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Dr. George Ayittey
testifies before
The Senate of Canada's
Committee on Foreign Affairs On Bill C-293 -- An Act
regarding The Provision of Development Assistance
Abroad, Sponsored by John McKay
George B.N. Ayittey, Ph.D.
Distinguished Economist,
American University,
Washington, DC 20016
June 13, 2007.
_________________________
I would like to thank members of the Senate's
Standing Committee on Foreign Affairs for the
opportunity to testify on this Bill – an invitation
I will never receive from any African government or
parliament.
My own position on foreign aid is that while it is
noble to help the poor in Africa, the whole aid
business has been turned into the theater of the
absurd with the blind leading the clueless. The fact
of the matter is this: The aid resources Africa
desperately needs can be found in Africa itself. Its
begging bowl leaks horribly.
The amount of foreign aid from all sources that
flows into the bowl every year is about $25 billion.
But there are massive leakages. According to the
African Union, corruption alone costs Africa $148
billion a year. Capital flight out of Africa is
estimated at $50 billion a year.
In fact, the World Bank estimates that 40 percent of
the wealth created in Africa is invested outside the
continent. At least $15 billion is spent by African
governments on arms imports and the maintenance of
the military, which instead of protecting the people
has turned its guns on them. Somalia, Rwanda,
Burundi, Zaire, Liberia, Sierra Leone, Ivory Coast,
Togo and Nigeria have all been ruined by military
regimes. Another leakage is the $19 billion Africa
spends every year to import food when back in the
1960s, Africa not only fed itself but also exported
food. Adding up the leakages exceed $230 billion,
which is nearly ten times what comes in foreign aid.
Obviously, Africa can find more aid resources by
plugging the leakages than begging for more aid. But
aid cannot be stopped. It is a moral imperative for
the rich to help the less fortunate. Civil society
organizations will mount pressure on the Canadian
government to raise its aid commitment from 0.4 to
0.7 percent of its GDP – especially in the light of
the widely reported fact that Africa is not expected
to meet the Millennium Development Goals (MDGs).
At the April 3, 2007 ECA's Conference of Ministers,
Dr. Wani Tombe Lako of the Information and
Communication Service of ECA, said in Addis Ababa,
Ethiopia) that at the current pace, it was
unrealistic for African countries to imagine that
they could achieve the MDGs, "even in 100 years."
Dr. Lako said that poverty and hunger in Africa
might double by 2015. He said most African countries
had not made progress in gender equality and women's
empowerment, and that Africans were still living "in
an ocean of poverty" (http://www.uneca.org/mdgs/Story0700403.asp)
These sentiments were echoed by another United
Nations' African Development director, Gilbert
Houngbo, who said in Brazzaville, capital of the
Republic of the Congo that "the [African] continent
will fail to reach the goal of slashing poverty in
half by 2015. "Despite some encouraging economic
results, Africa will not achieve the Millennium
Development Goals by 2015. African growth is
handicapped by ... poor empowerment of women, weak
child protection, and insufficient access to
reproductive health and to decent work," he said
(The Washington Times, April 26, 2007; p.A14).
However, to help Africa we cannot proceed to do
business as usual. Forty years of development
assistance to Africa has been a massive failure. As
I indicated in a testimony before this Committee
last year, there were problems on both the donors
and recipients' sides. Accordingly, I would like to
congratulate the Committee for their courage in:
A). Admitting of this failure of development
assistance to Africa. It is tough to admit mistakes
but it is cathartic, and
B) Crafting a Bill to fix the problem, given the
considerable resistance they face from the
government.
I recognize that the Bill has gone through the
parliamentary meat grinder and has been stripped of
certain provisions; for example, the Advisory
Committee and the Petition clause. Nonetheless, the
Bill seeks to achieve three laudable objectives;
First, the objectives of Canadian development
assistance are more clearly defined. In the past,
id=lw_1192598787_26 style="CURSOR: hand;
BORDER-BOTTOM: #0066cc 1px dashed">Canada tried to
be all things to all poor people. This time around,
the Bill makes poverty reduction the goal of
Canada's official development assistance, to ensure
that this assistance is consistent with Canada's
international human rights obligations and that it
takes into account the perspective of those living
in poverty.
Second, and for the first time in Canadian history,
the Bill seeks to enforce accountability and
transparency in the disbursement of development
assistance. The competent minister will have to show
what has been spent and what results have been
achieved in terms of poverty reduction.
Third, the Bill will shorten the time it takes to
obtain information on development assistance. It
cuts the time from the current two years or so to
six months from the end of the fiscal year.
Nonetheless, while this Bill is a major improvement
on the current status quo, I have two major
concerns.
A. About the Bill Itself:
First, I recognize that the term "poverty-reduction"
has been adopted in consonance with international
norms, as specified by the OECD Development
Assistance Committee, the DAC, and the UNDP. But the
term can create perverse incentives. Since poverty
in Africa has often been exacerbated by misguided
government policies, what prevents a government from
creating more poverty in order to receive more
development assistance?
