(Week 14): Empowering Women

Gender Equality is an issue of large social importance across the globe. Depending on the country and region the issue of gender equality takes on slightly different in forms. In Africa poverty and gender inequality are interconnected, as women are much more likely to be poor and illiterate than men.  Women’s opportunities for growth, education, and development are often hindered by discriminatory traditions or laws in some Sub-Saharan African countries.  Everything from not being able to own property to not being able to attend school while menstruating takes away from potential opportunities for young women and increases the gender inequality gap.

To achieve gender equality initiatives and projects on education, entrepreneurship, and financial independence should have a focus on women. Empowering women benefits everyone.  Helping half the workforce have access to opportunities, and overcome barriers put in their place simply because of their gender, helps stimulate the livelihood and opportunity of the community that empowers them.

In terms of policy and women’s rights there has been some success:

  • the number of countries that do not grant women the right to vote is on the decline
  • Women are gaining more positions in parliament throughout Africa.  Many African countries have more women in parliament than some western ones (Rwanda’s government is run by a female majority).
  • Women living in poverty are gaining greater access to credit and saving mechanisms internationally because of microcredit.
  • There has been an almost universal ratification of the women’s rights treaty, the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW).
TwvRWCn

women’s suffrage around the globe (source: imgur)

Despite some success in empowering women in the last decade or so, numerous problems still remain in terms of gender equality.  Even when there are law that say that gender discrimination and lower pay for women are illegal these things still happen (Africare).  Sub-Saharan women make up only 15% of the region’s landholders, despite the investment and work women put into their families and communities.  These women are also more likely to face obstacles concerning sexual exploitation, disease, and illiteracy.

To create a more sustainable gender equality across the world micro-financing opportunities, leadership training, and the encouragement of female entrepreneurship are necessary to help women grow, develop, and reach their potential. Training is just the first step, women must also be able to access supervisory roles and business management.

The Initiative for the Economic Empowerment of Women Entrepreneurs Project (IEEWP) was founded by Africare in 2008.  Funded by ExxonMobil this program provides training for better agricultural practices and agro-processing centers.  The IEEWEP was able to increase women’s participation in local businesses (and their salaries) in Southern Chad.

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Africare logo (Africare)

Since 2011 more than 1,000 women have found work through a graduated business development project, which serves to diversify their income sources. These projects also helped increase their annual income by approximately 70% (Africare).

Despite some of these advancements there is still room to improve in terms of gender equality, here are some continuing concerns:

  • In many places women are not allowed to own property or inherit land
  • women work more than men, but are often paid less
  • Religion or tradition can be used as an additional obstacle for equal rights in some societies deeply roots in patriarchal ideals.
  • Female Genital Mutilation/Cutting (FGM/C), trafficking, social exclusions, “honor” killings, early marriages, and restricted mobility deny women and girls their health, increase the chance of illness and death.

There are many ways that women can create positive economic change, Women, Work, and the Economy discusses a couple of these situations:

  • When women are able to develop their full labor market potential, there can potentially be significant macroeconomic gains
  • the employment of women on an equal basis would let companies make better use of the available talent pool, with potential growth implications.
  • Equal access to inputs would raise the productivity levels of female-owned companies
  • There are better opportunities for women to earn and control income, which could contribute to broader economic development in developing economies
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(Week 13): Empowering Women

In this TEDx talk, Halima Hima challenges the way we think about empowering girls and women in rural communities. Hima was selected in 2011 as one of “Africa’s 25 top emerging women leaders under 25 for their commitment to service”.

When we empower women and girls to become leaders and agents of change in their own communities we can help break down cultural and historical barriers that stand in their way.  We can do this by investing in untapped skills of these women, by giving them the resources to achieve their potential.  Education is a major component to making this happen. Many young women in Sub-Saharan Africa, and around the developing world, do not always have ready access to primary and secondary education. The skills that these girls can obtain from primary and secondary education are essential to their future success.

Education gives girls confidence to pursue their goals, and gives them the resources to do so.  It also gives them the confidence to take a stand about issues that matter to them and other women in their community. Women in Malawi have started campaigns against child marriages, and women across sub-Saharan Africa  have advocated for health care and education for women and girls.  This is especially important in underdeveloped countries because women and girls are the most likely to feel the full force of poverty.  Micro-loans and similar programs discussed in earlier weeks try to help create a spirit and means of entrepreneurship in these communities.

