[Comment] How We Can Learn from Failed Development Aid in Africa

from Spiegel

By Bartholomäus Grill

The record of 50 years of development aid is disastrous. Billions have been poured into recipient countries without lasting progress. For many Africans, conditions are worse than ever. More money and big new initiatives are not the answer. Instead, donor countries need to analyze their failures and work on creative solutions.

Northeastern Kenya was devastated. The country was hit by famine, drought, and death. But then white experts arrived to end the biblical plagues. They came from Norway and they had a brilliant idea: They would give the suffering nomads on Lake Turkana a fish factory to alleviate the impact of the periodic natural catastrophes and to create jobs. So they built their factory and only noticed afterward that the livestock-rearing Turkana scorned fish as well as wage labor; that the energy needed to deep-freeze the tilapia filets in the semi-desert region cost several times their market value; and that they had not taken into account the millions of dollars required to build new streets to get the merchandise to market. More experts came from Norway to evaluate these mistakes, and they exclaimed: "Oh my God, how could we have been so stupid!"

Altruism is as old as its antithesis, exploitation. From the comical, coin-eating "Jolly Negroes" set up in churches in the colonial period, to the Holstein cows that German president Heinrich Lübke wanted to send to Pakistan, to Microsoft's vision of a laptop in every hut -- all these good deeds and intentions are based on the philosophy of the kindhearted jungle doctor Albert Schweitzer. This philosophy also motivates Third World advocates and government aid experts: We must in some way make up for everything the "white man" has done to the lost and damned of this world. Too bad "reason" is so rarely part of the equation.

The 1970s Norwegian fish mission on Lake Turkana is just an anecdote today. It elicits the same chuckles as the snowplows the Soviet Union sent to its tropical "brother nation" of Guinea. When the average person demands that aid be stopped, this anecdote and similar tales get told, and now even serious publications are joining the chorus. What has it accomplished, the trillion or so dollars of aid that the developed world has transferred to underdeveloped countries since the 1950s? Why have the poor grown poorer despite the handouts? What business do we have helping a successful Asian tiger like Thailand? Why are alms going to the Angolans, who are swimming in oil? The unanimous opinion: tax money should no longer be squandered on nonsense like this. Even scholars like William Easterly, who once worked for the World Bank and is currently at New York University, have recommended reducing development aid and overhauling its structures. The Kenyan economist James Shikwati suggests striking it completely. He calls it "mis-development aid" and argues that it only benefits a corrupt elite.

At the same time, other groups are calling for more and better aid. They include not only development agencies, churches, and humanitarian organizations, but also naïve do-gooders. They want countries to finally live up to their promise of committing 0.7 percent of their GNPs to the welfare of the South. Heidemarie Wieczorek-Zeul, German minister of economic cooperation and development, is at least attempting to reach the interim mark of 0.51 percent agreed on in the German government's coalition contract. She rightly points out that total North-South transfers over the last 50 years barely amount to annual global outlays for arms. On an international scale, what we are talking about is peanuts.

But no one can deny that a lot has gone wrong from the start, or that little has been learned since Brigitte Erler returned from Bangladesh in 1985, quit her job at the German Ministry of Economic Cooperation, and presented her j'accuse in the book Tödliche Hilfe (Deadly Aid). Billions have continued to flow aimlessly to the South -- after all, we need to help in some way. What was once called "knitting socks for Negro children" in Thomas Mann's Buddenbrooks has become "plucking guitars for Africans" at Bob Geldof's pop concerts. The do-gooders want to create a just and dignified world, but for centuries the results have remained the same: dashed hopes, untold flops, and a herd of white elephants idly dotting the landscape.

But now -- or so we are told -- the United Nations' Millennium Project will change everything. The once-in-a-millennium development offensive, led by star economist Jeffrey Sachs, intends to increase aid threefold and to halve extreme poverty by 2015. It is surely an ambitious, respectable program with lots of good ideas, but it, too, builds on an outmoded "donor" orthodoxy: here the noble Samaritans, there the perpetual beggars, between them a plan to shower the poor with the goods of an affluent society, thus bringing salvation from outside. "A lot helps a lot" is the slogan, but how is this Marshall Plan going to succeed when its underlying strategy has failed for the last 50 years?

