Why Africa Is Still Poor
New York University professor and author of The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good, William Easterly has a thought-provoking op/ed about who needs to save Africa in today's Washington Post. Over the past 50 years the rich countries have thrown more than $2.3 trillion in development aid at the world's poor countries and most of them are still poor–why?
Easterly is surely correct when he asserts:
Economic development in Africa will depend—as it has elsewhere and throughout the history of the modern world—on the success of private-sector entrepreneurs, social entrepreneurs and African political reformers. It will not depend on the activities of patronizing, bureaucratic, unaccountable and poorly informed outsiders.
Development everywhere is homegrown. As G-8 ministers and rock stars fussed about a few billion dollars here or there for African governments, the citizens of India and China (where foreign aid is a microscopic share of income) were busy increasing their own incomes by $715 billion in 2005.
Easterly's point is increasingly obvious, but his solution that local people and entrepreneurs be encouraged by aid groups seems a bit naive. He even cites the case of Kenyan Robert Keter who created the successful telecom company CDR which offered consumers voice over internet service. As Easterly notes, CDR "ran profitably until the Kenyan government shut him down for no apparent reason."
That's the problem of African poverty in a nutshell. Anyone who creates a little bit of wealth risks having it seized at any time by kleptocratic governments. Until that dynamic is somehow stopped, tens of millions of Africans are condemned to unending abject poverty.