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Features

‘Dead Aid’: A critical reading

Samir Amin

2010-02-18, Issue 470

http://pambazuka.org/en/category/features/62386

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cc J Harneis
Dambisa Moyo's 'Dead Aid' fails in its attempt to provide a radical critique of ‘aid’, because of Moyo's unwilingess to conduct it within the framework of political economy, says Samir Amin. ‘The politics of aid, the choice of its beneficiaries, the forms of intervention and its immediate objectives are inextricably linked to geopolitical considerations’, says Samir Amin, yet Moyo does not speak to or critique ‘the central role of aid in the strategy of domination, pillage and exploitation by imperialist capital. Neither does she address the need for a “different aid” based on the solidarity of peoples.’

Dambisa Moyo was no doubt an excellent student. Unfortunately, she is a product of the conventional economics curriculum, which is great if one is to embark on a career at the World Bank, or Goldman Sachs. She attempts a radical critique of ‘aid’ but sadly she is not up to the task, her noble intentions notwithstanding.

Dead Aid’ is written in the same style as World Bank ‘reports’ and is extremely boring. Moyo seems to be speaking only to her ‘peers’ (at the World Bank, or Goldman Sachs). She lends a lot of credence to a long list of ‘experts’ from the bank (Jared Diamond, Paul Collier, Dani Rodrik, Przeworski, Bill Easterly, Clemens, Hadji Michael, Reichel, Djankov, Romalho, Burnside, Dollar, Mancur Olson etc) whose works are by and large inconsequential (lacking comprehension of the real world) and at times even ridiculous. They are all very good at developing 'models’ whose conclusions are as senseless as their original premise. She only seems to be familiar with a few blinkered development theorists, like David Landes, whose ‘revelations’ are at best trivial (he concludes, for example, that ‘aid’ tends to benefit a small elite minority). The key question – still unanswered – remains: What strategic political aim does this aid serve?

A critique of aid can only be conducted within the framework of political economy. Moyo clearly abhors this framework, which she considers to be ‘ideological’, and thus ‘non-scientific’. She seems to miss the fact that the issue is about ‘capitalist markets’ (based on the valorisation of capital), and not ‘markets’ per se. She also seems to believe firmly in ideological flights of fancy in which capital-driven growth benefits everybody (what is good for Goldman Sachs is good for everyone).

Her so-called ‘apolitical’ stance is incredibly naive. One of many examples is her reference to Lumumba as a ‘communist leader’ (p. 44 in the French edition). This may be believable, but only to the average television-dulled citizen of the US. An African with even the most fleeting interest in the history of liberation struggles on the continent would balk at this.

With regard to the economic success of ‘emerging powers’ – China in particular – Moyo adopts the World Bank ideology that this is purely as a result of ‘opening up’ (to foreign capital and markets). She does not realise that China’s current success is a product of the radical Maoist revolution that it went through. She cannot understand that China’s refusal to accept the commodification of land as a necessity (page 216, French edition) – a view that she and every other liberal economist who ignores history has adopted – is the very basis of its success. Historically, European capitalism was based on private ownership of agricultural land, and the dispossession of peasants thereof. This process was aided by the massive waves of migration to the Americas. The people of Asia and Africa could not possibly emulate this migration unless they had access to five Americas to absorb their rural populations. At most, this ‘classic’ capitalist approach could succeed in creating a Lumpenproletariat, inhabiting a world of slums. Did this at any point cross Moyo’s mind? One could come up with many other examples of her ignorance and lack of judgement in this book.

Moyo encourages African countries to further ‘open up’ to international capital – as if they were not already extremely exposed to this (China, on the other hand, exercises more stringent financial controls than any African country). She has considerable faith in the external indebtedness caused by the transfer of state obligations to global financial markets. She also seems to believe in credit rating agencies, all of which are linked to global financial oligarchies. Moyo ignores the fact that within the historical capitalist context, external debt has always been a form of pillage (‘of primitive accumulation’), as any historian of the Ottoman Empire or Latin America would tell you. She does admit, with worrying naiveté, that the debt repayment rates imposed on countries of the South are much higher than those of the dominant countries of North! But even this realisation still does not lead to explore questions of political economy and external debt.

