The art of giving (Dead Aid - SPOILER ALERT!)

There is a beggar outside the station in the centre of London, just next to where I work. Holding a cardboard poster saying "Hungry and homeless please give. God Bless You". I used to find some loose change at the bottom of my pocket and relive the contents of my pocket, minus the pounds into a small bowl he had placed in front of him for that specific purpose of collecting alms. Despite hearing stories that some of these "beggars" were rich and some were actually millionaires in disguise and had houses, I did not allow that to sway me in giving. But after reading a book titled "Dead Aid" by Dr Bambisa Moyo recently, this had made me consider my actions seriously and if I was actually doing more harm than good in giving.

It is often said that "the path to hell is paved with good intentions". The interpretation of this statement I often take (as there are quite a few) is that there are a lot of "unintended consequences" of our "good actions". For example, I might be fuelling the beggar's drug habit or, more likely, reinforcing a means of livelihood of begging and taking handouts from other hardworking people. "Aid has failed to deliver the promise of sustainable economic growth and (long term - sustained) poverty reduction". Dr Moyo had said with 100% confidence that NOWHERE on earth that a country has used aids to fulfil this promise. She said that most of the papers and research that have been written are against aids. The IMF had seriously warned donor governments that aid is counterproductive. She also talked about the vicious cycle of aids, and a never-ending cycle of addiction, to aid. "The more (aids is given) it felt, rates the more it erodes, the greater the culture of aid-dependency". This left me to think, when I would be able to satisfy a particular beggar, let's say, for example, I was able to raise £10,000, would we see him again on the streets of London. I would like to think that NO; he would invest the money wisely, start renting a flat and get a decent job. But the reality is that he does not have the necessary life skills to operate as a productive community member. So it would be most likely that he needs a lot of self-confidence bolstering and the necessary life skills training to operate effectively – as he would not be begging in the first instance if he had them.

The lovely looking Dr Moyo has started a storm. And those who have put all their efforts in planning and carrying out supplying aids to Africa told them that they are not the solution, but actually, they are the problem. All the Bonos, Bob Geldof, Bill Gateses with all the money raised over the past 60 years and given to Africa, is estimated to be around US$ 1 trillion in today's money. Africa is far from the worse despite receiving all that aid, grants, loans and help. 

There are 3 kinds of aids, 

1. In this instance, humanitarian or emergency aid has a moral imperative to act.
2. NGO's or Charity Aid (Band-Aid) – like sending a girl to school, but this does not create jobs and is not enough to make any significant impact.
3. Government to government aid, this is the aid she is talking about in her book that she is against.

Of course, the initial reaction to her book was adverse and personal; some people labelling her something along the lines of 'baby killer', Bill Gates said that the book was 'evil'. Some people believe that "Dead Aid" is poorly researched, badly argued, "mendacious in its use of evidence, and pedestrian in its suggestions for alternatives to aid". Also, it goes against her PhD supervisor Professor Paul Collier Professor of Economics and Director of the Centre of the Study of African Economies at Oxford, the notion of development traps, in his book.

1. The Conflict Trap: Civil wars
2. The Natural Resource Trap - Dutch Disease, Resource Curse, Paradox of plenty 
3. Landlocked with Bad Neighbours
4. Bad Governance in a Small Country

She believes that it is all due to having excess money, i.e. rent-seeking (the use of governmental authority to take and make money without trade or production of wealth)  - aid, aid corrupts governments, causes civil wars, etc. 

The author of "The End of Poverty", Jeffery Sach, felt she was "Confused" and feels she has not got her facts right. That aid works, child mortality has decreased,  and adult literacy has increased. Primary school enrolments have increased, and aid has played a significant role in achieving this. "Africa's differences with other regions lie not in aid, but in circumstances of history."

But who is Dr Moyo? She is a bright Economist who has worked in one of the top American Financial institutions, Goldman Sachs, for 8 years before working in the World Bank. She had her masters at Harvard Business School and has a PhD from Oxford in Economics. Her dissertation is titled "Essays on the determinants of savings components in developing countries". Although a lot can be said about Economist, and it is the only field in which two people can get a Nobel Prize in the same year, for saying the opposite thing ultimately. She has raised a lot of eyebrows, and the world is listening. Another bombshell she dropped was democracy, especially in its early stages, is not essential for development. This is contrary to the accepted popular belief. As democratic nations have seemed has held their leaders to account. Over the years, aid from western donors has come with conditionalities and restrictions, among them a policy for the African governments to lean towards democracy. Dr Moyo said that democracy,  especially in the early stages, can hamper growth and is not a prerequisite for economic development. Dr Moyo classifies aid and capital from natural resources like diamonds, gold, and oil as aid. "Natural-resource windfalls, such as oil, have tended to be more of a curse than a blessing. Like aid, they are susceptible to theft and have practically unlimited opportunities for personal wealth accumulation and self-aggrandizement." She is saying that free money causes civil wars, internal conflicts, coups, civil distrust (as the government does not feel responsible to the electorate), starvation, drought, inhibits growth, etc. The only difference is that aid is an active and deliberate policy while a country 'blessed' with a natural resource does not have any choice. However, there is some hope because of the greater transparency in the oil, gas and mining sectors and the current falling price of oil, gas, and some natural mineral prices there are some improvements in that area. She also gave way out of aid in her book and how they get money by other sources development and trade with China help, remittances, microfinance banking, etc. Because the money by these sources is relatively limited (based on the results - i.e. profit), people are more accountable and would be forced to be transparent.

So, I was worried that I might be contributing to this beggar's condition, especially in this economic climate I could have justified not giving him money. I could quickly say 'me not giving you part of my hard-earned cash, is the best thing I could have done for you. It is painful as I have to fight my conscience, but it is for in a long time you will thank me". Also, I could go along the route of sitting him down and looking at both short and long term strategies to improve his lot. I had the idea that he might spend it on drugs, and it did cross my mind. And he was not interested in food or even my advice, and all he wanted was to get the next fix. How would you explain in a developed country where there are a lot of amenities, the government does have a responsibility to take care of the poor. There are hostels where you can just work and spend the night free and all expenses paid. Apart from that, there are a lot of charities bending backwards to help 'street people'. The government takes its responsibility seriously as you see people who have been 'kicked out' in hostels and council flats have taken care of the state free. Even people with mental illness are selectively housed, and they are well taken care of at work. As a resident doctor in psychiatry, my time exposed me to social care, primary key workers, long-term plan, community psychiatric nurses, etc. The government actively discourages people from begging. It was reported that when the Metropolitan Police did some drug testing of people arrested for begging, the figures indicated that between 70 and 80 per cent tested positive for one or more Class A drugs. So I could be sure with about 90% certainty that he was addicted to drugs but with 100% certainty with a narrow margin that he is addicted to our aid.