The Path of Least Resistance

Roger Bate & Richard Tren | 11 Jul 2005
Weekly Standard

THE G-8 MEETING is over, tragically overshadowed by the atrocities in London. And while Londoners demonstrated their resilience, G-8 leaders have followed the path of least resistance, again. The notion that more aid to Africa will help this poorest of continents ignores the likely entrenchment of corrupt political elites who have overseen decades of decline and misery.

Nevertheless, the strong and repeated messages both of G-8 leaders and African businessmen that development in Africa is up to African governments establishing the institutions of a free society, is important. This should help focus minds on choosing correct policies, which can lead to higher growth and greater prosperity. It is self-evident that "enhancing governance and the rule of law will attract more and broader private investment," but nevertheless the G8 leaders are to be applauded for saying it.

Humanitarian aid is thankfully to be stepped up--the extra $1.5 billion a year for anti-malaria interventions is encouraging and the agreement happily specifies that this should go towards buying commodities. This ties in with President Bush's pre- G-8 announcement of more malaria funding (over $1.2 billion over 5 years) which mentions using the money to buy insecticides for indoor spraying, ITNs, and drugs. This promise of funding more commodities puts further pressure on the U.S. Agency for International Development (USAID) to change the way they fund malaria control and to stop diverting most of the money to U.S.-based consultants.

But that is about where the good news ends.

While some African countries do show signs of becoming more

democratic and have improved their governance, giving them more development aid will not make them grow faster. Ignoring humanitarian assistance, which has a role to save lives today, development aid can harm exporters by driving up the exchange rate, can give state officials enormous powers to run programs and projects that are deemed desirable by bureaucrats, but that are not necessarily good for the people or economy. Aid is fungible--it is easily diverted to interest groups. Aid can make a government less accountable to the people it is supposed to represent, so it matters little whether governments enact economic reforms or social reforms as they are not reliant on the general population for support. Perhaps most importantly, development aid rewards bad policies, and this is seen again and again. For example, President Kibaki of Kenya, elected to replace years of corrupt and venal rule by President Moi, was recently accused of corruption and "vomiting on the shoes" of donors by the most senior British diplomat in Kenya, Sir Edward Clay.

It is a fundamental mistake to assume that most African leaders represent the needs and aspirations of ordinary African people. So the G-8 leaders are correct when they say that development is up to African countries, yet it is troubling that they have nonetheless given much money to the political elites who run these countries.

The G-8 and Tony Blair spoke so eloquently about better governance and how good the African Union is as institution--but it, and its most powerful national leader, South African President Mbeki, have done nothing about Zimbabwe. Their ongoing support for Zimbabwe is a stain on the continent. The A.U. now has an opportunity to demonstrate that it believes in democracy, in basic human rights, in property rights, in free speech, in the rule of law and all of the other basic freedoms that lead to growth, prosperity, and a decent society. And yet they have been silent on Zimbabwe. As if to reinforce the danger of their stance, the South African Broadcasting Corporation has just reported that Mugabe's war against his opposition is expanding, with more property destruction and loss of life to come.

The biggest boon to Africa would have been for the G-8 to remove trade barriers with rich countries--but this wasn't achieved. Tony Blair remarked that this should be dealt with in Hong Kong at the WTO Ministerial. Perhaps the G-8 is right, but there seems to be a consensus of opinion among trade experts that little will be achieved in Hong Kong. A strong statement from the G-8 leaders could have given some impetus to this process. In essence, the G-8 went for the low hanging fruit. It is easy to write checks, but far more difficult to change the policies that create poverty. Roger Bate is a resident Fellow of the American Enterprise Institute, Richard Tren a Director of Africa Fighting Malaria in South Africa.

Roger Bate is a resident Fellow of the American Enterprise Institute, Richard Tren a Director of Africa Fighting Malaria in South Africa.