raspberry to Live 8. A sample:

SPIEGEL: Following World War II, Germany only managed to get back on its feet because the Americans poured money into the country through the Marshall Plan. Wouldn't that qualify as successful development aid?

Shikwati: In Germany's case, only the destroyed infrastructure had to be repaired. Despite the economic crisis of the Weimar Republic, Germany was a highly- industrialized country before the war. The damages created by the tsunami in Thailand can also be fixed with a little money and some reconstruction aid. Africa, however, must take the first steps into modernity on its own. There must be a change in mentality. We have to stop perceiving ourselves as beggars. These days, Africans only perceive themselves as victims. On the other hand, no one can really picture an African as a businessman. In order to change the current situation, it would be helpful if the aid organizations were to pull out.

SPIEGEL: If they did that, many jobs would be immediately lost …

Shikwati: … jobs that were created artificially in the first place and that distort reality. Jobs with foreign aid organizations are, of course, quite popular, and they can be very selective in choosing the best people. When an aid organization needs a driver, dozens apply for the job. And because it's unacceptable that the aid worker's chauffeur only speaks his own tribal language, an applicant is needed who also speaks English fluently -- and, ideally, one who is also well mannered. So you end up with some African biochemist driving an aid worker around, distributing European food, and forcing local farmers out of their jobs. That's just crazy!

SPIEGEL: The German government takes pride in precisely monitoring the recipients of its funds.

Shikwati: And what's the result? A disaster. The German government threw money right at Rwanda's president Paul Kagame. This is a man who has the deaths of a million people on his conscience -- people that his army killed in the neighboring country of Congo.

Whole interview here. More detail here. Thanks to reader Mark Bonacquisti.

Shikwati, director of Kenya's Inter-Region Economic Network is an interesting character. It's inevitable that an eloquently pro-market citizen of a sub-Saharan country will be adopted by western free traders and condemned by western leftists. And sure enough, if you poke around online you'll find that Shikwati is using classical liberal ideas to enable and encourage the development of Kenya, East Africa and Africa in general. Or else he's a shill for various right-wing NGOs run by "whites." He's also on the cutting edge of a wave of change. Then again, he's a ruthless elephant-basher.

Whichever side you come down on, the tart comments above are no fluke. Shikwati can be counted on for strongly worded arguments that, ironically, are pretty close to the more market-oriented approach the Live 8 organizers claimed to be promoting. It's certainly some sign of progress when all sides seem to agree that trade rather than relief is the solution to Africa's troubles—however much they differ on what "trade" really means.

Comments

[glory]

fareed zakaria: You know, people who talk about the need for a Marshall Plan for Africa should remember Africa has received the equivalent of five Marshall Plans in the last 40 years. The question is not entirely one of resources; the question is, how do you disperse them, how do you spend them, how do you make it effective?

martin wolf: Aid is well worth trying

China Invests in Developing Africa (Real Audio): As part of China's global economic policy, the country is now investing heavily in African nations like Sierra Leone and Sudan, ahead of Europe and the U.S. when it comes to investment in the developing continent.

[rst]

I think one big aspect of the problem is that those with the "devastating urge to do good" (that was well put I think) equate aid with investment. They'll send piles of clothes to people who have no need for clothes and piles of money that does little more than devalue what they already have. Ultimately, Africa's success is contingent on foreign private investments. This means other people will also get rich, and presumably many of them will be white. People, especially white people, getting rich off of Africa on any palpable scale will be characterized as evil, regardless of how successful that would also make Africa in the long run.

The continent is doomed to subsistence and irrelevance, and the irony will be delicious...they'll blame it on a lack of aid.

[R C Dean]

I suspect that what China is "investing" in is crony capitalist joint ventures with the local kleptocrats. Birds of a feather, etc.

If so, its investments will do little to develop the economy, and much to entrench the psychopaths that are Africa's real problem.

