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Africa needs Trade, not Aid
- Roger Helmer
Some people say that Africa needs "A new Marshall Plan" of
massive aid todrag it out of poverty and set it on the road to prosperity and
self-sufficiency. Yet they seem unaware that in the last fifty
years,
Africa has received the equivalent of five Marshall Plans in
foreign aid.
Yet many African countries are getting poorer. Aid breeds
dependency. It undermines self-respect and enterprise. It creates perverse
incentives.
For example, both African leaders and the major aid agencies and
NGOs havean incentive to present African countries as poverty-stricken
and dependent, in order to maintain the flow of aid.
No one, of course, thinks that Oxfam executives sit around and
plot ways of keeping Africa in poverty, in order to ensure the long-term
survival of Oxfam. Yet their mind-set -- that aid is the solution, not the
problem, and that no matter how long we keep failing in Africa, more aid
is the only policy -- has the same effect. There is a community of
interest between NGOs, African governments, charities in donor countries,
and to an extent donor governments, which maintains the status quo and
denies Africa the radical solutions it needs.
These, at any rate, are the views of Thompson Ayodele, the
director of a Nigerian think-tank The Initiative for Public Policy Analysis
(www.ippanigeria.org), whom I met at a dinner in Strasbourg on
May 4th.
He sees several steps that need to be taken to achieve
prosperity and sustainable self-sufficiency in Africa. First, there is a
fundamental
need for good governance, transparent laws, property rights and
enforceable contracts, without which no free economy can
flourish.
This is something that only Africans themselves can deliver,
although they could benefit from Western help. But Thompson's second criterion
depends on the developed world. We need a commitment to open markets and
free trade. Put simply, poor African producers cannot trade their way
out of poverty unless we in the West open our markets to their produce.
Here in Europe, the EU's Common Agricultural Policy, and similar
protectionist subsidy régimes around the world (especially in
the US), are the problem. We have not only been closing our doors to imports
from developing countries. We have also been subsidising the export
of excess food production from the EU to poorer countries, undermining
local farmers and driving them off the land and into big city slums. There are
now some steps to eliminate these export subsidies, but they are too
little, too late.
Thompson had hair-raising stories of aid programmes in Africa
where huge sums have been corruptly siphoned off to local bodies and
officials, and of ambitious and grandiose flagship projects that have failed to
be completed. The logical route would seem to be to use aid for
projects that directly benefit the economies of recipient countries, and
for the donor nations to control the projects in some detail to ensure
that the money is actually used for its intended purpose.
But the trend seems to be in the opposite direction: more
government-to-government aid, allowing recipient governments at
best to patronise their own client constituencies of supporters, at
worst to divert aid to military spending, Swiss bank accounts and corrupt
personal wealth.
Is there any good news amidst this litany of failure and waste?
Thompson points to the mobile phone market, which in Nigeria, and Uganda,
and other African countries has created a free market in at least one
sector, and allowed African entrepreneurs to get a step up on the ladder of
prosperity. Arguably this one new technology has done more to
create jobs and prosperity in Africa than fifty years of Western aid.
There is no substitute for trade. We in the West must stop
talking about free trade and start doing it. Trade opportunities will create
entrepreneurs in Africa with proper pride and self-confidence,
and with
the entrepreneurs, pressure for reforms of governance. We should
forgetabout aid (except in limited and highly controlled contexts). We
shouldreject ineffective window-dressing solutions like "Fair Trade"
brands.
And instead we should take down our trade barriers and dismantle
the
iniquitous CAP.
Roger Helmer is a British Member of European Parliament
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