Friday, October 19, 2007

The war we are losing

I live an amazing life. I wake up every morning with the feeling that it actually matters whether I go into work or not. I work with people from very different backgrounds. And I work on the front of an economy and country going through radical changes. Sure, there are days when I would rather stay in bed, but there is a clear underlying feeling that I am not just a small cog in the machinery. And I love living in Africa. Every day I take a few seconds to stand on my terrace and look at the rolling hills of Kigali city. Every driving through the lush green countryside overgrown with banana trees and overrun with children makes me feel like I am in the middle of life. The extreme poverty and shocking equality are always present, but they are also a part of what makes this world more real than the comparatively wealthy comfort of Europe. It is living at the front of the last great battle against poverty, corruption, lies, self-serving arrogance and overpaid consultants. It is also a battle that we are losing because of our inadequacy and our arrogance: Africa is not emerging from poverty. The current style of development assistance destroys local markets and encourages Africans to become more and more dependant on foreign aid handouts.
But this can’t last. The naive hope of the Live8 generation that “more aid is all we need” will slowly fade. The failures of the aid industry are becoming more obvious and more difficult to hide. And it is unfortunate, because aid is not bad per se. For me, there are still brilliant people and great organisations doing amazing work in Africa. The methods of the aid industry simply need to change, and people back in “the developed world” need to begin to understand the change that is needed, in order to start lobbying for it. For example:
  • Don’t give anything for free. Used clothes from Germany destroy the local textiles market, free American vegetable oil competes with local farmers, free solar power modules put local traders out of business and free money goes to the corrupt and lazy. When you give things for free, you destroy local businesses and livelihoods.
  • Use the private sector, even if it means that projects are more difficult. Use local construction companies, hire local companies to implement projects, create joint ventures and public-private partnership, encourage an entrepreneurial mentality. Find ways to deal with the cheats, con-artists and dubious businessmen that leach off donors.
  • Stop using cash flow as a way of measuring aid agencies’ performance. Almost all aid agencies have “spending targets” as a way of measuring their “success” in their country programmes. In the aid industry, if you’re not spending, you’re not working. This encourages reckless spending and bizarre behaviour. At the end of the fiscal year for example, many donors will start spending huge amounts of money on products and consultants with little overall strategy.

So the question is, is it worth continuing with the development aid industry?

Yes. If simply because it is better to try and fail than to give up and leave Africa in poverty indefinitely.

But not at any cost. Africa doesn't need more money. And Africa doesn't need more development initiatives from the developed world. We need to be more intelligent about the way in which we do aid. And maybe the best way to do that, is to take a step back and start again with smaller, but carefully monitored projects.

I realise of course that this might mean that less money reaches Africa. But since at the moment, much of the money poured into Africa has a negative effect on the economy, this may just be a good thing.


Olivier said...

Whats do you mean about micro-credit devopment. Isnt'it an interesting way of solution for your action ? I think there is a new vision in this kind of direct financial of local market and initiative ? Keep going and take care. See you. Olivier

Maurice said...

Micro-credit is a brilliant concept, and shows that some people are thinking in the right direction. It's implementation has been tricky because
a) SO much money has been poured into micro-credit schemes, that the quality of the micro-finance institutes has dropped and many go bust.
b) Credit is only as useful as the project that you use it for. If you take out credit to pay for your daughter's wedding, you won't lift yourself out of poverty. If you use your credit for a commercial project, things look much better. In fact, better micro-credit schemes such as the Grameen bank now offer consulting and savings services through their institutes.

Micro-credit is only the beginning. There is still an important role to play for "medium" size projects of thousands of dollars investment and "larger" projects of millions of dollars investments.