6 June
27, 2006
Walter
Williams
http://www.NewsAndOpinion.com | British
Prime Minister Tony Blair, along with other G-8 leaders, have called for the
doubling of foreign aid to African nations by 2010. The idea that foreign aid
is a route out of poverty and political instability is not only bankrupted but
a cruel and evil hoax as well.
Nearly every sub-Saharan African
nation is poorer now than when they became independent during the '60s and
'70s. Since that time, food production has fallen by roughly 20 percent. Since
1975, per capita GDP has fallen at a rate of half of one percent annually.
Nigerian President Olusegun Obasanjo estimated, "Corrupt African leaders
have stolen at least $140 billion from their people in the [four] decades since
independence." The call for more aid by George Bush, Tony Blair and other
G-8 leaders will produce nothing but more of the same.
Zimbabwe provides an excellent
example of why foreign aid, as a way out of poverty, is a fool's errand. Salem
University, Winston-Salem, N.C., professor Craig Richardson explores this
further in "Learning from Failure: Property Rights, Land Reforms, and the
Hidden Architecture of Capitalism," a paper written for the American
Enterprise Institute's Development Policy Outlook Series (2006). Not that long
ago, Zimbabwe was one of the more prosperous African countries. Professor
Richardson writes, "Few countries have failed as spectacularly, or as
tragically, as Zimbabwe has over the past half decade. Zimbabwe has transformed
from one of Africa's rare success stories into one of its worst economic and
humanitarian disasters." It has the world's highest rate of inflation,
currently over 1,000 percent. To put this into perspective, in 1995, one U.S.
dollar exchanged for eight Zimbabwe dollars; today, one U.S. dollar exchanges
for 100,000 Zimbabwe dollars. Unemployment hovers around 80 percent. Its
financial institutions are collapsing. The specter of mass starvation hangs
over a country that once exported food
What's the cause? President Robert
Mugabe blames domestic and foreign enemies, particularly England and the United
States for trying to bring about his downfall. Of course, according to Mugabe,
and some of the world's academic elite, there's that old standby excuse, the
legacy of colonialism and multi-national firms exploiting the Third World. The
drought is used to "explain" the precipitous drop in agricultural
output. Then there's AIDS.
Let's look at drought and AIDS.
Zimbabwe's next-door neighbor is Botswana. Botswana has the world's
second-highest rate of AIDS infection, and if there's drought in Zimbabwe,
there's likely a drought in Botswana, whose major geographic feature is the
Kalahari Desert, which covers 70 percent of its land mass. However, Botswana
has one of the world's highest per capita GDP growth rates. Moody's and
Standard & Poor gives Botswana an "A" credit rating, the best
credit risk on the continent, a risk competitive with countries in central
Europe and East Asia.
Botswana compared to her other
African neighbors prospers not because of foreign aid. There's rule of law,
sanctity of contracts, and in 2004, Transparency International ranked Botswana
as Africa's least corrupt country, ahead of many European and Asian countries.
The World Forum rates Botswana as one of Africa's two most economically
competitive nations and one of the best investment opportunities in the
developing world.
Botswana shares a heritage with
Zimbabwe, for it, too, was a British colony. What it doesn't share with
Zimbabwe explains its success: the rule of law, minimal corruption and, most of
all, respect for private property rights. No amount of western foreign aid can
bring about the political and socioeconomic climate necessary for economic
growth. Instead, foreign aid allows vicious dictators to remain in power. It
enables them to buy the allegiance of cronies and the military equipment to
oppress their own people, not to mention being able to set up
"retirement" accounts in Swiss banks. The best thing westerners can
do for Africa is to keep their money and their economic development
"experts."