Moyo rails at protectionism by Northern countries, which poses a major obstacle to Africa’s agricultural exports. But she does not question the validity of the defunct theory of ‘comparative advantage’.

In her historical analysis of aid, Moyo does not manage to go beyond the oft-repeated descriptive view of it as a succession of ‘types’: Aid for ‘industrialisation’ (1960s), followed by aid for ‘poverty eradication’ (1970s), then aid contingent upon ‘structural adjustment’ (1980s), and finally aid based on ‘good governance and democratisation’ (since 1990). She does not interrogate the link between this evolution of aid, and the strategic response by imperialist capital to the needs of the time. It is only by exploring this issue of political economy that one understands the perpetuation of aid, and Moyo is unable to do this.

For the 1960s (aid for ‘industrialisation’), she only gives one example: The Kariba dam on the Zambezi river, which we know was built to provide energy to South Africa and Rhodesia, and not to industrialise Zambia (her own country). Let us consider the discourse on good governance, and the condemnation of corruption, which only serves to obfuscate the real issue: The social nature of power (I do not wish to revisit my previous writings on this subject). Once again, Moyo admits that there were considerable gains in the South despite an absence of democracy (here, Moyo cannot conceive of any other possible model than the western blueprint consisting of Multi-partyism and elections) and not because of this (p. 59 of the French edition).

There is nothing in this book that speaks to, or critiques the central role of aid in the strategy of domination, pillage and exploitation by imperialist capital. Neither does she address the need for a ‘different aid’ based on the solidarity of peoples.

Moyo offers a puerile explanation for the intransience of aid: The intense lobbying by those who benefit from it – tens of thousands employed by the World Bank, aid agencies, NGOs etc. She does not consider that this lobby would not be as influential if the aid was not serving the needs of dominant capitalist interests.

To find a true critique of aid, one would need to look elsewhere other than this poor work by Moyo. In this regard, I would recommend the cited work of Yash Tandon.



My critique of aid as it is currently practised is based on my analysis of how it is used by the oligopolies that control globalisation, and that it is also the cause of Africa’s exclusion and marginalisation. This exclusion is therefore in some way built into aid.

The politics of aid, the choice of its beneficiaries, the forms of intervention and its immediate objectives are inextricably linked to geopolitical considerations. Each region of the globe performs a unique role in the globalised liberal system. It is therefore not enough to simply focus on what these regions have in common (deregulation of exchange rates, privatisation and free movement of finances).

Sub-Saharan Africa has been fully integrated into this global system, and is in no way ‘marginalised’, as the perception goes: Foreign trade accounts for 45 per cent of the region’s GDP, compared to 30 per cent for Asia and Latin America. Quantitatively speaking, Africa is therefore more integrated, albeit in a different way.

The Geo-economics of the region are underpinned by two key types of product that define its positioning in the global system:

(i) ‘Tropical’ agricultural exports: Coffee, cocoa, cotton, groundnuts, fruit, palm-oil, etc
(ii) Fossil fuels and minerals: Copper, gold, rare metals, diamonds, etc

The first type offers a means of basic ‘survival’ for the local economy, beyond that which is used for subsistence. These exports help finance the state’s public expenditure, and the growth of the middle classes. This category is important to the local ruling class, but not to the dominant global powers. The second group of natural resources, on the other hand, attract a lot more global interest. Today, it is fossil fuels and rare metals. In the future, the continent will be important for the development of agro-fuels, solar energy (when technology enables long-distance transportation thereof) and hydro-energy (again when it can eventually be exported directly or indirectly).

Already we are seeing a beeline towards rural lands earmarked for agri-business. On this account, Africa offers unlimited possibilities. Madagascar is leading the way, having ceded vast areas in the west of the country. Congo’s new rural code of 2008 was the brainchild of the Belgian government and the Food and Agriculture Organization (FAO). This new policy will open the way for massive exploitation of agricultural land, in the same way that the mining code allowed for the colonial plunder of the country’s mineral resources. The rural inhabitants will pay the ultimate price. The misery that awaits them will no doubt attract more poverty-reduction aid programmes!