Let Girls Lead is just one of the many organizations that seeks to empower young women in developing countries. They offer training and support for young women in the hope to help create a global girl power movement. Among other goals, this group advocates to promote literacy in rural developing communities, and to set the national marriage age at 21.  Let Girls Lead supports more than 600 local and grass-roots organizations.

They help provide services and training to social entrepreneurs around the world.  Let Girls Lead advocates for understanding the social, cultural and legal barriers that exist around discriminatory laws and policies before trying to completely overhaul them.  How to create change for women in the context of their culture and their community on the terms of these women, and providing them with the necessary means to do so.

Empowering Ugandan Women

76% of women were in the labor force in Uganda in 2011, but women in Uganda only own a small fraction of property. Women in Uganda often have substantial economic and social roles compared to many other Sub-Saharan African countries. Despite the large social and economic responsibilities Ugandan women have held in many traditional Ugandan societies, there is still large amount of inequality and strict gender roles that exist for women in Uganda today (Fortune). USAID works in Uganda, recently they assisted female parliamentarians (35% of parliament members in Uganda are females “in achieving the passage of an anti-trafficking bill.  This strengthened their voice to provide greater legal protections for women and children” (USAID).

USAID’s programs around the world try to attain rights for all by:

  • narrowing gender gaps in education and learning
  • creating safe societies where women and girls can live free from violence
  • providing care and treatment services for victims of gender-based violence
  • ensuring women a seat at the table in peace-building, mitigation, and conflict prevention.
  • increasing the participation of women in decision and policy-making at all levels
  • strengthening women’s access to resources and opportunities that will allow them to share more broadly in the benefits of economic growth

Recent research has indicated that HIV infection has decreased as education rates in Africa have increased. Supporting the idea that education and training has been effective in decreasing this critical issue.  As the cost of education costs rise in Africa it has become more and more difficult to continue empowering young girls.  Some suggest to lay a proactive foundation for HIV prevention efforts African governments should invest more in primary and secondary education.

ActionAid International says that formal education can influence vulnerability to HIV in a number of ways:

1. expose girls to HIV and AIDS education which can in turn help prevent HIV

2. affect the social and sexual network for girls

3. influence the level of power within sexual relationships

4,. provide psycho-social benefits for young women, helping them build their self-esteem and the capacity to act on HIV prevention messages in their own lives.

5. lead to better economic prospects, which in turn lead to lifestyle changes that can influence HIV vulnerability.

ActionAid as an organization seeks to

  • assist with access and control of land and natural resources
  • secure basic rights for women and girls
  • create accountability at all levels
  • assist with disaster management and resilience building

ActionAid is able to do this by placing women and girls at the center of their work. They believe that gender equality is the key to poverty eradication, and that women’s rights must be protected and promoted.

(Week 12): Women

Equality and empowerment of women in the home and in the workplace is the subject of ongoing national and international conversations. Hundreds of NGOs and companies located around the world focus on providing women with opportunities that can help them overcome obstacles and help them achieve their goals. Inequality and sexism not only hurts women but potentially the entire workforce as this inequality hurts economic flow.  By not having the same opportunities, roles, or any jobs for women we are effectively cutting out half the potential workforce. Women who are not able to start their own businesses because of ill opportunities provided to them are not able to provide economic output in their community are not able to provide for their families.  

Traditional patriarchal societies often hold certain cultural values and laws that result in marginalization. Further many rural and tribal patriarchal societies often do not have the structure or the governance that would protect women in the workforce. There are cultures and individuals across the world that hold limited views on what women are capable of, and where exactly they belong in the workforce.

KIVA logo

KIVA logo

Micro-loans have been critical in helping increase economic opportunities for women, especially in rural areas.  Micro-loans allow small businesses in these rural areas access to traditional banking services that they would not have otherwise.  Increasing numbers of women own small businesses in developing countries especially in Sub-Saharan Africa. In last week’s blog post I discussed micro-loan organizations such as KIVA more in depth.  These organizations provide loans to small businesses to help men and women in these communities build their businesses, support their family and community. Mechanisms such as those that these micro-loan organizations provide help individuals and communities break out of the poverty trap.

