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GLOBEMED’S GLOBAL HEALTH EDUCATION AND LEADERSHIP DEVELOPMENT CURRICULUM

globalhealthU

Notable Quotes:

✦ “The notion that aid can alleviate systemic poverty... is a myth”✦ “Aid has been, and continues to be, an unmitigated political,

economic, and humanitarian disaster for most parts of the developing world”

Biography

Dambisa Moyo was born and raised in Zambia, Southern Africa. She completed a PhD in Economics at Oxford University and holds a Masters from Harvard University. She completed a Bachelors degree in Chemistry and MBA in Finance at the American University in Washington D.C..

She is the author of Dead Aid: Why Aid is Not Working and How there is a Better Way for Africa. She worked at Goldman Sachs for 8 years in the debt capital markets, hedge fund coverage and in global macroeconomics teams. Previously she worked at the World Bank in Washington D.C.. Dambisa is a member of the Board of Lundin Petroleum. Dambisa is a Patron for Absolute Return for Kids (ARK), a hedge fund supported children’s charity. She serves on the Boards of the Lundin for Africa Foundation and Room to Read, an educational charity.1

Major Theories

Despite the pervasive Western Belief that the rich should help the poor through aid, Moyo believes that this approach has actually helped make the poor poorer and hindered development. She states that sub-Saharan African countries have received more than $300 billion since 1970 and yet still “flounder in a seemingly never-ending cycle of corruption, disease, poverty and aid-dependency.” The countries that have received the most aid over the past thirty years have exhibited an average annual growth rate of minus 0.2 percent.2

The reason, she claims, is that the receipt of concessional (non-emergency) loans and grants has much the same effect in Africa as the possession of valuable resources: it encourages corruption and conflict while simultaneously discouraging free enterprise. The lack of terms or accountability that come with these loans not only makes them easy to steal, as they are usually provided directly to African governments, but also makes makes control over the government worth fighting for. More importantly, however, is that an influx of aid often undermines domestic saving and investment. Moyo cites the example of the African mosquito net manufacturer who is put out of business by well-intentioned aid agencies doling out free nets.3

Moyo suggests four alternatives to aid. “First, African governments should follow Asian emerging markets in accessing the international bond markets and taking advantage of the falling yields paid by sovereign borrowers over the past decade. Second, they should encourage the Chinese policy of large-scale direct investment in infrastructure... Third, they should continue to press for genuine free trade in agricultural products, which means

Track 2, Week 1

Exploring The Theories Of Dambisa Moyo

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globalhealthUGLOBEMED’S GLOBAL HEALTH EDUCATION AND LEADERSHIP DEVELOPMENT CURRICULUM

that the US, the EU and Japan must scrap the various subsidies they pay to their farmers, enabling African countries to increase their earning from primary product exports. Fourth, they should encourage financial intermediation. Specifically, they need to foster the spread of microfinance institutions that have flourished in Asia and Latin America.”4

Her last major point is that what “poor countries at the lowest rungs of economic development need is not a multi-party democracy, but in fact a decisive benevolent dictator to push through the reforms required to get the economy moving.”

Dambisa Moyo’s strategies for development can be broken down to a form of “shock therapy.” The most radical of her ideas comes in the form of a question. “What if,” she asks, “one by one, African countries each received a phone call... telling them that in exactly five years the aid taps would be shut off - permanently?” She feels that it is only through extreme methods like this that poverty can be alleviated.

1. http://www.huffingtonpost.com/dambisa-moyo2. http://www.amazon.com/Dead-Aid-Working-Better-Africa/dp/03741395633. http://www.amazon.com/Dead-Aid-Working-Better-Africa/dp/03741395634. http://www.amazon.com/Dead-Aid-Working-Better-Africa/dp/03741395635. http://www.amazon.com/Dead-Aid-Working-Better-Africa/dp/0374139563

Resources✦ Foreword to Dead Aid: Niall Ferguson discusses the major points that Moyo addresses in her most

influential work, which deal primarily with the failures of aid. http://www.amazon.com/Dead-Aid-Working-Better-Africa/dp/0374139563

✦ TEDx-Brussels: Dambisa Moyo discusses her views on foreign aid and African development http://www.youtube.com/watch?v=_QjiiM4jhbk

✦ How the Reader Was Lost: A critique on Moyo’s economic theories, discussing both her strengths and weaknesses.

http://www.economist.com/node/17956741✦ Dambisa Moyo Discovers Key to Ending Poverty: A critique on Moyo’s economic theories, discussing both

her strengths and weaknesses. http://blogs.cgdev.org/globaldevelopment/2009/03/dambisa-moyo-discovers-key-to-ending-poverty.php