"Wealth-creation" might probably be a better term as
this would change the matrix of thinking about
development. Instead of conceiving of the poor as in
a pitiful state for their poverty to be reduced,
they may now be seen as dynamic wealth creators,
which they are. More importantly, the adoption of
this new terminology will help reduce the state's
role in development. Wealth is created in the
private sector, not by the government.
The existing "poverty-reduction' terminology rather
strengthens the role of the state in development.
Africans' view of their governments was beautifully
summed up by a tribal chief in a rural farming
community in Lesotho: "We have two problems: rats
and the government" (International Health and
Development, March/April 1989; p. 30).
To solve Congo's
economic crisis, Amina Ramadou, a peasant housewife,
suggested: "We send three sacks of angry bees to the
governor and the president. And some ants which
really bite. Maybe they eat the government and solve
our problems" (The Wall Street Journal, Sept 26,
1991; p. A14).
Said Mr. Mohammed
Boudiaf, the head of Algeria's High Executive
Council (HEC), lamented: "A large segment of the
population has, I am afraid, lost confidence in the
capacity of the leadership to provide jobs, housing,
health care and its ability to combat corruption"
(Financial Times, June 17, 1992; p.
4).
Second, the Bill seeks to take into account "the
perspectives of the poor" but how this is to be
achieved is unanswered in the bill. In the original
version, a provision was made to have an Advisory
Committee and a Petition process but these have been
dropped and there is no mechanism for that in the
new version.
B. About the Recipients In my view, there are many
more problems with the recipients in the utilization
of development assistance. Due to diplomatic
constraints and issues of sovereignty, there is only
so much Canada can do to enforce accountability and
transparency but these are exactly what the poor in
Africa would also like to see: Who gave what to
assist Africa and how was the money spent? This kind
of information is "empowering."
Last year, I testified that smart aid is that which
empowers the poor to ask such questions and
instigate change from within. The donors talk about
"poverty-reduction" but the poor in Africa, who see
their governments as the cause of their poverty,
want change.
Canada can be a leader in this regard by setting
conditions under which she will give aid. At the
minimum, just as the Bill requires the competent
minister to account for how development assistance
was disbursed and what results were achieved, the
Bill should also require the correspondent minister
in the recipient country to provide an accounting of
how Canadian aid was spent. Such a report should be
made public, sent to both parliaments.
At the maximum, Canadian aid may be strategically
targeted to empower the poor. Currently, foreign
development assistance is not targeted. It is
provided as "general budgetary support." A typical
African budget is broken down into two categories:
"Recurrent Expenditures" and "Development
Expenditure."
Generally, the government raises enough tax revenue
to cover "Recurrent Expenditures." The "Development
Budget" is then presented to donors for funding. But
aid money is fungible and once provided, it
disappears into the catacombs of the government,
making it impossible to determine exactly what it
was used for.
A better way is for Canadian aid to target specific
institutions that empower the poor. As I mentioned
last year, six institutions are critical in this
regard to assure accountability, transparency and
professionalism.
• A free and independent media to ensure free flow
of information. The first step is solving a social
problem is to expose it, which is the business of
news practitioners. State-controlled or state-owned
media do not expose corruption, repression, human
rights violations and other crimes against humanity.
In fact, it is far easier to plunder and repress
people when they are kept in the dark. The media
needs to be taken out of the hands of government and
ought to be the first strategic enterprise the state
should divest itself from before any foreign aid is
given.
• An independent central bank: to assure monetary
and economic stability, as well as stanch capital
flight out of Africa. The World Bank, for example,
should desist from dealing with African countries
without an independent central bank. Central banks
have been the linchpin in the transmission of loot
by the ruling bandits.
• An independent judiciary -- essential for the rule
of law. Supreme Court judges may also be rotated
within a region. In December 2001, Mokhtar Yahyaoui,
president of the Centre de Tunis pour l'independence
de la Justice (CIJ), was dismissed as a judge in
Tunisia after calling for the constitutional
principle of the independence of the judiciary to be
respected (Index on Censorship, July 2003; p.161).
• An independent Electoral Commission to avoid
situations where African despots write electoral
rules, appoint a fawning coterie of sycophants as
electoral commissioners, throw opposition leaders in
jail and hold
"coconut" (farcical) elections to return themselves
to power. Africans take elections seriously and will
throw the "rascals" out in a free and fair
elections.
• An efficient and professional civil service, which
will deliver essential social services to the people
on the basis of need and not on the basis of
ethnicity or political affiliation.
• The establishment of a neutral and professional
armed and security forces.
The establishment of these institutions would solve
the majority of Africa's woes. For example, the two
great anti-dotes against corruption are an
independent media and an independent judiciary. But
only 8 African countries have a free media in 2003,
according Freedom House. These institutions cannot
be established by the leaders or the ruling elites
(conflict of interest); they must be established by
civil society.
Help give the African poor these institutions and
they themselves will instigate change, create wealth
and lift themselves out of poverty.
Thank you.
George B.N. Ayittey, Ph.D.
Washington, DC
June 13, 2007.
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