Wednesday, July 06, 2005

"The greatest thing that's ever been organised probably in the history of the world" ???

Chris Martin of Coldplay notwithstanding, I do not believe that the Live 8 concerts were necessarily a high point in the history of humanity. A high point in the history of human hubris, perhaps, but not a high point in the history of all of humanity.

That said, I am certainly in favor of relieving suffering in Africa. The problem is that forgiving debts and increasing foreign aid will not necessarily accomplish that end. The publicity attending the Live 8 concerts has resulted in a fair amount of news coverage of the efficacy of foreign aid, and in the long run this increased attention may be the most beneficial result of Live 8.

What I have been reading is that aid provided to foreign governments and even to NGOs is often wasted. We have all read about corrupt African leaders such as Mobutu and Mugabe lining the pockets of their supporters with money intended to benefit their countries' poorest citizens. So why should we throw more money at such governments? The vague hope that a few dollars out the billions supplied by developed countries will reach the poor is not a good enough reason to conitnue to allocate foreign aid this way.

Investment that helps build sustainable private enterprises controlled by their stakeholders is what Africa needs. Believe me it is tough for an old socialist such as myself to make this argument, but I believe that foreign aid must bypass the corrupt governments that control many African states until those nations reform their political systems. Get money into the hands of villagers who can start small-scale businesses that employ their neighbors. Get the government apparatchiks out of this equation. These small-scale businesses could even be cooperatives, which would warm this old socialist's heart.

My wife and I donate money to two organizations that provide "micro loans" to entrepreneurs in Third World countries. Many of the recipients of these loans are women. Both FINCA and Technoserve have had success in lending small sums (often as little as a few hundred dollars) to entrepreneurs in the Third World. The businesspersons who receive these loans build businesses that keep money the local community and provide jobs for local people.

Perhaps this is the model that international aid should follow. Africa will never get out of the cycle of poverty until its own people are given access to the tools to help themselves.

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