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Matt Cavedon is working for the Acton Institute for the Study of Religion and Liberty this summer. Attending Acton University 2009 was his first assignment, where for four days earlier this month nearly 400 participants from almost 50 countries came to Grand Rapids, Mich., to learn about natural law, economics, religious morality and other essential elements of a free and virtuous society. The article below is based on a conversation he had with a Ghanaian student of international development during Acton U., and is the first of a three-part series of columns this week related to Acton U.
An addiction is denying an entire continent the ability to escape the worst conditions of poverty on Earth. Governments use it as an excuse to maintain their corrupted regimes. It has torn the attention of voters and politicians in that continent away from developing their economies, even in times of such dire need. The worst thing about this addiction is that no amount of medicine or rehab can cure it.
Western foreign aid is killing Africans.
More than $340 billion was given to Africa by Western governments through state-to-state aid and non-profit organizations between 2004 and 2008 alone. More than a third of the continent’s population still lives on less than a dollar every day, despite the world’s governments spending three times as much on Africa last year as the American government did on all of its State Department programs.
While President Obama thinks that the biggest problem is that we are not spending enough, as evidenced by his proposal to double American foreign aid worldwide to $50 billion annually by 2012, one African leader and historical examples from elsewhere in the world suggest that focusing on market development is a better way forward.
In an op-ed in The Financial Times earlier this year, Rwandan President Paul Kagame called for the West to open up trade and investment opportunities in Africa, instead of continuing to give handouts to governments. Asserting that foreign aid leaves recipient populations “unstable, distracted and more dependent,” Kagame went on to tell Western readers that “Nobody owes Rwandans anything… We are attempting to increase our gross domestic product by seven times over a generation, which increases per capita incomes fourfold. This will create the basis for further innovation and foster trust, civic-mindedness and tolerance, strengthening our society.”
Kagame is right to note that the real way to improve life for Africans is through entrepreneurship and competition. Creating wealth is a difficult task, and poverty is the normal state of humanity wherever governments don’t focus on it. Efforts that look down and try to pick people up from the depths of need will not be successful because they fundamentally misunderstand what ends scarcity. Only efforts to get up from below by harnessing their talents and making valuable things let people escape the cycle of poverty.
The notion that African destitution can be ended by eradicating poverty, lowering infant mortality rates and curing disease has the process of development backwards. People don’t get rich by ending poverty. They end poverty by getting rich. Businesses will not wait until wells are dug before setting up shop in the sub-Saharan, but wells that are dug today by the Peace Corps will not be there in twenty years without someone hiring Africans.
Securing foreign aid has to stop being the primary goal of African leaders if the lives of their people are going to be improved. Only by making real economic development the highest priority will things get better. Leaders need to reform their political systems to acknowledge property rights, lower trade barriers, and remove excessive regulations on businesses and investment so that wealth can be created.
Africa may face special challenges due to its current state of weakness, but they are not a legitimate reason to prioritize foreign aid over rational economic policies. The African continent is blessed with more natural resources than Japan and more potential laborers than Europe. The problems that it faces from disease and hunger are daunting, without a doubt, but the idea that hospitals will be built and crops grown as long as the only capital in Africa comes from the charity of the West is fatally wrong. Cholera and influenza epidemics did not need to be suppressed before Europe developed; indeed, these diseases are no longer able to kill tens of millions of people in the West today precisely because we are economically developed. The only way that we can break the destructive power of malaria, AIDS, and typhoid in Africa is by letting it get rich by moving to free and open markets, not the other way around.
Foreign aid policies are based on good intentions, but they let rulers get rich and stay in power without pursuing enlightened economic policies and they do not create wealth, which is the only real way to end poverty and improve conditions in Africa. Hopefully, President Obama can realize this and shift over his efforts towards Africa to helping governments create better economic atmospheres, breaking political corruption, and calling on the West to end unfair trade practices and agricultural subsidization that don’t let African farmers compete freely in global markets.
If Obama continues to emphasize foreign aid as the way to prosperity, then Africa’s addiction to foreign aid will continue to kill its people and, albeit unintentionally, prolong the world’s worst human suffering.
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