Menstrual cups in Africa keep girls in school.

                                                        Menstrual cups in Africa keep girls in school.

To improve the situation for women around the world and specifically in Sub-Saharan Africa there are a couple of potential solutions that can be employed.  The bettering of economic conditions and opportunities for women and reform in places that allow legal discrimination where women do not hold much political clout are changes instrumental in helping empower women in the workplace. Making education accessible and available to women is an easy step to empowerment. Many young women in Sub-Saharan Africa are kept out of the classroom when they are menstruating. Keeping girls out of school every time they menstruate can add up and set girls back.While it does not stop menstruation, menstrual cups a provide cheap, hygienic solution to keeping girls in many Sub-Saharan African countries in schools (Huffington Post).

Uganda

Women in the Workforce across the world.

Women in the Workforce across the world.

Women living in Uganda are three times more likely than their husbands, sons, or brothers to run a business. 35% of Uganda’s parliament is made of women as of 2012.  As of 2011 76% of women were in the labor force in Uganda. On the Global Gender Gap Index Uganda ranked 46th out of 136 and 110th on the Gender Inequality Index.  Despite the large social and economic responsibilities Ugandan women have held in many traditional Ugandan societies, there is still large amount of inequality and strict gender roles that exist for women in Uganda today (Fortune).

A member of Outreach Uganda displays her handmade tablecloth.

A member of Outreach Uganda displays her handmade tablecloth.

Part of the reason women are more likely to own businesses than the men in their lives in Uganda is because of the prevalence of micro-loan organizations.  Outreach Uganda is one of the many organizations that works in Uganda using Micro-credit loans. The businesses that Outreach Uganda helps finance are often centered around handmade goods and jewelry and many are sold at fair trade venues in the United States.  These loans do come with some stipulations and recipients can only receive loans after completing “necessary paperwork and meeting stringent requirements” (Outreach Uganda).

Week 11: Micro-loans with KIVA and The Grameen Foundation

The Grameen Foundation’s goal is to help the world’s poor achieve their potential assessing their skills and goals and giving them the resources they need to achieve those goals.  Their focus is on health, agriculture, financial services, and anti-poverty.  Since 1997 the Foundation has been able to make an impact in Sub-Saharan Africa through access to financial services and creation of mobile-based solutions.

Grameen Foundation logo

The Grameen Foundation’s bank model is a village bank for that is based on principles of solidarity and trust. Micro-loans are an attempt to help small poor business owners get their business on its feet by giving them the resources and funds to do so.  The idea is that with the micro-loan the business will be able to operate, make a profit, and eventually pay back the loan. The Grameen Bank is a microfinance organization it won the Noble Peace prize in 2006.  Their target countries are countries with rural poor.  They are able to work with countries such as Uganda through mobile technology. In 2002 they launched Village Phone, Grameen’s Community Knowledge Worker works to combine mobile technology an human networks to give smallholder farmers access to accurate and timely information that helps protect their crops and improve their yields and make higher profits. In Nigeria the Grameen Foundation is part of a variety of organizations that make up the Africa Health Markets for Equity (AHME). This was co-founded by the Bill and Melinda Gates Foundation and the partnership seeks to improve health outcomes through the provision of quality private sector health care targeted at the poor in countries such as Kenya, Nigeria, and Ghana.

The Grameen Foundation in Uganda (source:grameenfoundation.org)

The Grameen Foundation in Uganda (source:grameenfoundation.org)

KIVA is a microfinance institution, it’s mission is to connect people through lending to alleviate poverty.  They partner with microfinance institutions to provide loans to people who do not have access to a traditional banking systems.  Here are some  examples of their partnerships:

        KIVA logo

In chapter 10 of Dead Aid the three interlinked stages Moyo is talking about  are as follows:

  1. Economic plan which reduces a country’s reliance on aid
  2. Choose a finance alternative
  3. Strengthening of institutions through accountability and transparency

Both Sachs and Moyo highlight the importance of an alternative plan of action, as well as the strengthening of institutions such as the IMF and the World Bank.