The new phase of history we are entering is characterised by intensifying conflict over the world’s natural resources. The dominant powers seek to reserve the rights to Africa’s natural resources (its ‘useful’ side), to the exclusion of the ‘emerging powers’, whose needs for these same resources continue to grow. The only guarantee that the dominant powers have of exclusive access is through political control, and reducing African countries to mere ‘client states’. Foreign aid plays an important role in achieving and maintaining this.



In a way, one could then argue that the aim of aid is to corrupt the ruling elites. Aid (the donors would have us believe that they have nothing to gain from it!) has become an indispensable part of national budgets, and plays an important political function. It is therefore important that this aid is not reserved for the exclusive use of the ruling elites in government. It must also benefit those in the opposition who may at some point take over the reigns of power. The role of civil society and NGOs is very central in this regard.

The case of Niger, which I have had occasion to study in detail, perfectly illustrates the link between strategic mineral resources (uranium), ‘indispensable’ aid, and the perpetuation of a client state.

BROUGHT TO YOU BY PAMBAZUKA NEWS

* Samir Amin has been the director of IDEP (the United Nations African Institute for Planning), the director of the Third World Forum in Dakar, Senegal, and a co-founder of the World Forum for Alternatives. He is the author of ‘Aid to Africa: Redeemer or Coloniser?’ available to order from the Pambazuka Press website.
* Translated from French By Josh Ogada
* Please send comments to editor@pambazuka.org or comment online at Pambazuka News.

REFERENCES

Yash Tandon, Ending Aid Dependence, South Centre, Genève 2008.
Samir Amin, L’Afrique dans le système mondial, Third World Forum; published in English, Helen Lauer (ed), History and Philosophy of Science, Hope Public, Ibadan 2003.
Anna Bednik, Bataille pour l’Uranium au Niger, Le Monde diplomatique, June 2008.
L'aide, instrument de domination, le cas du Niger, Third World Forum.
Samir Amin et alii ; Afrique : Renaissance ou exclusion programmée ; Maisonneuve et Larose, Paris 2005.


Readers' Comments

Let your voice be heard. Comment on this article.

Samir Amin, you set out to totally demolish Moyo, and barely concealed your contempt of her, why?

She is young and has turned her mind to theoretical matters, critique her by all means but leave out the contempt. She is the daughter of the soil, critique and encourage, by all means.

You took so much away from your piece, because of the barely concealed put downs.
It was so not necessary.

I know nothing about the political economy. I do know that AID has infantilised some African states.

I recently loaned the book from the library to see what the sister had to say. Seeing that the forward was by Niall Ferguson. Was sufficient to put me off!

Yeno Thorli ( Thoughtful Designs)

Extremely important: end the colonization of the African mind !

Do not trust Africans working for the western dominated and financed international institutions like IMF,World Bank,WTO and UNO !

Do not trust Africans educated in western colleges,in particular in social science fields like economics,politics and history !
The best African intellectuals in those fields could not be produced in western colleges but in Africa ! What you could produce there is brainwashed agents of the west.

The reason why so-called "Aid" of the west for Africa failed was it was not intended to help Africa at all.What a stupidity for Africans to even think the west wants to help them.

And finally do not trust European intellectuals,no matter from which country,in matters concerning Africa.