Development aid was invented to help the young states of the South during decolonization in the late 1950s. The seemingly philanthropic motives concealed the strategic calculations of the Cold War. In the struggle over geopolitical hegemony, the two large power blocs -- the West and the East -- were eager to impose their capitalist and socialist modernization models on the Third World. With generous subsidies and non-cash benefits such as tanks and rockets, they not only bought the ideological loyalty of elite groups in the South but also promoted their own export industry on the side. The satraps in Africa, Asia, and Latin America gratefully bellied up to the buffet, but while foreign aid secured their power, it also made them into children. After all, they were now on the "drip" -- dependent on infusions.

According to philosopher Alexandre Kojève, a "taking" colonialism evolved into a "giving" one. Naturally, the industrial states wanted the developing countries to follow in their footsteps on the path to prosperity. When practice did not follow theory, they came up with new concepts, new models, and new paradigms -- Keynesian, neo-classical, and Marxian. They created hybrid forms, alternative concepts such as the "dependency theory," as well as academic monstrosities whose names alone could strike terror in the heart. The "neo-factor proportion theorem" is surely something to savor while stuck in a village in the savannah.

In the beginning "import substitution" was presented as the panacea -- backward states were urged to reduce imports by diversifying domestic production. Talked into massive loans, they soon had both feet in the debt trap. In the end, the amount of money that went to servicing debt exceeded development aid -- and more funds were flowing from South to North than vice versa. The structural adjustment programs of the World Bank and the IMF prescribed neo-liberal therapies for the sick patients: Privatize! Deregulate! Liberalize! The "invisible hand of the market" was supposed to take care of everything. In the majority of developing countries market mechanisms were in place, but the reform therapy often led to lethal results. Today many in the South regard unfettered capitalism as the last phase in a 500-year history of exploitation. They talk about "global apartheid" and a "global class society." The gurus of the "Washington Consensus" have since watered down their doctrines in secret, even revoking a few of them. "The policy framework that we pushed abroad was the one that would help our companies do well abroad," says economics Nobel laureate Joseph Stiglitz, who was chief economist at the World Bank.

Most of the schools of thought have two things in common: they set store by industrial growth, and they neglect agriculture. And they all have failed. The modernization efforts were spearheaded by the development agencies, including the United Nations, the ministries of the individual nations, and NGOs. Some went along with current trends while others rejected them, which meant modifying their priority matrixes, devising alternative strategies, and setting new overarching objectives: Poverty reduction. Focus on basic needs. Participation. Good governance. But none of it helped much, even in countries that were bombarded with aid and that were transformed into project landscapes. When, for instance, the small country of Benin abolished socialism, the number of aid organizations swelled to 3,000.

Major new programs were launched at regular intervals to save the planet: the 1969 Pearson Study by the World Bank, the 1980 North-South Report under Willy Brandt, and in 1992 -- already forgotten? -- the Rio Earth Summit, at which even Helmut Kohl discovered a soft spot for sustainable development. The powerful players in the North paid lip service to the appeals in Sunday speeches, and many even expressed regret over their agricultural subsidies and trade restrictions, which robbed underdeveloped countries of opportunities; yet they continued to resist action. The comment once made by an Indian farmer is still valid today: he wanted to be reborn as a cow in Europe since cows there receive more support than farmers in India.

Since the turn of the century, we have seen a renaissance of the "Big Push" philosophy -- in the form of the G-8 initiative, Tony Blair's Commission for Africa, the step-by-step plan of the European Union, and the goals of the Millennium Project. Added to this are the billion-dollar foundations of philanthropists such as Microsoft founder Bill Gates. But none of these mammoth programs have seriously questioned why all the well-meaning efforts have failed so miserably in the past. Books on this topic now fill entire libraries, and most critics agree on one point: there is no universally applicable modernization model. Development cannot be grafted onto a country from the outside. It cannot be implemented like a vaccination program. It is an extremely complex process in which uncontrollable parameters are constantly changing. These can include a coup d'état, a crash in prices, or the billion-dollar intervention of a powerful new player like China. Successful measures can even have the opposite effect. Thanks to foreign support, Ghana managed to build a workable health system -- then the brain drain set in, and its doctors and nurses set off to Britain, where pastures appeared greener.