Sachs proposal is a little different from Moyo’s.  In The End of Poverty calls for the reform of globalization called “Enlightened Globalization”.  This “Enlightened Globalization” includes a globalization of science and technology, democracies, multilateralism, and a global economic system designed to meet human needs (Sachs, 359).  Sachs sets out a 9 step program to reach this goal of “Enlightened Globalization”:

  1. A commitment to ending poverty-halving poverty by 2015 and ending extreme poverty by 2025
  2. Adopt a plan of action
  3. Raise the voice of the poor
  4. Redeem the role of the US in the world
  5. Rescue the IMF and the World Bank
  6. Strengthen the United Nations
  7. Harness a global service
  8. Promote sustainable development
  9. Make a personal commitment

Poverty abroad can easily hurt Western economies.  The effects of war, disease, poverty, and economic and political corruption can make an impact halfway across the world. The current civil war in Syria is just one example of an event happening halfway around the war that can impact the western world. The war has created thousand of refugees that now live in neighboring countries and have spread into Europe some making their way to the United States if they are able.  The conflict and instability in Syria has also caused an upsurge of terrorists group activity in Syria and surrounding areas and ISIS is considered a serious security threat across the world.

War in Syria

                    War in Syria

Outside of Moyo and Sachs there are others that argue over whether or not Africa really needs aid. Among them is Ngozi Okonjo-Iweala former finance minister of Nigeria.  In this Ted Talk she speaks on the ongoing debate of aid versus trade.

Another speaker for aid to Africa is Bono.  The world famous lead singer of U2, and also the man who wrote the introduction to Sachs’ End of Poverty. 

(Week 9): Sachs and Moyo continued

Part I: The End of Poverty 

In the End of Poverty Jeffery Sachs’ discuses the idea that the development assistance he proposes might do more harm to the global community if the wealthy and able do not help the poor. He argues that it is not a question of being able to help, but a suggestion that if they don’t do anything the consequences of inaction will outweigh the costs of action.  He provides five reasons why the effort to help the poor will not be as taxing to the privileged as some people may believe:

1. the numbers of extreme poor have declined to a relatively small proportion of the world’s population

2. the goal is to end extreme poverty, not all poverty

3. success in ending poverty trap will be much easier than it appears:

-get practical investments in specific areas roads, power, water, sanitation

4. the rich world today is so vastly rich

-modest increase in taxation or a burst of large-scale philanthropy

5. our tools are more powerful than ever

In The End of Poverty Sachs calls on less than one percent of the rich-world income for foreign aid. Sachs’ proposes that a few of the bigger countries, such as Japan, Germany and the United States, would account for 90% of the increase.

Despite growing frustration about the widening wealth gap in the United States people are hesitant to give more to foreign aid

A 0.7 percent of GDP to foreign aid for the United States is not impossible, but economic stability and political strain could make this difficult to achieve despite an increasing number of Americans that are displeased with the widening gap between the rich and the poor. Sachs argues that the debate about whether the rich are doing enough to help the poor only concerns less than one percent of the “rich-world income” I think that this suggestion is reasonable, but I am not sure if this is a sustainable method.

Sachs is not arguing for a Robin Hoodesque, where money should be given from the rich to the poor automatically

In the short-run taxing the rich might be sustainable, but could be damaging in the long term. Sachs acknowledges that this method is not sustainable in the long term since the actual economic flow might be smaller than we think.  He argues that his suggestion does not mean that such large amount of money should “automatically be levied on the rich and turned over to the poor” (292). He argues that the actual transfer of funds must be based on country-specific plans that are rigorous and developed through consultative and open processes. He is assuming that high-income countries will meet their Millennium Development Goal commitments, increasing aid and gross official development assistance. Sachs also identifies future problems, highlighting the effects of climate change on developing countries, since they require substantial assistance. This might mean large expense as the countries adapt to changing climates.

Sachs wrote The End of Poverty in 2004 and it was then that he predicted that extreme poverty would have declined by 20% by this year.  He had predicted that by this year that most of the developing world would be free from the poverty trap, but that is not what has happened. Today, about 15% of the world lives in extreme poverty. Although extreme poverty has fallen many regions of the world such as Sub-Saharan Africa are still suffering under extreme poverty.