[glory]

you're probably right about "crony capitalism," as the ITN report highlights, but wrong, i think, about doing little to develop the economy 😀

Staking a Claim
China Flexes Economic Muscle
Throughout Burgeoning Africa
By KARBY LEGGETT
Staff Reporter of THE WALL STREET JOURNAL

When this east African country went to war against neighboring Eritrea in the late 1990s, the U.S. responded by evacuating its Peace Corps volunteers, scaling back military aid and issuing a security warning to U.S. citizens and companies.

The Chinese government had a different reaction. Beijing saw the war -- and the reduced U.S. presence -- as an opportunity to expand its influence. It dispatched even more diplomats, engineers, businessmen and teachers to Ethiopia. New aid grants soon rolled in, followed by bank credits for Chinese companies operating there.

Today, China's influence in Ethiopia is overwhelming. Its embassy is among the largest in the country and hosts more high-level visits than any Western mission. Chinese companies have become a dominant force, building highways and bridges, power stations, mobile-phone networks, schools and pharmaceutical plants. More recently, they have begun exploring for oil and building at least one Ethiopian military installation...

cheers!

[drf]

cato.org

they have a buncha stuff on this today...

[Thomas Paine's Goiter]

I suspect that China may make more of these moves throughout Africa for the purpose of natural resource procurement:

http://news.bbc.co.uk/2/hi/americas/4034149.stm

Cuba is giving up bauxite rights for the cash influx.

[Abiola Lapite]

The real shocker here is that what Shikwati's saying should be news to the ears of Western observers. Africans have been saying such things for a great many years - I've been pointing out precisely this on my own blog for at least 2 years myself - but until now nobody's actually thought to bother paying attention to what they themselves had to say about their situation.

[joe]

Stevo,

Some multinationals do exploit their, or their contractors', workers in developing nations. It's just as dumb to assume that Nike HAS to be responsible and decent in their overseas business practices, just because they're paying wages in poor areas, than to assume they HAVE to be sleazy and exploitative, just because they located a plant in a country with low wages.

If a dollar an hour is a decent wage in Indonesia, I don't have any problem with paying a dollar an hour. What I do have a problem with is paying 68 cents and hour, locking the fire doors, and having goons beat the shit out of employees who try to organize.

[isildur]

Joe,

The burden of proof is always on the extraordinary claim. So, in the best tradition of blogs everywhere, in response to 'locking fire doors', I say: Link please?

[Dave W.]

Joe:

I am with you on this.

If Nike wants to make a case that it treats its workers okay, all things considered, then it can try to do that the way Nokia apparently did in that movie. Then we can have the kind of discussion spurred by the Nokia movie and decide if the contractors are too nice, too mean or just right.

However, this does not seem to be Nike's approach. Since they are choosing not making their case, I assume it is because they are not real confident about their position. They want us not to draw adverse inferences from their silence, but I am going to keep drawing the inferences uau (unless and until) they get confident enough in their fairness to let those cameras roll.

[Dave W.]

Further thought:

maybe there is a good approach lurking here to the thorny issue of international labor standards.

Specifically, we can (continue to) allow the far east contractors to freely set the terms of labor for manufacturing exported goods, providing that they put lots and lots of video of their factories on the internet, and force these factories to give generous and full factory access to journalists who want to disclose conditions to (USian) consumers on an ongoing basis.

In other words, do what you want, but understand that it will not be secret.

[Dave W.]

That way, when someone wants a link to the story about fire doors, there will be many to choose from. Unlike the present sitch, where factory disasters may or may not make it into the universe of information that folks like me and Joe can access.

[joe]

isuldur,

Do your own research.

Also, that type of safety violation in a country just beginning to see widespread industrial development is far from "extraordinary." Didn't you ever learn about the Triangle Shirtwaise Company?

[drf]

Joe:

"Do your own research".

Truely in the spirit of our dearly lurking friend, GG (potentially rst???)
(grin)

cheers,
drf

[Jim Walsh]

The solution to the Africa problem is simple: we need more songs by Sting...