thanks

P.S. corrected version

Toni

Whilst I have not read the article under critique, I can’t help notice the emotive nature of this criticism. The critic, whilst rightly identifying general pitfalls of Brenton Woods ‘one-size-fits-all’ approach to aid and development in Africa, fails to acknowledge that Africa is itself very diverse (geo-politically) that it’s impossible to reach the generalised conclusion(s) that he reaches. The narrative about different kinds of ‘aid’ is only helpful inasmuch as it illuminate the ‘storylines’ that aid is usually tied to; but the intrinsic anatomy of aid itself have not changed fundamentally over a very long period.
I think the issue of aid will remain divisive as long as people like Samir Amin continue to peddle the ‘aid with imperialist overtures’ narrative; which of course some corrupt African leaders use as a smokescreen for ineffective governance (note I shy away from the phrase ‘bad governance’). Yamin, just like the World Bank or Goldman Sachs economists he criticises for their capitalist markets ideological development models, comes across as a development technocrat and theorist. His generalisations are not only questionable but potentially dangerous. For example I don’t believe there is any new era of intensified conflict over resources between what he calls ‘emerging powers’ and ‘dominant powers’. In the global economy the turf has since shifted from resources. Resource scarcity was a fad perpetuated by the economic doomsters of the 60s, 70s and 80s. Western countries are not fighting for exclusive access to African natural resources any more; there is a fight for the control of the credit markets, consumer demand and manipulation of the supply – chain. And truly speaking African natural resources are just a minute drop in this trillion dollar economic ocean.
What Africa needs is development, not aid. But this is not new; so much have been written and said but I believe the problem is not with aid nor any perceived hidden imperialist intentions. The problem is with the recipient nations and institutional frameworks built around aid. We, as Africans need to put our houses in order; and I don’t mean simply accepting ‘western- defined’ democracy and good governance (if we have alternatives we should make these explicit) , but we and we shouldn’t expect aid without ‘conditions’ (that will be naïve) We need to sort out our politics and institutions. We need to make our leaders accountable. And we can only do that by making sure African people are fully engaged in politics.
The issue of aid should not only be discussed and evaluated within the realm of economics. Technocrats, development theorists, economists and politicians should not impose their conflicting theories and schools of thought (based on boardroom brain storming sessions, think-tanks and hurried research undertakings)on the aid issue. Because this does not only move us further from possible rational solutions; it simply causes more suffering in African cities and villages. We need pragmatists, not scholars!

Savania Chinamaringa, Consultant, London

Savania Chinamaringa

Thank you for bringing this sharp and insightful critique on aid. Samir rightly mentions that a critique of aid can only be conducted within the framework of political economy. However the political or the "imperial aspect" of aid is unspokenly ignored as to be'ideological', and thus 'non-scientific'.

Vikas Nath

Dambisa Moyo is a young African scholar at the beginning of her career as a public intellectual and while the vicious attacks from the European and American aid industry is understandable, the brutal attacks from African male stream have been quite shocking. Does she not deserve even a little encouragement for her effort?

No matter how many times she repeats that Humanitarian aid (Amin’s solidarity related aid) should not be conflated with economic aid all her critiques make precisely this accusation of her work. Amin is no exception, but Moyo, it has to be said is focused only on economic aid not solidarity.

Basically the African male stream argues that Dambisa Moyo is not up to the task of criticising imperialism. But, does she claim to be an activist? Is she a believer in Marxism –Leninism-Mao Tse Tung Thought as some of us once were? No! So why should we say she is not up to the task as if her mission is the same as ours? As one who was brought up on dependencia theory and Samir Amin thought, I can say without any regret that two generations of nuanced anti-imperialist critique have led us nowhere. If we paid more attention to what other people were doing and saying maybe we would not be trapped in the Sahara as we currently are.

According to Amin “She only seems to be familiar with a few blinkered development theorists, like David Landes, whose ‘revelations’ are at best trivial (he concludes, for example, that ‘aid’ tends to benefit a small elite minority).”And would you disagree with that? Can the same not be said of dependency generally? So even when she is in agreement with dependencia because she does not refer to the work of the senior African male stream she is condemned.

Amin says “The key question – still unanswered – remains: What strategic political aim does this aid serve?”This is indeed a good question but the problem that Moyo, in my view, is concerned with is the HOW? The main (not sole) strategic aim for hegemony is domination. If we keep asking WHY when it is so obvious, we will spend another generation wishing for auto centric development and a Pol Pot to lead to the Maoist heaven.