Poverty in Rwanda

Rwanda’s poverty rate:

2006: 56.7%

2011: 44.9%  (World Bank)

The End of Poverty brings up “myths” about Africa’s economic and social values, attempting to combat the incorrect assumptions about the continent’s inability to sustain development:

  • any aid would go right down the drain
  • Education levels are so low that even previously successful programs would fail
  • Africa lacks modern values and institutions of a free market
  • if our aid saves Africa’s children there will just be an increase in population and just more hungry people to feed.

I have heard of all of these myths in some capacity before, and while I agree that most of them are myths I think that there is some truth to the first myth listed above. If aid is not given responsibly I think that there is a risk that aid might not end up where it was supposed to go, and could potentially fuel corruption.  I think that the idea that Africa lacks modern values and institutions of a free market is ethnocentric and outdated in principle.

Part II: Dead Aid 

China’s strategy in Africa has been to use its “muscle of money” and implement no strings attached procedures in Africa.  Despite concerns and criticism by western individuals and organizations such as the European Investment Bank and China’s record of human rights violations and undercutting of social and environmental conditions by Chinese lenders, Moyo advocates for China’s presence in Africa.

China in Africa

She holds an overall positive view of China’s influence and argues that the average Africa is benefited by China’s work more so than America. China’s no strings attached procedure and attempt to tighten their financial grip on Africa is demonstrated by China’s involvement in rebuilding the Nigerian railroad.  This no strings attached strategy can be seen as overshadowing international forces such as the International Monetary Fund (IMF) and the World Bank.

Week 8: Poverty

In the End of Poverty  Sachs discusess poverty reduction strategy plans for several countries, that all have certain themes in common.  I will be focusing on Uganda and Ghana.

UGANDA

Image from the Poverty Alleviation Department (PAD)

Uganda’s plan is known as the Poverty Eradication Action Plan or PEAP. This plan has been the guide for governmental policy since 1997.  This plan is also being revised.  Through this plan Uganda is being shaped into a country where people in all sectors can participate in economic growth in a thoroughly modern economy.  This modern Ugandan economy has allowed things like people in poverty being able to participate in economic growth by expanding smallholder agriculture and by increasing employment in industry and services.  Economic growth will be sustainable, broadly based, and of high quality.  This modern economy also requires that non-material aspects of poverty, such as insecurity, isolation illness, and disempowerment must be addressed.  More than anything the modern economy requires structural transformation, including the modernization of agriculture, the development of industries, which build on demand and supply linkages from agriculture, and continued institutional development in the legal and financial sectors.  The PEAP is set by four pillars:

-Creating a framework for economic growth and transformation

-Ensuring good governance and security

-Directly increasing the ability of the poor to raise their incomes

-Directly increasing the quality of the life of impoverished peoples.

GHANA

Slums in Ghana

Ghana’s Poverty Reduction Strategy or GPRS has taken on several forms through several programs aiming to accelerate the growth of the Ghanian economy.  In 1995 Ghana’s government presented “Ghana Vision 2020”  The purpose of this initiative was to make Ghana a middle-income country in 25 years.  The initiative focused on human development, rural development, urban development, infrastructure development, economic growth, and an enabling environment.  This initiative was followed by the Ghana Poverty Reduction Strategy.  Ghana’s main obstacle to economic growth is due to unemployment in the country, but the recent discoveries of gas and oil create opportunity for stimulating national development.  The current plan in Ghana is the Better Ghana Agenda.  Based on constitutional requirement and the Better Ghana Agenda it is rooted in these themes:

-Transparent and Accountable Governance

-Oil and Gas Development

-Infrastructure, energy, and human settlements development

-Human development, employment and productivity

-Enhanced competitiveness of Ghana’s private sector

-Ensuring and Sustaining macroeconomic stability

The plans of both these countries are logical and optimistic for their futures as developing countries working their way out of poverty.  The plans for these two countries, as well as the other countries that Sachs mentions, lay out the country’s goals, policies, targets, and strategies to cut poverty internally.