Experts often act as if development takes place under laboratory conditions. They usually know too little about the social structures, cultures, and traditions in the regions to which they are assigned. They massively underestimate major obstacles to development such as the superstitions that exist everywhere or the "witchcraft economy." Their political correctness forbids them to talk of "mentality barriers" -- but then they are surprised when people use the bush instead of their organic toilets. At the same time, with their "quantity over quality" ideology and exaggerated, sometimes utopian objectives, they provide the yardstick by which they are measured. "Development aid that randomly pursues overly ambitious goals doesn't work," says the Indian political scientist Pratap Bhanu Mehta. "What is necessary is a comprehensive transformation of the political economy of these countries -- a transformation that cannot be brought about by an outside power." Yet the thousands of helpers in this salvation army, together with their bureaucratic apparatuses, are driven by a true obsession with feasibility. There is frequent overlap between the programs of UN agencies, bilateral donors, and rival organizations. A single project may be funded by two or more donors, and the funds often exceed the recipient's ability to absorb them.

It is downright hair-raising to read one of these "poverty reduction strategy papers." Priority matrixes, interdisciplinary tasks, preliminary institutions, cross-sectoral prevention concepts -- we are given a lesson in the technocratic vocabulary of futility. But it does not matter if a project is botched, since the responsible parties do not suffer the same sanctions they would face in a market economy. In fact, they are even rewarded. After all, it is better to do something, anything, than to do nothing at all. All that matters is that the funds keep flowing. I once ran across an American in Somalia who was searching desperately for a new project. It was already December, he still had 50,000 dollars to dispose of and if he did not get rid of it by the end of the year his budget would be cut by the same amount the next fiscal year. It is obvious that the oft-invoked principle of sustainability was going to fall by the wayside. The measures often end up like the educational nature walk in Libreville, Gabon, which was created to teach people how mankind had plundered the rain forest: as soon as the German forestry expert had returned home, the tropical vegetation reclaimed the path. Had it ever really existed?

When the helpers recognize their mistakes, they castigate themselves. Sometimes their failures turn them into cynics. Sipping their "sundowners," they quote the theses of the critic William Easterly, or they joke about the solar cooker that the experts had touted for years as the solution to the energy problem in Africa -- only to discover that the locals preferred using the reflectors as mirrors in their huts. Mistakes happen, next project! There is tough competition among the good Samaritans from all corners of the globe, and perks need to be protected -- the air-conditioned office, the business flights, the spiffy off-road vehicle. New positions are created to gain an edge in the battle over funds from the international aid industry -- "head of competence area," or "priority area manager." Tony Vaux, who worked for Oxfam for years, speaks of "selfish altruists." The poverty industry secures jobs -- in the wealthy North.

Foreign experts and local elites are united by a common interest: they live off aid. Development funds, which donor countries now prefer to transfer as direct budget subsidies, are the only liquid assets with which kleptocrats can grease palms in order to preserve their power. It only reaches the needy in dribs and drabs. The World Bank discovered that just 13 percent of funds earmarked for a Ugandan educational program actually made it to the schools. Most lined the pockets of ghost teachers. Many glorify NGOs as a civil society alternative to corrupt state apparatuses, but they are also known to embezzle funds. A well-documented case is that of BOMA, a self-help initiative serving Massai herdsman in Tanzania. After becoming the darling of donor organizations, it garnered hundreds of thousands of dollars in aid -- much to the delight of its leading staffers, who bought a fleet of land cruisers, lived it up in the local town, and financed their private careers as local politicians.

But the worst consequence of this aid is that it paralyzes self-initiative and encourages a true mendicant mentality among the powerful and the powerless. Everyone expects an outside force to solve the problem; everyone is waiting for alms to rain down upon them in a kind of modern cargo cult. A few years ago, I was approached by the mayor of a Mozambican town who handed me a list and demanded: "I need five trucks, a bulldozer, and a few tons of cement." This attitude is produced by the good Samaritanism, and it can be observed in all strata of society, from street children to presidents. Paradoxically, it is reinforced by successful measures. A padre in Mathare, a slum in Nairobi, told me a typical story. After his church aid organization had a water main and public taps put in, an old man complained: "So who's going to pay me when I carry the full buckets of water back to my hut?"