You can see the dictatorial tendency in the old African male stream when Amin says: A critique of aid can only be conducted within the framework of political economy. Now that is so closed min it is hard to believe that this is the same Samir Amin who hammered TINA in the past. It is just the same stubbornness that we saw in Margaret Thatcher when she said there is no alternative, or Christians saying it is only through Jesus that one can enter the kingdom of heaven. All that we know suggests that there are always alternatives even if we do not know them. For us to accept that there is no alternative to Samir Amin Thought is to condemn ourselves to permanent stagnation. There are alternatives but we shall never know if we insist on silencing everyone who does not mouth political economy.

I agree with Samir Amin that Moyo lacks knowledge of political economy but I do hold it against her and I certainly do not agree that political economy has all the answers, or that Moyo’s thesis is entirely wrong because of its lack of political economy. In my own review of the book (which Pambazuku did not publish incidentally, understandably to promote the rival Yash Tandon book but nevertheless stifling debate!) I said: - But what Moyo does that is new is that she spells out the alternatives in the language of the economist and not political activist, we shall see later that in the end the little matter of “political will” will loom large and veto most of her well thought out suggestions. Politics, as far as development goes, is always in command – for better or for worse.

Those who want to read my full review will find it at < http://www.zambian.com/zambia/directory/business/business-admin-info/html/dead-aid-dambisa-moyo.html>

So Moyo wrongly refers to Lumumba as a ‘communist leader. Touché! Yes she is the American educated daughter of American educated Zambian parents, however, this book is not about Lumumba whose short stay in office does not tell us anything about his development model though it tells us a lot about what Africans are up against. What I know is that in Zambia Moyo studied natural sciences and not history so her poor knowledge of Lumumba is understandable but it is not an issue worth debating.

Since he started off on the wrong foot by asking WHY instead of HOW Amin highlights the trivial in order to trivialize Moyo’s argument and fails to see its main value: 1) to show her World Bank peers that there is another way; 2) to show her Harvard and Oxford professors that they suggest one model for Africa – aid, and explore other paths for Eastern Europe and Asia relying on, among other things, money markets. Again and again Amin exposes his one track mind and single solution explanations such as when he tells us that “She does not realise that China’s current success is a product of the radical Maoist revolution that it went through.” How simplistic!

Yes the Maoist revolution cannot be ignored but neither can several millennia of Chinese statecraft, Confucianism, population size, regimentation, family values, and a lingering sense of humiliation emanating from the semi-colonial experience. China unlike sub-Saharan Africa was not enslaved by Arabs and Europeans or carved into balkanised colonies. But lest we forget, Samir Amin admires Maoism as did Pol Pot. I doubt that Deng Xiao Ping, the capitalist roader who supervised the Four Modernizations would count Samir Amin and Pol Pot among his comrades. Beware of single cause explanations, beware of TINA for even in Maoism there is a principal contradiction and an infinite number of secondary ones. You stifle alternative explanations to your own detriment.

There is nothing Moyo can add to our knowledge of the past, of political economy and of auto centric development. It is the future that we are worried about. What would be the point of producing yet another dependencia pamphlet? Hundreds of scholars have already done that, most of them in an era before Moyo was even born. Why must we repeat or even update old critiques? Her concern is to encourage us to abandon a development model that has a half century of failure behind it and whether we like it or not our equally teleological modernist narrative of political economy has an equally long history of failure.

The Kariba dam was built with US backed World Bank loans so that Zambia would produce the copper and Zimbabwe the chrome that the USA was building strategic stocks of during the Cold War. Neither Amin nor Moyo knows the history of the dam that well but Amin’s suggestion that Kariba power was meant for South Africa and not Zambia misses the point. That was not an American concern. So we can all do with some refresher course in history.

Accusing Moyo of not doing enough for political economy sounds like saying that the Holy Bible is not Islamic enough. Why must Moyo write Amin’s book and answer all his puzzles? You cannot judge a book by what it did not say if it was not meant to say those things in the first place.