Dead Aid

Moyo argues that Africa is addicted to aid.  The market for African countries to issue bonds still exists, but only for those countries serious intent on transforming their economies for improvement.  It was in 2007 that JP Morgan’s EMBI+index of such bonds performed better against American government bonds by 15% and emerging market bonds returned some 35%.  Deciding to invest in the bonds of underdevelopment economies instead of home bonds pays off. Investors made high returns on bond lending to foreign countries than in safer home governments, as evidenced by the ten countries observed. These endeavors enhanced portfolio diversification.  Despite the underdeveloped countries wars, recessions and other issues foreign bondholders received a net return premium of .44 percent per annum on all bonds outstanding at any time between 1850 and 1970.

FDI in Africa in 2008

In Dead Aid, Moyo states that as countries mature they might choose to reduce the number of bonds they issue in the international market in favor of domestic bond issues or depending on domestic savings and tax.  For example,take South Africa that as its issuance of international bonds declined so did its position in the JP Morgan EMBI league table and eventually dropped.As global interest rates decline the debt service costs for poor countries also goes down. Fifteen African countries, Rwanda among them, have gained credit ratings that are high enough to tap the bond market in the last 12 years.

In order for a country to receive a FDI the labor costs need to be low, its investable opportunities are high, and even theoretically as home to some of the poorest countries in the world sub-Saharan Africa should be FDI’s contender.

Rwanda

The Government of Rwanda has “undertaken a series of pro-investment policy reforms intended to improve Rwanda’s investment climate and increase other foreign direct investment” according to the United States embassy in Kigali. The country currently has many potential opportunities for the United States and FDI specifically in infrastructure, agriculture, mining, tourism and information and communications.  However, FDI in Rwanda is not quite what it is in Rwanda’s neighbors in the East African Community (EAC). About 2.2 percent of GDP in 2012 ($156 million) is used concerning FDI.

Rwanda flag and country

The biggest obstacles potential and current investors in Rwanda faces include high transport, cost, limited access to affordable financing, a small domestic market, lack of skills in the workforce, ambiguous tax rules, and inadequate infrastructure.  Despite these obstacles Rwanda offers much to potential investors in the form of their resources, recent pro-investment policy, and a reputation of low corruption.

(Week 7): Dead Aid

In her book Dead Aid  Dambisa Moyo offers four alternative sources of funding for African economies: sovereign and private bond markets, foreign direct investment, international trade, and microfinance.

Book cover of Dead Aid: Why aid is not working and how there is another way for Africa (source: amazon.com)

Book cover of Dead Aid: Why aid is not working and how there is another way for Africa (source: amazon.com)

Usually sovereign debt markets are more disciplined than the institutions responsible for issuing foreign aid loans which means that to be considered viable candidates African governments selling debt must have a certain level of financial stability and be able to maintain it. While Microfinance does run the risk of one loan spreading to an entire community, there is a strong incentive to repay loans because of this risk. Foreign Direct Investment (FDI) without political conditions can be seen as a viable alternative to foreign aid and is being used by other donor countries such as China.  China has invested in infrastructure in return for claims on some of the surplus of goods produced. One thing that stands out on Moyo’s website and in her TED talks is her emphasis on China’s FDI.

International trade is something that few African countries have taken full advantage of, in part because the continent is under many internal controls and tariffs. If these internals tariffs and controls were to be removed international trade could be more of a possibility for much of Africa. I think that Microfinance and FDI could be effective in both Rwanda and Kenya, but I am not sure how big of an impact they would have on the economies of these countries and how long it would really take to make an impact.  While these alternatives are not perfect, and easier said than done overall I agree with Moyo that they are good, sustainable alternatives to foreign aid.