Now we have the Millennium Project under the supervision of Jeffrey Sachs. It is a new "big push," a new shock therapy, yet it is driven by the same old paternalistic fantasies of saving the world. It is a simple, universal formula that comes with the mantra "more aid, more trade." Acclaimed experts of North-South relations such as Robin Broad of American University criticize its "backdoor" rehabilitation of dubious neo-liberal salvation doctrines. After all, as proof of these doctrines' success, Sachs likes to emphasize that the number of extreme poor have declined from 1.5 to 1.1 billion since 1981. Yet what he neglects to mention is that this trend is above all a result of the rise of China and India, two economic giants that by no means apply "pure" doctrine. Hardship has increased dramatically in Africa since the millions of poor have nothing they could possibly sell on the world market. Sachs's sermon is that they will automatically reap the fruits of modernization once they are given modern technologies: "a laptop in every hut." The only question is: What are children supposed to do with laptops if they can neither read nor write?

Jeffrey Sachs, the most powerful aid consultant of our age, regards the world from an ethnocentric perspective. He confuses poverty with misery, and is unwilling to see that people can lead dignified lives even in modest circumstances. "West is best" is his unflappable belief. There is no use objecting that our resource-hungry and environmentally destructive patterns of production and consumption are unsustainable. The Millennium Project perpetuates a mistake inherent in all aid concepts: it ignores the real power and ownership structures in recipient countries. The greatest impediment to modernization is not the poor, but the rich, the corrupt power elites and their repressive and predatory methods. These elites can now look forward to a threefold increase in aid, for as things stand now an external system will continue to transfer money -- a system that, for 50 years, has done more harm than good. This is why the unorthodox Peruvian economist Hernando de Soto urgently warns that people like Sachs are detrimental to efforts to solving the poverty problem.

So what can be done? There is no master plan, but it is high time we regarded development policy as a global structural policy that goes beyond humanitarian commitments. The obscene inequality in the world is the cause of war and terrorism. It increases refugee flows and destroys the basis of life. Only a just world can be a safe world. Ever since the terrorist attacks on September 11, 2001, the centers of power in the North have at least recognized the relevance of development issues to security policy. At the same time, they are feeling the shifts in the aid landscape: Their interventionist powers are on the wane because of the growing influence of confident new donor nations like China, India, and Brazil. Overly ambitious goals aside, a great deal would be accomplished if the 107 industrial and developing countries that endorsed the Paris Declaration on Aid Effectiveness in 2005 would consistently implement its principles, which are not at all new. The first goal must be to radically reform the obsolete institutions, instruments, and methods of cooperation in the field of economic development. Only then should aid be increased. We must start in the North, with our criminal economic and trade policy, our alms industry, and the money-burning machine that goes by the name of the United Nations. But this new orientation would be useless if elitist groups in the South, with their victim mentality, refused to accept that they themselves are responsible for the well-being of their nations. Greater pressure must be applied on the powerful, for they are not victims, but accomplices, and they are by no means poor. In Africa alone, 75,000 millionaires have accumulated a collective fortune of over 700 billion dollars, and an additional 400 billion dollars is controlled by Africans outside the continent.

Despite all the criticism, we must not forget that there are thousands of committed aid workers and sensible projects. Without these, many crisis regions would be a lot worse off today. We could learn as much from them as, say, from the creativity that poverty engenders and from the entrepreneurial spirit found in the informal economy of the slums. We could broaden the foundations of the successful system of small loans or strengthen the Extractive Industries Transparency Initiative for effective resource management. As in the world of soccer, we could introduce a "transfer fee" for top talent that is recruited from the South. All of this would be possible if we had the will, if we were only prepared to expend the same amount of creative energy as was needed to invent and develop the Mars probe.

Bartholomäus Grill is the head of the Africa desk of the German weekly Die Zeit and a consultant for the German president, Horst Köhler. His latest book is "Gott, AIDS und Afrika" (Kiepenheuer and Witsch, 2007).