There are many things I will highlight in my longer review suffice it to say for now that it does not matter what the aim of aid is and one does not have to know chaos theory to know that there are always unexpected results, that is why the road to hell is paved with Good intentions. Aid tends to corrupt because leaders that do not depend on taxes collected from their own citizens and rely on foreign aid (or oil revenues instead) are not accountable to their citizens. They do not bother conducting a proper census or to keep up to date tax records. Unlike voters, markets have a tendency to punish the sloppy and ineffective. Granted that she may be showing too much faith in the power of money markets but the point that Moyo makes is that for as long as there is foreign aid and African leaders are answerable to the World Bank and not to their electorates, there is no reason why the status quo will not continue to exist. There is of course the option of the socialist revolution but it is not the only one and it is certainly not Dambisa Moyo’s job to write another What is to be Done? In part Samir Amin has already done that and has been doing it forever.

And this, in my reading of Moyo is precisely why she calls for an exit plan for foreign aid in Africa. If Egypt cannot go down that path maybe Mauritius can so we should not writ it off altogether. What we cannot accept is the suggestion that there is no alternative to Maoism, Thatcherism, foreign aid, Pentecostalism or autocented development. Stifling alternative voices, especially from young scholars like Dambisa Moyo will certainly keep Africa in darkness and both Samir Amin and Pamabazuka should be ashamed of themselves for making it their duty to silence Dambisa Moyo and to promote political economy as the only way. Luckily there will always be other ways whether you like it or not and we should now allow the young generation to also have their say.

Owen Sichone Pretoria University

Its obvious these two people are highly educated and articulate, but just like every one else ENSLAVED from cradle to grave, by the creation of money out of NOTHING as a compound interest bearing DEBT, which results in a child dying every second in servicing this debt.
They also do not realise that the Third World debt in particular and debt in general is absolutely necessary to keep the Ponzi banking system going.
I wonder whether as a result of this creation of money no country is free or sovereign.
''Let me control the issue of a nations currency I do not care who writes it's laws.
The Private bank the FED is able to issue this fiat currency, the U$ dollar thus able to control the world.
Here was my challenge to the US presidential candidates
you all may find it baffeling.
''"Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal -- that there is no human relation between master and slave.": Leo Nikolaevich Tolstoy - (1828-1910)

A reply I sent to prospective Presidential candidate with some additions

''Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits." : Sir Josiah Stamp (1880-1941) President of the Bank of England in the 1920's, the second richest man in Britain

"Endless money forms the sinews of war." : Marcus Tullius Cicero -
(106-43 B.C.) Roman Statesman, Philosopher and Orator
“The process by which banks create money is so simple that the mind is repelled.”
Professor. J. K. Galbraith
You are living in a totalitarian tripartite dictatorship, viz Elected, Press and financial. The last sustaining the two former, due to the fact that money is created out of NOTHING as an interest bearing DEBT enslaving you all from cradle to grave. Any other legislation is only cosmetic, giving a semblance of democracy. What is needed is a basic paradigm shift in the Noe classical economics which governed by interest bearing DEBT, get the money lenders out of the market, get the elected government to issue the money towards productive capacity as interest free loans, to be repaid and debt cancelled, hence counter inflationary.
The insidious and invidious practice of usury is NOT necessary or inevitable.
You are doing a good job but running in the wrong direction just as the rest of the poor devils.
Unless you addresses the question of Money Supply, you all will remain enslaved, and the enslaved will do any thing as they are ordered to do and be willing connon foder to fight illegal illicit wars based on lies
In the Third World a child is killed EVERY THREE SECONDS, the HOLOCAUST is alive and well and had been for decades, you all have been blind
The US is BANKRUPT it total debt is U$56 Trillions including Fed debt and obligations and rising at U$ ! Trillion a year.
Interest alone was U$45 Billion last year.
We are borrowing at £500 million a DAY, our (U.K) total debt is £ 1.8 Trillion
'' It's well enough that our people of the nation do not understand our our Banking and Monetary system if they do there will be a revolution to morrow,''Henry Ford
There is the next round of Commercial property collaspe
Plus Credit Card Debts running in to Trillions

David Soori

Another insightful analysis by Amin on Africa's structural exploitation by Western capital.

Is an alliance with China the only way forward? Or can regional integration break the neo colonial chain?

Joan Nimarkoh FAO




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