Microfinance clients of Trust Group in Rwanda (source: opportunity.org)

Microfinance clients of Trust Group in Rwanda (source: opportunity.org)

In Dead Aid, Moyo argues that the focus and drive behind aid shifts with each decade.  The 1960s were the decade of industrialization.  She says that the early 1960s saw an “underlying shift towards a greater focus on aid funding for large-scale industrial projects” (15). Then in the 1970s there was a shift to foreign aid focused on poverty.  While, in the mid-1970s nearly two-thirds of aid was still focused on infrastructure, under Robert McNamara the World Bank’s focus was reoriented to focus on poverty-based approach to development.  Like the infrastructure aid before, the poverty-related aid often came in the form of grants, which had to be paid back with interest.  Which later put many of these African states in further crippling debt. The foreign aid of the 1980’s Moyo calls, “the lost age of development.”  “Up until the 1980s the notion that governments were the ultimate arbiter of resource allocation lay at the core of economic planning, leaving little room for any sort of private sector…The 1980s saw a rise of neo-liberal thinking which argued that governments should liberalize their economies in favor of the laissez-faire paradigm which encompassed the private market.” For Africa this meant that this economic overhaul necessitated two new aid-based programmes, Stabilization and then structural readjustment.  The foreign aid of the 1990s Moyo categorizes as “ a question of governance” By the end of the 1980s “emerging-market countries’ debt was at least $1 trillion US dollars. This was seen as the crash of the aid-based development model and it set the stage for policy shifts in the 1990s. Discussions in Foreign aid in the 1990s were critical.  It was after many Asia and Latin American countries were back on track for growth and many African countries were stagnated that the donor community “converged on the idea that governance” was needed for sustainable and economic growth and had been lacking in much of sub-Saharan Africa. Moyo says the legacy of aid in the 90s still exists; that “governance remains at the heart of aid today.”

Crowd during Live Aid concert in 1985 (source: telegraph.co.uk)

Crowd during Live Aid concert in 1985 (source: telegraph.co.uk)

The foreign aid agenda of the 2000s marked the rise of glamour aid, although this was not the first time that celebrity had got involved in orchestrating “world-wide pity” for Africa. Most notably the July 1985 Live Aid Concert watched by 1.5 billion people. Among other events this paved the way for moral campaigners for anyone from Pope John Paul II to Bono to the average Joe to take a part in.  I was surprised that foreign aid in the 1960s was so focused on industry.

The Washington Consensus is a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the World Bank, the EU, the IMF and the US. Most critical voices of the Washington Consensus focus on trade liberalization and the elimination of subsidies. Critical voices were found particularly in the agriculture sector. In countries rich in natural resources the criticism was focused on the privatization and exploitation of these abundant natural resources.

U2's Bono visiting a school in Leso (source: blogs.britannica.com)

U2’s Bono visiting a school in Leso (source: blogs.britannica.com)

When Moyo quotes a critic of the western aid model saying “my voice can’t compete with an electric guitar” she is referring to “glamor aid”  which is the use of celebrity to raise awareness on certain aid related issues and generate  more funds as a result.  A common example is Bono the Irish lead singer of U2. She is basically saying that her critical voice cannot compete with the starpower and name recognition that a celebrity like Bono generates. That the average Joe is not likely to spend more than a few moments thinking about foreign aid and it is much more likely that because of that Bono’s voice (or another celebrity’s) might be the only one that is heard and considered for the average citizen of the world when it comes to aid. When Rwanda’s President Kagame’s mentions geopolitical rivalries “in the context of post-Second World War” he is talking about the United States and the U.S.S.R during the Cold War.

Aid is not working for many reasons among them geographical and historical considerations of a country.  One reasons geographical location has prevented aid from working is natural resource dependence and a developmental curse.  She cites arguments made in books like Gun, Germs, and Steel that focus on the impact of geographical location. Moyo gives the example that “many African countries were unable to capitalize on commodity windfalls of the 1970s leaving their economies in a state of economic disaster.” Historical factors such as colonialism are common explanations for Africa’s underachievement.  Moyo thinks that these reasons, and others, do not tell the whole story she argues that no factor should condemn Africa to a permanent failure to grow. She says “that while each of these factors might be part of the explanation in differing degrees, in different countries, for the most part African countries have one thing in common” and they all depend on aid.

Book cover of Guns, Germs, and Steel (source: wikipedia.org)

Book cover of Guns, Germs, and Steel (source: wikipedia.org)

The main weakness I see in Sachs’s argument really comes down to countries continuing to give aid, and more of it  Moyo’s whole book is discouraging this. I think that the alternative solutions that she provides are viable, but I am not sure of their effectiveness on a larger scale until I have seen the impact over a longer period of time than most of these alternatives have experienced.