More aid is not what Africa needs from Obama

In July last year Barack Obama called for a doubling of US aid as a centrepiece to his foreign policy. “Development assistance … can be our best investment in increasing the common security of the entire world,” he said. “That’s why I’ll double our foreign assistance to $50bn by 2012, and use it to support a stable future in failing states, and sustainable growth in Africa; to halve global poverty and to roll back disease.”

The 44th American president is to be lauded for his commitment to Africa but this plan for the continent’s renewal is misguided. Nearly all western leaders revert to the same basic formula when confronted by Africa’s myriad problems: more money and more ambitious targets. Little if any evidence suggests that it works.

Perhaps the first — and best — thing his new administration can do for Africa is abandon the idea that development through foreign aid can work. The continent urgently needs, instead, to be integrated with global markets in a way that encourages openness and better governance. And in those parts of Africa emerging from conflict, the “economics” of peace building must be given far greater weight. Reconciliation and justice get all the attention but jobs and roads often are just as important to post-war stability.

One of the most powerful incentives in Washington’s armoury is its support for free trade. Not all African countries will be affected equally or always positively but overall the impact of freer trade will be beneficial to African economic systems. In pressing for trade reform Obama, together with liberals in Europe and further afield, must tackle the isolationists head-on.

Another key incentive consistently absent during presidential “safaris” to Africa is global business. Africa’s problem is marginalisation and competitiveness; the continent requires more globalisation not less. Instead of an ever-expanding White House press corps filling seats on Air Force One, Obama should give more seats to businessmen and women prepared to strike deals and exploit opportunities.

And there are opportunities in Africa. It just needs better governance and more investment. Obama may be in a better position to help than any of his predecessors.

Source: Greg Mills and Terrence McNamee, More aid is not what Africa needs from Obama, January 26, 2009.

For text: http://www.businessday.co.za/articles/opinion.aspx?ID=BD4A925436

For more on foreign aid: < href="http://www.freemarketfoundation.com/issues.asp?id=37">http://www.freemarketfoundation.com/issues.asp?id=37

FMF Policy Bulletin/ 03 February 2009