BOOK REVIEW compiled by Derek Wilson
Written by Dambisa Moyo, New York: Farrar, Straus & Giroux, 2009
Dambisa Moyo, a highly educated economist and experienced investment banker, grew up in Zambia and now lives in New York City.In her controversial book “Dead Aid”, author Dambisa Moyo notes that the export trade income to Zambia plummeted as the price of sugar dropped from 65 cents per pound to a low of just under 7 cents per pound in 1978.
Did the repayment of loans for this sugar development rob resources from other needs in Zambia? Why was sugar production given a higher priority than maize self-sufficiency, the local staple food?
This investment banker argues for the greater use of commercial loans, foreign direct investment, remittances, and micro-credit. This slim book might have been expanded to provide an integrated and balanced plan with enough detail to convince the reader that she has defined a new path that is clearly distinguished from business-as-usual. Although she identifies unfair trade rules and domestic subsidies as barriers to exports from the Third World, she doesn’t make recommendations for reform.
In 1974 I marveled at the massive field of tall, green sugar canes of the Nakambala Sugar Estate bordering the main road about 50 km. southwest of Lusaka, the capital city of Zambia
As the railcar approached Lusaka, I was surprised to see a shanty town draped over the side of a hill (as it was not visible from the main road). Residents were bathing, washing clothes, and scooping up cooking water from a small stream in the valley. I was alarmed to think that runoff during the rainy season would carry human excrement into this stream. Ten minutes later our railcar passed behind the nearly completed skyscraper of the Bank of Zambia.
A couple of years later while in Canada, I wasn’t surprised to read a small item in a newspaper advising that cholera was being battled around Lusaka. Why was a glass and stainless steel high rise with elevators given priority over new residential infrastructure of basic paved roads, water mains, storm and sanitary sewers? Would the elimination of concessional loans lead to different decisions in similar trade-offs in the future?
The small city of Kabwe, where I lived, had a pleasant business district with tidy paved streets, sidewalks, streetlights, and treed boulevards. The residential areas had potable water lines, sanitary sewers, and weekly garbage pickup. The telephones were as reliable as the “Lion” beer supply. In addition to the local lead-zinc mine, the primary employer, a middle class of European- and Indian-heritage residents provided jobs in retail, farming, manufacturing and professional services. In many African countries, this middle class has emigrated and the colonial-era infrastructure was allowed to deteriorate.
Moyo asserts that, over the past sixty years, the bi-lateral and multi-lateral development assistance to Third World nations has largely been wasted. During that period over US$1-trillion of aid was poured into Africa yet equatorial African nations continue to be the festering sore of human poverty. In Zambia, for instance, the household consumption expenditure per capita plunged by over half from 1980 to 2000 This plunge into abject poverty was prompted by falling world commodity prices and the decimation of the population by HIV-AIDS as much as by corruption, mismanagement, and poor government policies and priorities.
She points out that Third World governments have become addicted to aid; the huge aid bureaucracy has become a self-interested pusher of the aid ‘narcotic’, and tied aid is in the self-interest of the donors. For instance, only 6 cents of every American food aid dollar reaches the recipient; the lion’s share remains in the United States.
Moyo argues that aid encourages revolution because it is the quick way to gain control of the cash. One-fifth of Third World debt is due to past arms sales. She points out that aid provides the daily operating funds for many African nations.
Shortly after the release of her book Time magazine named Dambisa Moyo one of the world’s 100 most influential people. She will share her ideas to a Vancouver audience at the Chan Centre of the University of British Columbia at noon on Monday, November 8, 2010. Her lecture is open to the public. This meeting may be the opportunity to see the future first female president of Zambia.